oil prices are at a 3 month high; natural gas prices settled at new 3½ year lows four days this week; US refinery utilization rate, refinery throughput, and distillates production all are lowest in 58 weeks, on ongoing Gulf Coast shut-ins; January’s global oil production was 1,520,000 barrels per day below estimated demand.
US oil prices finished higher for the fourth time in five weeks on rising violence in the Middle East and a weaker US dollar…after rising 6.3% to $76.84 a barrel last week after Israel rejected a brokered ceasefire offer from Hamas and resumed attacks on Gaza amid ongoing US strikes against Yemen, Iraq and Syria, the contract price for the benchmark US light sweet crude for March delivery moved lower in Asian trading Sunday, after Iran’s foreign minister reported the Israel-Hamas conflict could be moving closer to a diplomatic solution, then sold off early in the Monday session amid the news that the Israeli military said it had "concluded" a “series of strikes” on southern Gaza, but recovered to settle 8 cents higher at $76.92 a barrel, a sixth straight gain, as traders continued to weigh global demand expectations and prospects for supply disruptions against a backdrop of rising tensions in the Middle East…oil prices continued to move higher in early trading Tuesday after OPEC forecast relatively strong growth in global oil demand in 2024 and 2025, and increased their economic growth forecasts for both years, and settled 95 cents higher at $77.87 a barrel against a backdrop of broader risk-off sentiment after the consumer price index indicated inflation remained elevated, reducing the prospect of imminent interest rate cuts…oil prices extended their gains overnight after the American Petroleum Institute reported big draws from fuel supplies, but then sold off Wednesday morning after the EIA reported a huge increase U.S. crude inventories, and settled $1.23 lower at $76.64 a barrel after the. Congressional intelligence chairman warned of a 'serious national security threat', without providing details, scaring off some oil traders…oil prices began lower for a second day early Thursday after the International Energy Agency warned of slowing demand growth, but reversed those early losses and settled $1.39 higher at $78.03 a barrel after U.S. retail sales data showed consumers spent less than expected last month, weakening the U.S. dollar and thus boosting oil…oil prices slipped in overseas trading early Friday on signs that OPEC+ members were complying with their promised supply cuts, but rallied during the New York session and settled $1.16 higher at a three month high of $79.19 a barrel, and thus ended with a 3.1% gain for the week, after Hezbollah fired dozens of rockets at a northern Israeli town and said they would escalate their retaliation against Israel following the killing of 10 civilians in southern Lebanon
On the other hand, natural gas prices fell for the 5th time in six weeks on an anemic midwinter withdrawal of gas from storage and weather forecasts ppromising more of the same....after falling 11.2% to a 3½ year low of $1.847 per mmBTU last week on weak LNG and heating demand in the face of a building gas supply glut, the contract price for natural gas for March delivery opened 2 cents lower on Monday on extended forecasts for low demand in key markets, and slid to a 7.9 cent loss on the session at $1.768 per mmBTU, as fundamental support continued to evade traders, leaving them little to latch onto…the March contract opened 3 cents lower and fell again early Tuesday, as daily forecasts continue to trend progressively bearish, and again settled 7.9 cents lower at $1.689 per mmBTU, with the market strangled by a healthy supply of natural gas and no significant demand for it….natural gas prices opened another 4 cents lower on Wednesday on steady production and continued mild forecasts, and slid throughout the day to settle 8.0 cents lower at $1.609 per mmBTU on near-record output, ample amounts of fuel in storage, curtailed LNG demand, and forecasts for warmer weather next week than was previously expected… natural gas prices averaged a penny higher ahead of the storage report early Thursday, but an anemic storage print sent prices lower to settle down 2.8 cents at a fresh 3-1/2-year low of $1.581 per mmBTU on rising, near-record output and a smaller-than-expected storage withdrawal, as warm weather had kept heating demand low….natural gas prices finally managed an upside move of 2.8 cents or almost 2% to $1.609 per mmBTU on Friday, ahead of a three-day weekend, as bargain hunters moved in to buy on news that some producers planned to reduce drilling in 2024, after prices had collapsed to a 3-1/2-year low, but still finished 12.9% lower for the week..
The EIA's natural gas storage report for the week ending February 9th indicated that the amount of working natural gas held in underground storage in the US fell by 49 billion cubic feet to 2,535 billion cubic feet by the end of the week, which left our natural gas supplies 255 billion cubic feet, or 11.2% above the 2,280 billion cubic feet that were in storage on February 9th of last year, and 348 billion cubic feet, or 15.9% more than the five-year average of 2,187 billion cubic feet of natural gas that were typically in working storage as of the 9th of February over the most recent five years…the 49 billion cubic foot withdrawal from US natural gas working storage for the cited week was significantly less than the 68 billion cubic feet withdrawal from supplies that had been forecast by analysts polled by Reuters, and was less than half of the 117 billion cubic feet that were pulled from natural gas storage during the corresponding first week of February 2023, and was less than a third of the average 149 billion cubic feet withdrawal from natural gas storage that has been typical for the same mid winter week over the past 5 years…
The Latest US Oil Supply and Disposition Data from the EIA -
US oil data from the US Energy Information Administration for the week ending February 9th indicated that even after an increase in our oil exports and a decrease in our oil imports, an increase in oil supplies that could not be accounted for meant we had surplus oil to add to our stored commercial crude supplies for the third consecutive week, and for the 11th time in the past 17 weeks….Our imports of crude oil fell by an average of 437,000 barrels per day to average 6,470,000 barrels per day, after rising by an average of 1,302,000 barrels per day the prior week, while our exports of crude oil rose by 751,000 barrels per day to average 4,347,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 2,123,000 barrels of oil per day during the week ending February 9th, 1,188,000 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 from unfinished oils averaged 479,000 barrels per day, while during the same week, production of crude from US wells remained at a record 13,300,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a rounded total of 15,902,000 barrels per day during the February 9th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 14,542,000 barrels of crude per day during the week ending February 9th, an average of 297,000 fewer 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 1,823,000 barrels of oil per day were being added to the supplies of oil stored in the US... So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending February 9th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 464,000 barrels per day less than what was added to storage plus 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 plugged a rounded [+464,000] 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 or omission of that size in the week’s oil supply & demand figures that we have just transcribed... Moreover, since 1,569,000 barrels of oil demand per day could not be accounted for in last week’s EIA data, that means there was a 2,034,000 barrel per day difference between this week's oil balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, and therefore nonsense...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 (as is obvious to anyone who watches oil prices), 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 ongoiing weekly errors, and what they had hoped to do about it)
This week's rounded 1,823,000 barrel per day average increase in our overall crude oil inventories came as 1,717,000 barrels per day were being added to our commercially available stocks of crude oil, while 107,000 barrels per day were being added to our Strategic Petroleum Reserve, the eleventh SPR increase in eighteen weeks. following nearly continuous withdrawals over the prior 39 months... Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,140,000 barrels per day last week, which was 7.2% less than the 6,669,000 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 unchanged at a record 13,300,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 12,900,000 barrels per day, while Alaska’s oil production was 4,000 barrels per day higher at 439,000 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 was 1.5% above that of our pre-pandemic production peak, and 37.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.
US oil refineries were operating at 80.4% of their capacity while processing those 14,542,000 barrels of crude per day during the week ending February 9th, their lowest utilization in 58 weeks, and down from their utilization rate of 92.6% four weeks earlier, apparently due to damage from the arctic cold that penetrated to the Gulf Coast in mid January, as refineries outside of PADD 3 were still operating normally... the 14,542,000 barrels per day of oil that were refined this week were also the least in 58 weeks, 3.2% less than the 15,027,000 barrels of crude that were being processed daily during week ending February 10th of 2023 (after the refinery-freeze-offs following Christmas 2022's winter storm Elliot), and 9.2% less than the 16,020,000 barrels that were being refined during the prepandemic week ending February 7th, 2020, when our refinery utilization rate was also at a lower than normal 88.0%..
Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was somewhat higher, increasing by 164,000 barrels per day to 9,175,000 barrels per day during the week ending February 9th, after our refineries' gasoline output had decreased by 270,000 barrels per day during the prior week. This week’s gasoline production was 0.9% more than the 9,089,000 barrels of gasoline that were being produced daily over the winter storm impacted week ending February 10th of last year, but 9.0% less than the gasoline production of 9,903,000 barrels per day during the prepandemic week ending February 7th 2020....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 281,000 barrels per day to a 58 week low of 4,076,000 barrels per day, after our distillates output had decreased by 545,000 barrels per day over the prior three weeks. With those decreases, our distillates output was 9.6% less than the 4,509,000 barrels of distillates that were being produced daily during the week ending February 10th of 2023, and 15.7% less than the 4,837,000 barrels of distillates that were being produced daily during the week ending February 7th 2020…outside of last year’s winter storm Elliot, 2021’s winter storm Uri, and 2017’s Hurricane Harvey, refinery throughput and distillates production hasn’t been this low in more than a dozen years
Even with this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the third time in thirteen weeks, decreasing by 3,658,000 barrels to 247,330,000 barrels during the week ending February 9th, after our gasoline inventories had decreased by 3,146,000 barrels during the prior week. Our gasoline supplies fell again this week even though the amount of gasoline supplied to US users fell by 639,000 barrels per day to 8,168,000 barrels per day, because our exports of gasoline rose by 221,000 barrels per day to 968,000 barrels per day, and because our imports of gasoline fell by 100,000 barrels per day to 436,000 barrels per day…But even after thirty-one gasoline inventory withdrawals over the past fifty-two weeks, our gasoline supplies were still 2.2% above than last February 10th's gasoline inventories of 241,922,000 barrels, while about 2% below the five year average of our gasoline supplies for this time of the year…
With this week's decrease in our distillates production, our supplies of distillate fuels fell for the fourth consecutive week, following eight consecutive increases, decreasing by 1,915,000 barrels to 127 574,000 barrels over the week ending February 9th, after our distillates supplies had decreased by 3,221,000 barrels during the prior week. Our distillates supplies fell by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 303,000 barrels per day to 3,514,000 barrels per day, and because our exports of distillates fell by 155,000 barrels per day to 971,000 barrels per day, while our imports of distillates rose by 9,000 barrels per day to 135,000 barrels per day...Even with 27 inventory decreases over the past forty-eight weeks, our distillates supplies at the end of the week were 5.4% above the 119,237,000 barrels of distillates that we had in storage on February 10th of 2023, but were about 7% below the five year average of our distillates inventories for this time of the year...
Finally, after an increase in our oil supplies that the EIA could not account for and absent the unaccounted fo demand, our commercial supplies of crude oil in storage rose for the 13th time in twenty-six weeks and for the 23rd time in the past year, increasing by 12,018,000 barrels over the week, from 427,432,000 barrels on February 2nd to 439,450,000 barrels on February 9th, after our commercial crude supplies had increased by 5,220,000 barrels over the prior week... With this week’s increase, our commercial crude oil inventories rose to about 2% below the most recent five-year average of commercial oil supplies for this time of year, and were more than 34% above the average of our available crude oil stocks as of the second weekend of February 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 February 9th were 6.8% less than the 471,394,000 barrels of oil left in commercial storage on February 10th of 2023, but 6.8% more than the 411,508,000 barrels of oil that we still had in storage on February 11th of 2022, while still 4.8% less than the 461,757,000 barrels of oil we had in commercial storage on February 12th of 2021, after 2020’s pandemic precautions had left a lot of oil unused…
OPEC's Report on Global Oil for January
Tuesday of this past week saw the release of OPEC's February Oil Market Report, which includes the details on OPEC's & global oil data for January, and hence it gives us a picture of the global oil supply & demand situation as the largest OECD economies outside of the US had slipped into recessions, and as the Chinese manufacturing PMI continued to indicate contraction, following their earlier sharp recovery from the country's restrictive Covid policy, while at the same time oil supplies continued to be impacted by ongoing production cuts from OPEC, their allies, and unilaterally by the Saudis...while January marked the end of the twelve month span that OPEC and aligned oil producers were operating under a 2 million barrel per day production reduction, meant to take roughly 2% of global oil supplies off the market, those cartel wide quotas of 2023 were replaced by "voluntary cuts" totaling 2.2 million barrels by less than half of the cartel's members for the first quarter of 2024, after a November 30th meeting was unable to agree to a cartel wide cut....at the same time, the Saudis extended their unilateral million barrel per day production cut, and a Saudi led cut of an additional 1.16 million barrels per day, which, when combined with a unilateral 500,000 million barrel per day Russian cut, was intended to take 1.66 million barrels per day off the market, were also extended into 2024....
The first table from this month's report that we'll review is from the page numbered 50 of the report (pdf page 60), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC has been using an average of production estimates by as many as eight "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA), the industry newsletter Petroleum Intelligence Weekly, the energy consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures…
As we can see in the bottom right hand corner of the above table, OPEC's oil output decreased by 350,000 barrels per day to 26,342,000 barrels per day during January, down from their revised December production total that averaged 26,692,000 barrels per day...however that December OPEC output figure was originally reported as 27,700,000 barrels per day, which means that OPEC's December production was revised 8,000 barrels per day lower with this report, and hence OPEC's January production was, in effect, 358,000 barrels per day less than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official December OPEC output figures as reported a month ago, before this month's revision)...
OPEC's twelve remaining members, and twelve other aligned oil producers, were unable to arrive at a cartel wide production cut to replace the 2 million barrel per day cuts of 2023 in which all producers participated, so several of the key members of the cartel agreed to "voluntary cuts" totaling 2.2 million barrels per day for the first quarter of 2024....according to a November 30th press release after that meeting, participants in that voluntary agreement included Saudi Arabia (cutting 1,000 thousand barrels per day); Iraq (223 thousand b/d); United Arab Emirates (163 thousand b/d); Kuwait (135 thousand b/d); Kazakhstan (82 thousand b/d); Algeria (51 thousand b/d); and Oman (42 thousand b/d)...those voluntary cuts would be calculated from the 2024 required production level as per the 35th OPEC Ministerial Meeting held on June 4 2023, and are in addition to the voluntary cuts previously announced in April 2023 and later extended until the end of 2024...the production cuts that OPEC members committed to under the April 2023 agreement included 500,000 barrels per day (bpd) from the Saudis, 211,000 bpd from Iraq, 140,000 bpd from the Emirates, 128,000 bpd from Kuwait, 48,000 barrels per day from Algeria, and 8,000 barrels per day from Gabon...eight months ago, our initial assessment was that only the Saudis managed to hit the additional production cut target in May 2023, and only Algeria joined them in June, indeed, most of the others who announced cuts in April 2023 increased their production over the June through December period, rather than cutting it...hence, the net production reduction at year end remained about half of what had been committed to by the parties to that April 2nd agreement…
looking at January’s production levels in the above table, it appear that Iraq and Kuwait have begun to reduce their production as per the November agreement, while reductions from the other parties has been negligible (the Saudis had already unilaterally cut a million barrels per day for several months prior, so we wouldn’t expect a change from them)…on the other hand, those OPEC members who objected to a continuation of 2023’s reduced quotas have not begun to increase their production to their previous levels (note that Libya’s 162,000 barrel per day output reduction in January was involuntary, after protests had shut down their largest oil field)….war torn Libya as well as US sanctioned producers Iran and Venezuela have been exempt from the production cuts imposed by the joint agreement that has governed the output of the other OPEC producers since May 2020…
The next graphic from this month's report that we'll look at shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from February 2022 thru January 2024, and it comes from page 51 (pdf page 61) of OPEC's February Oil Market Report....on this graph, the sky blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple line graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....
Following January's 350,000 barrel per day decrease in OPEC's production from their revised production of a month earlier, OPEC's preliminary estimate is that total global liquids production decreased by a rounded average of 600,000 barrels per day in January to an average of 101.8 million barrels per day in December, after December's total global output figure was apparently revised up by 1,500,000 barrels per day from the 100.9 million barrels per day of global oil output that was reported for December a month ago, as non-OPEC oil production fell by a rounded 200,000 barrels per day in December after that big upward revision, with most of January’s non-OPEC production 'decrease' due to lower oil output from the US and 'other Eurasian countries', which more than offset greater oil production from China, Canada and Brazil...
Even with the large upward revision to December's global oil output, the amount of oil being produced globally during January again fell far short of the expected global demand, as this next table from the OPEC report will show us...
The above table came from page 27 of the February Oil Market Report (pdf page 37), and it shows regional and total oil demand estimates in millions of barrels per day for 2023 in the first column, and then OPEC's forecast of oil demand by region and globally, quarterly over 2024 over the rest of the table…on the "Total world" line in the second column, we've circled in blue the figure that's relevant for January, which is their estimate of global oil demand during the first quarter of 2024….OPEC is estimating that during the 1st quarter of this year, all oil consuming regions of the globe will use an average of 103.32 million barrels of oil per day, which is a rounded 10,000 barrels per day downward revision from their estimate for the first quarter a month ago (as we’ve circled in green), but not enough of a revision to change the rounded projection from their prior forecast....but as OPEC showed us in the oil supply section of this report and the summary global supply graph above, OPEC and the rest of the world's oil producers were only producing 101.8 million barrels per day during January, which would imply that there was a shortage of around 1,520,000 barrels per day of global oil production during January, when compared to the demand estimated for the month...
Note that in addition to figuring the January oil shortage that's indicated by this report, the upward revision of 1,500,000 barrels per day to December's global oil output that's implied in this report means that the 2,280,000 barrels per day global oil output shortage we had previously figured for December would have to be revised to an oil production shortage of 780,000 barrels per day...
Also note that in green we've also circled an upward revision of 40,000 barrels per day to 2024's demand, which also means that the supply surpluses and shortfalls that we previously reported over last year would have to be revised...previously, when OPEC had revised demand for a prior year, they had been including a separate table showing which quarters and how much in each quarter that revision would apply to...since they didn't do that in this month's case, it likely means they've dropped that historical feature, and hence we can't revise our monthly estimates accordingly...we do have the most up-to-date estimates of production shortages (and in few cases surpluses) for all 12 months of 2023 with our post on December's oil supply and demand as per OPEC, so those estimates now need to be adjusted for that 40,000 barrels per day upward revision to 2024's demand...
This Week's Rig Count
In lieu of 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 February 16th, the second column shows the change in the number of working rigs between last week’s count (February 9th) and this week’s (February 16th) count, the third column shows last week’s February 9th 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 17th of February, 2023...
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Oil Find Shifts Attention in Utica - Business Journal Daily – More than 10 years into the exploration of the Utica/Point Pleasant shale region, energy companies are just now obtaining a clearer picture of what this formation holds. This is especially important for northeastern Ohio, where surprising discoveries of large volumes of oil are changing the entire nature of the play. The combination of data from legacy horizontal oil and gas wells, advanced technology, and a more in-depth understanding of the geology of the Utica have helped to narrow the search for more productive rock, industry specialists say. This information has also led to more efficient means of drawing out oil and gas molecules that have been sealed underground for millions of years. At the forefront of the rush is Encino Energy, whose Utica subsidiary, EAP Ohio, has emerged as the leading oil producer in the state. Moreover, the company has found productive oil wells in pockets that earlier were thought relegated to natural gas production. “Over the past five years, Encino has grown oil production by 250% and natural gas production by 15%, becoming the largest producer of oil in Ohio,“ says Jackie Stewart, Encino director of external affairs. Encino entered the market in 2018, acquiring most of Chesapeake Energy’s Utica assets in eastern Ohio, including Columbiana County. Through the first nine months of 2023 – the most recent production figures available from the Ohio Department of Natural Resources – the Texas-based energy company reported it’s produced more than 10.35 million barrels of oil from the Utica, more than half of the nearly 20 million barrels produced in the entire state during the period. Columbiana County Oil Boom A major addition this year to the oil assets of Encino is a handful of wells in Columbiana County that have shown promise in the northern tier of the Utica, according to ODNR production records. Drilled in Hanover and Knox townships, eight Encino wells accounted for 728,443 barrels of oil during the first nine months of 2023. Three of those wells, the Sanor 6H, 8H, and 10H in Knox Township, were ranked respectively the 6th-, 7th- and 8th-most productive oil wells in Ohio during the third quarter, ODNR records show. What is unusual is that this section of the Utica is known for its natural gas production, not oil. “There is some shifting where the money’s being invested,” observes Andrew Thomas, executive in residence at the Energy Policy Center of Cleveland State University’s Maxine Goodman Levin School of Urban Affairs. “The focus of drilling has been moving north.” Thomas observes as early as five years ago, energy companies all but ignored prospects for oil in portions of the northern and other parts of the Utica. “Five years ago, that entire oil window had been written off as uncommercial,” he says. “They’re coming back now. We’ve seen a handful of companies drilling in areas that are predominantly oil.” The Energy Policy Center at Cleveland State publishes a Utica shale investment study twice a year and is now compiling data, Thomas says, and analyzing trends for the first half of 2023. “Oil production has been on the rise – about 10% a year – over the last several years,” he observes, driven mostly by higher oil prices and a renewed push into the oil windows. This trend is likely to continue, Thomas says, along with steady volumes of natural gas production. And the Utica should continue to see drilling activity migrate northward from the southern tier, he says. “What caught my eye during the first half of 2023 was that it’s the first time we’ve seen total production from Jefferson County exceed Belmont County as the leader in state for production,” Thomas says. The potential for strong oil production across the Utica has been known for years, says Mike Chadsey, director of public relations for the Ohio Oil and Gas Association. The trick, however, was finding a way to drill for this oil that made economic sense. “There’s a saying in the industry, ‘Oil is where oil was,’ ” Chadsey says. “There’s been oil production in shale and conventional production in Columbiana County and elsewhere such as Tuscarawas and Guernsey counties for a long time now.” The precise extent of the Utica oil play has yet to be determined, Chadsey says. Between 30 and 40 wells in the Utica oil window – some of which are in Columbiana County – should be commissioned by the first quarter of this year. Production results from these wells should present a better indicator of the oil potential in the Utica, he says. “Each well is a data point,” Chadsey says. “The most telling will be the first quarter of 2024, when a lot of these wells come online and production is reported.” As of now, Chadsey says, there’s not enough information to project with certainty the course of oil production in Columbiana County. “We have an indication. We’ll know more in the first and second quarters of 2024,” he says. Nevertheless, the early results are encouraging for the industry, Chadsey says. “Everything we have heard – they’re cautiously optimistic if not downright excited about the opportunities in Columbiana County,” he says.
Gassy Northern Utica in Ohio Turns Oily Thanks to Encino Energy | Marcellus Drilling News - Encino Energy purchased Chesapeake Energy’s Ohio oil and gas assets (including Utica Shale assets) in 2018 for $2 billion (see Encino Takes Over from Chesapeake in Ohio Utica; Big Plans). A few months later, Encino CEO Hardy Murchison and COO Ray Walker (formerly of Range Resources) told attendees at a conference they would do oil drilling in the state differently and better than Chesapeake (see Encino Says They’ll Do it Better in the Utica than Chesapeake Did). They did! By June of last year, Encino had become the biggest oil producer in the state, having “cracked the code” on oil drilling in Ohio (see Oil Prod. in Northern Utica Comes Alive – Encino Cracks Oil Code). Encino is now turning parts of northern Utica, places like Columbiana County that are known for producing mostly natural gas, into oil-producing zones.
PA DEP Finally OKs Use of Big Sewickley Creek Water for Fracking - Marcellus Drilling News -- In 2021, PennEnergy Resources made a request to the Pennsylvania Dept. of Environmental Protection (DEP) to withdraw up to 3 million gallons of water a day from Big Sewickley Creek and one of its tributaries for shale fracking (see Dem PA Lawmaker Wants to Block Use of Creek Water for Fracking). In March 2022, PennEnergy reapplied for a permit to draw water, but this time, the request was cut in half to just 1.5 million gallons of water a day (see PennEnergy Reapplies to Use SWPA Creek Water for Fracking Ops). In July 2022, the application was finally christened as complete and ready for an official review (see PennEnergy Creek Water Request Now “Complete” – PA DEP Reviewing). And that’s where it’s been, hanging in limbo since then. Until yesterday, when the DEP notified those commenting on the application that it had been approved. Finally!
Record High NGL Exports from Marcus Hook, ET Expanding Facility - Marcellus Drilling News -- Pipeline giant Energy Transfer (ET), owner of the Mariner East Pipeline system, the Marcus Hook NGL terminal, and the Rover pipeline in the Marcellus/Utica region, issued its fourth quarter and full-year 2023 update yesterday. Net income for 4Q23 was $1.57 billion, up 9% from 4Q22’s $1.44 billion. However, net income for 2023 was $5.29 billion, down 10% from 2022’s $5.87 billion. ET is a big company with assets in many oil and gas regions of the U.S. Of interest for us were the comments about the Marcus Hook NGL terminal and its exports.
EQT Not Ready to Curb Production Further as it Jockeys for Natural Gas Rebound - Despite crashing prices, executives at EQT Corp. said the U.S. natural gas market is not as oversupplied as most think, suggesting the stage is being set for a rebound. Henry Hub has traded below $2/MMBtu for seven straight sessions. The contract hasn’t been this low since June 2020 during the Covid-19 pandemic. NGI’s Weekly Spot National Avg. price has also been under pressure for four weeks in a row, weighed down by near record production and mild winter weather. But CFO Jeremy Knop pointed to a “prominent data vendor” that lowered its year-to-date supply estimates this week, suggesting fundamentals aren’t as bad as they seem.
Low Gas Price May Cause EQT to Shut-in Production, Curtail Drilling - Marcellus Drilling News - - EQT Corporation, the largest natural gas producer in the U.S. (100% focused on the Marcellus/Utica) released its fourth quarter and full-year 2023 update yesterday. According to CEO Toby Rice, 2023 was a big year for the company which “set multiple drilling world records” and achieved its highest completion efficiency pace ever. Last year, EQT closed on the purchase of Tug Hill and XcL Midstream, adding major assets to the company’s portfolio. In 2023, EQT signed 2.5 million tons per annum (MTPA) of LNG export agreements to export roughly 5% of EQT’s total natural gas production. The company produced 2,016 billion cubic feet equivalent (Bcfe) in 2023, which works out as 5.52 Bcfe per day. As for 2024, Rice says his company is ready and quite willing to throttle back on production and do less drilling than previously planned…if the price of natural gas stays low.
NFG Quarterly Update – Seneca M-U Production Up Big 11% | Marcellus Drilling News - National Fuel Gas Company (NFG), headquartered in Buffalo, NY, is the parent company for Marcellus/Utica driller Seneca Resources and the parent of midstream company NFG Midstream (and subsidiary Empire Pipeline). Last week, NFG issued its latest quarterly update. During the quarter (considered the company’s first quarter), Seneca produced 100.8 Bcf (billion cubic feet) of natural gas, an increase of 10.2 Bcf, or 11%, from the prior year, mainly due to production from new Marcellus and Utica wells in Seneca’s Eastern Development Area (EDA).
Webb, Lupardo lead legislative effort to ban carbon dioxide fracking - Pipe Dream - State lawmakers recently introduced a bill to ban the use of carbon dioxide (CO2) to drill and extract natural gas and oil resources. The bill, proposed by State Sen. Lea Webb and Assemblywoman Donna Lupardo in late January, would close a loophole in the Climate Leadership and Community Protection Act, New York state’s nation-leading climate law banning fracking operations. While the state prohibits using water to frack natural gas, companies have used CO2 as an alternative method. The bill comes alongside efforts from Southern Tier CO2 to Clean Energy Solutions, a Texas-based company, to convince Southern Tier landowners to lease their land to extract gas by injecting supercritical carbon dioxide into the Marcellus shale formation since fall 2023. Offers went to landowners with over 30 acres of land in Broome, Tioga and Chemung counties. The company plans to utilize CO2 to extract methane gas from the Marcellus and Utica shales, in a method more environmentally friendly than hydraulic fracking. “The technique relies heavily on the unique properties of carbon dioxide when in its supercritical phase and the affinity of shale, especially shale containing elevated levels of organic content, to absorb carbon dioxide while desorbing methane gas preferentially,” their website says. In November, Webb and Lupardo sent a letter to Basil Seggos, the New York State Department of Environmental Conservation’s commissioner, to investigate Southern Tier Solutions and its proposed method to use carbon dioxide to extract fossil fuels. In the letter, Lupardo claimed that residents came to her with concerns about the impact CO2 fracking could have on the community. “This process uses directional drilling that first bores vertically deep underground to reach the Marcellus or Utica shale layer and then uses directional drilling to slowly bend the drill path sideways to drill parallel to the plane of the shale layer and try to stay roughly centered between top of the layer and bottom of the layer as they drill approximately horizontally within the shale layer for perhaps a mile or two,” Valdi Weiderpass, the Sierra Club’s Susquehanna Group chair, wrote in an email. “This process is akin high volume hydraulic fracturing, also nicknamed ‘fracking’, except this proposal would be using CO2, so environmentalists refer to it as CO2 ‘fracking.’” Environmentalist groups argue that CO2 fracking poses a great risk to the environment. According to Sandra Steingraber, a senior scientist with Science and Environmental Health Network, a nonprofit, any form of extraction requires industrializing the landscape, resulting in numerous environmental problems, including habitat destruction, soil erosion and destroyed wildlife. Steingraber also said that CO2 fracking would cause more problems because of liquified CO2’s toxicity, leaving local water supplies at risk of being contaminated and becoming harmful to humans.
Bill That Would Ban New Fracking Method Advances in Assembly - A new bill (S.8357/A.8866) that would ban the use of carbon dioxide for fracking and gas extraction has been introduced in the Legislature following reports that homeowners in New York’s Southern Tier are being asked to lease their land by a fracking company. Southern Tier CO2 to Clean Energy Solutions, or Southern Tier Solutions, a Texas-based natural gas production company, started sending letters to residents last summer according to Assemblywoman Lupardo, D–Endwell, one of the bill’s co-sponsors. After learning that more than 6,000 residents received letters from the company, Lupardo and Senator Lea Webb, D–Binghamton, the Senate bill sponsor, sent a letter to the DEC in November requesting information about the company. The DEC responded in December, writing that the company had not reached out to the agency about the projects, and that if they were to receive permit applications from Southern Tier Solutions, there would be a “thorough review” to “ensure the agency’s decision is protective of public health and the environment.” “Our community has been through a lot when it comes to promises made about drilling in the Marcellus and Utica shale,” Assemblywoman Lupardo said. “In 2021 we permanently banned fracking with water, five years after it was initially banned by Executive Order. We now need to make sure that carbon dioxide is prohibited from being used in gas or oil extraction as well, by adding three words to our existing law. “We cannot allow a company with an unproven track record to move forward with this environmentally risky process.” While hydraulic fracking has been banned in New York since 2021 — and halted since 2014 via executive order — current law makes no mention of the use of CO2 for fuel extraction, a process that has been described as “experimental, dangerous and threatening to our water, health and climate,” by Food and Water Watch, an environmental group opposed to fracking. “It’s like conducting a chemistry experiment below our feet,” said Dr. Sandra Steingraber, a biologist who has extensively researched fracking and its effects, during a press conference. Dr. Steingraber stressed there is a lack of in-depth understanding about the interactions between CO2 and the shale formations Southern Tier Solutions is looking to drill into. Other risks associated with CO2 fracking include the creation of waste, leakage, habitat destruction, soil erosion, species die-offs, and increased risk of earthquakes, according to Steingraber and others who oppose the process. “Southern Tier Solutions doesn’t have adequate answers for questions about safety and contamination risks,” said Valdi Weiderpass, a chemical engineer and chair of the the Sierra Club’s Susquehanna Group. “The process of drilling and pressurizing CO2 and extracting gas releases countless chemicals and pollutants that can harm our food, water, air and bodies.” Supporters of the bill have also expressed concern about the possibility of CO2 pipes rupturing and causing public health issues. On Feb. 22, 2020 in Satartia, Mississippi, a pipe carrying CO2 ruptured and led to a mass poisoning that hospitalized 45 people. A first responder likened the affected area to a scene from a zombie apocalypse. “Pressurized CO2 transportation and ground injection poses severe health and environmental threats,” said Assemblywoman Anna Kelles, D–Ithaca, the bill’s prime sponsor. “Pressurized CO2 is highly caustic when in the presence of the smallest amount of water. Assemblywoman Anna Kelles “To use this CO2 for oil and gas extraction it must be transported through a spiderweb of thousands of miles of pipelines across the country, risking pipe corrosion and ruptures,” she said The bill S.8357/A.8866 would amend the current law banning state fracking to include just three more words: “and carbon dioxide.” The bill’s sponsors are attempting to pass it as part of the budget to avoid the issue being pushed off. “The sooner the better,” said Lupardo. The Assembly bull has advanced to a third reading and is ready for a floor vote. The Senate bill is currently in the Environmental Conservation Committee.Antero 4Q – Production Up 6%, Profits Down 87%, 21 New Wells | Marcellus Drilling News Antero Resources, which is 100% focused on the Marcellus/Utica with over 500,000 net acres under lease (and the largest M-U driller in West Virginia), issued its fourth quarter and full-year 2023 update yesterday. The company reports net production averaged 3.4 billion cubic feet equivalent per day (Bcfe/d) during 4Q23, an increase of 6% year-over-year. Production for the full year 2023 averaged 3.4 Bcfe/d as well. Of the company’s 2023 production, liquids (NGLs) averaged 193 thousand barrels per day (MBbl/d), an increase of 14% from 2022. Natural gas production averaged 2.2 Bcf/d, up 2% from 2022. The company made $95 million in 4Q23 versus a profit of $730 million in 4Q22 — down a big 87% year over year. For 2023, Antero made $243 million versus $1.9 billion in 2022, down 87% year over year.
Desperate Antis Ask Va. Regulators to Block Work on 99% Done MVP - Marcellus Drilling News - Last Thursday, 29 far-left nutball groups wrote Mike Rolband, Director of the Virginia Department of Environmental Quality (DEQ), demanding that he issue a stop work order for the 99% completed Mountain Valley Pipeline (MVP) due to “repeated and widespread violations and damage to waterbodies and private property.” This isn’t the first time these groups have demanded regulators intervene to block MVP based on flimsy grounds. The 29 radical groups include Wild Virginia, The Wilderness Society, Virginia League of Conservation Voters, West Virginia Rivers Association, Chesapeake Climate Action Network, and others (most of them obscure, one-person “groups” pretending to be bigger than they are).
Southwest Virginia landowners' Mountain Valley Pipeline lawsuit dismissed again - A three-judge panel of a federal appeals court has again dismissed a lawsuit from six Southwest Virginia landowners who say their land was improperly seized to build the Mountain Valley Pipeline. Cletus and Beverly Bohon of Montgomery County, Wendell and Mary Flora of Franklin County, and Aimee and Matt Hamm of Roanoke County argue that Congress erroneously delegated eminent domain power to the Federal Energy Regulatory Commission, which in 2017 authorized pipeline developers to use that power to take land for the 303-mile natural gas project. The judges on Tuesday reaffirmed their June 2022 agreement with a district court’s ruling that dismissed the lawsuit against FERC and Mountain Valley, stating that under federal law the district court lacks jurisdiction to hear the landowners’ lawsuit filed in 2020 because the appeals court already took up a related case filed in 2018. “In other words, the Bohons’ suit came too late,” wrote judges Cornelia Pillard, Robert Wilkins and Justin Walker of the U.S. Court of Appeals for the D.C. Circuit. Mia Yugo, an attorney with the Roanoke-based law firm Yugo Collins who represents the landowners, said they will appeal to the U.S. Supreme Court a second time. The high court already sent the case back to the D.C. Circuit once, in April, after the landowners appealed the previous dismissal. Yugo said Tuesday’s ruling failed to address the challenge to FERC’s authority and said recent Supreme Court rulings in other cases confirm the landowners’ position that such a challenge must be decided by trial in district court. “Private property is the bedrock of liberty,” Yugo said in a statement. “This case presents a critical issue for the country. The Landowners are entitled to their day in court and that should have already happened.” A FERC spokesperson declined to comment Wednesday, saying the agency doesn’t comment on matters before the courts. Mountain Valley Pipeline spokesperson Natalie Cox said in an email that Mountain Valley is pleased with the outcome of the court decision. The pipeline is planned to run from West Virginia through six Virginia counties, ending at a compressor station in Pittsylvania County. Equitrans Midstream, the company that owns a majority stake in the joint venture, says the pipeline is scheduled to be operational this quarter. The project was first announced in 2014 and initially was scheduled to be complete in 2018 with a price tag of $3.5 billion. It has been delayed by years of legal and permitting challenges as its cost estimate has more than doubled to $7.2 billion. Supporters say the pipeline will help transport natural gas from Appalachian shale deposits to mid- and south Atlantic U.S. markets, meeting a need for domestic energy. Opponents have said the project is unnecessary, unsafe and harmful to the environment. Lawsuits focusing on the pipeline’s impact on federally protected endangered species and national forests were dismissed in August. Judges cited legislation from this past summer that kept the U.S. from hitting its debt ceiling and also included a provision approving the pipeline’s remaining outstanding permits and shielding those permits from further legal challenges. In October, the landowners filed an emergency injunction to have construction work on their land stopped while their case was pending. The same three-judge panel denied that request. The Richmond-based 4th Circuit U.S. Court of Appeals is scheduled to hear oral arguments later this year in a related case regarding compensating the Bohons for the land seized by eminent domain.
MVP Gauges Support for Southgate Natural Gas Extension as Mainline Shows Heartbeat - Mountain Valley Pipeline LLC (MVP) is conducting an open season for natural gas deliveries along its revamped Southgate extension planned for 550,000 Dth/d capacity. The non-binding open season runs through Friday (Feb. 16) and is for firm transportation service in Rockingham County, NC. MVP said it is targeting an in-service date of mid-2028. After years of regulatory setbacks, MVP in December scaled back the Southgate project to run 31 miles from its mainline terminus in Virginia into North Carolina, from an original 75 miles. The redesign upped the planned firm capacity to 550,000 Dth/d from a previous 375,000 Dth/d.
U.S. NatGas Production Nears All-Time High Again – No Slowdown - Marcellus Drilling News - - U.S. natural gas production in the Lower 48 states is once again very close to all-time high levels, contrary to the blatherings of groups like the International Energy Association (IEA), which continues its meme that both oil and natgas either already have or will soon peak in demand. That’s just not happening here at home. Natural gas production is up to nearly 104.5 Bcf/d (billion cubic feet per day) over the last week, not far off from the all-time highs of nearly 105.7 Bcf/d recorded in December, according to data from S&P Global Commodity Insights.
Certified natural gas is ‘dangerous greenwashing scheme’, US senators say -- Certified natural gas – or methane gas that is purportedly produced in a low-emissions manner – is a “dangerous greenwashing scheme”, a group of progressive senators wrote in a letter to federal regulators on Monday. The letter, addressed to Federal Trade Commission chair, Lina Khan, comes as the agency prepares to release its updated Green Guides, which clarify when companies’ marketing claims around sustainability violate federal laws barring consumer deception, giving regulators stronger legal cases against polluters. Those guidelines should “crack down” on claims made by gas certification programs, the lawmakers, led by Massachusetts’s Ed Markey, wrote. “The reality is that gas certification schemes allow the oil and gas industry to justify the continued expansion of methane gas use and undermine efforts towards a just transition to renewables,” says the letter, which was also signed by the senators Jeff Merkley, Sheldon Whitehouse, Elizabeth Warren, Richard Blumenthal, Bernie Sanders and Cory Booker. The gas sector has long branded itself as climate-friendly, noting that when burned, the fuel generates less planet-heating carbon dioxide than other fossil fuels. But gas – called “natural gas” by fossil fuel interests – is made of methane, a greenhouse gas 80 times more planet-heating than carbon dioxide in the short term. Some research even indicates the fuel is worse for the climate than coal.Amid increasing public concern about gas usage and the climate crisis, a new industry of third-party gas “certifiers” has cropped up. These companies develop standards that they use to proclaim that certain producers are reducing emissions from their fracking wells, pipelines and storage facilities, and therefore generating gas sustainably.The companies can then deem certain gas “certified”, “responsibly produced” or “differentiated”, allowing producers to sell it at a premium. Utilities in New York, Vermont, New Jersey, Michigan and Virginia have purchased certified natural gas and plan to pass on the additional costs to customers, the non-profit watchdog organization Revolving Door Project found last year.“Those same consumers are still exposed to hazardous air pollution from burning gas in their homes, and combusting that gas is still contributing to the climate crisis,” said Hannah Story Brown, senior researcher at Revolving Door Project.Gas certifiers’ standards have not appeared to stand up to closer scrutiny. In 2022, for instance, the environmental non-profits Earthworks and Oil Change International spent seven months auditing sensor technologies used by Project Canary, an industry leader among gas certifiers. The groups concluded in a report released last year that the company was consistently failing to detect methane leaks during drilling, fracking, flaring and venting. (Project Canary has said in response that the report contains “inaccurate and misleading claims”.)This lack of robustness, the lawmakers write, comes as no surprise. “The gas companies’ profits depend on the monitoring companies certifying their gas, and the monitoring companies’ profits depend on willing industry customers,” they said. “Thus, there is no incentive to ensure the accuracy of emissions measurements.”
D.C. Circuit grills FERC in LNG export fight - A pair of Biden-appointed judges signaled Monday that the Federal Energy Regulatory Commission may need to take a closer look at climate and air quality impacts of the liquefied natural gas export terminals the agency approves. The remarks from judges of the U.S. Court of Appeals for the District of Columbia Circuit came during oral arguments over FERC’s certification of a Louisiana LNG project. The hearing occurred just two weeks after the Biden administration announced that a separate agency — the Department of Energy — would pause new LNG export approvals to better account for climate impacts when deciding whether the projects are in the public interest. Two D.C. Circuit judges questioned how that analysis was playing out at FERC, which approves siting and construction of new LNG facilities. The court has previously required FERC to beef up its consideration of greenhouse gas emissions from the energy projects it oversees. Advertisement “I don’t know why [FERC] would be so reluctant to find significance. It seems easier than litigation like this,” said Judge Florence Pan. Pan, a Biden appointee, pressed FERC attorney Susanna Chu to explain how high a project’s emissions had to be to prompt the agency to explore other alternatives. “I think the bottom line is there is no line that you would think greenhouse gas emissions are significant,” said Pan, after some back and forth. The arguments Monday centered on environmental groups’ challenge against FERC’s approval of Commonwealth LNG. The project is slated to be one of about a half-dozen proposed and existing LNG export facilities in southwest Louisiana, including the massive planned CP2 LNG terminal. Pan said that Commonwealth LNG’s emissions are 36 times higher than FERC’s proposed threshold for considering a project’s emissions “significant.” Chu said that FERC has withdrawn that policy. “Why isn’t this project significant under any proposal that you might adopt?” Pan said. Judge Brad Garcia also drilled down on how FERC accounts for cumulative air quality effects of building a project in an area that is expected to host several other LNG terminals. FERC had found that the levels of air pollution from nitrogen dioxide would not be significant, said Chu Even if the emissions from one facility are incremental, said Garcia, a Biden appointee, “why is that relevant to the total level [of emissions], which is what cumulative impacts analysis is asking [FERC] to talk about?” Later in the hearing, he asked John Longstreth, a partner at the firm K&L Gates representing Commonwealth LNG, why FERC would not consider emissions significant if they were counted alongside pollution from other facilities. “It literally does not compute in my head,” Garcia said. The judge also asked Chu to explain why FERC’s determination that Commonwealth LNG was in the public interest was not a basis for sending the analysis back to the agency to offer a better explanation. Chu responded that the Natural Gas Act presumes that LNG exports to free-trade-agreement nations are in the public interest, and DOE has already authorized the shipments. FERC “felt it was on firm ground on approving [the project], because it was required to do so,” she said.
Coalition of states criticize Biden's natural gas export freeze – A coalition of about two dozen state attorneys general sent a letter to President Joe Biden Tuesday blasting the president's recent decision to freeze the approval of new export sites for liquefied natural gas. Biden announced the freeze last month, citing climate change concerns. The attorneys general called on Biden to end the pause, saying it will hurt the economy, national security, and violated federal law. "Your administration's planned 'pause' – which we might more accurately call a series of constructive denials – of most American LNG exports is unlawful for several reasons," the letter said. The attorneys general goes on to lay out those reasons, saying the Department of Energy does not have legal authority to writ large deny the export permits. The letter also points out the agency did not go through the standard rulemaking procedure, a lengthy process that allows input from stakeholders. "Generally, agency legislative rules must go through the APA's notice-and-comments procedures," the letter said. "And the pause here is a substantive rule required to go through that process. The pause effectively commands the Department to stop performing its obligations under the NGA to approve export applications and does not leave the agency free to exercise discretion unless it chooses to disobey the policy. "That's the exact type of substantive rule that needs to go through notice and comment because it modifies substantial rights," the letter adds. The letter comes the same day that House Energy and Commerce Chair Rep. Cathy McMorris-Rodgers, R-Wash., held a hearing Tuesday on the export pause. "The administration has made its intentions clear," she said at the hearing. "This is not a 'pause,' as they've claimed. This is a ban. The administration is ignoring the fact that natural gas continues to create millions of new jobs, bring manufacturing back to the U.S., and revitalize communities across the country. The natural gas industry supports millions of jobs and brings tens of billions of dollars to the U.S. economy. "In 2022, in Pennsylvania alone, the natural gas industry supported $41.4 billion in economic activity, and shale gas development supported over 120,000 jobs," Rodgers added. Over the weekend, about 150 House Republicans sent a letter to Biden criticizing the gas freeze. The letter argues that administrations from the left and right have supported gas exports. Energy exports have become increasingly important given the global conflicts with Russia and Ukraine and in the Middle East, two of the world's most important energy export areas. Some House Democrats have also attacked Biden's decision, but the White House has stood by it, pointing out that the U.S. is already the world leader in these exports and that those exports are expected to significantly grow in the coming years. "We also must adequately guard against risks to the health of our communities, especially frontline communities in the United States who disproportionately shoulder the burden of pollution from new export facilities," the White House said in a statement. "The pause, which is subject to exception for unanticipated and immediate national security emergencies, will provide the time to integrate these critical considerations."
Future of US LNG hangs in balance as White House weighs geopolitical, environmental interests— The first shipment of U.S. liquefied natural gas left Cheniere Energy’s Sabine Pass export terminal in Louisiana almost eight years ago, ushering in a new age of American energy exportsto allies around the globe and generating tens of billions of dollars a year for the U.S. economy.But with climate change now gaining bandwidth in global leaders’ minds, the greenhouse gas emissions produced by LNG, while in some respects markedly less than coal, are driving a tense assessment within the Biden administration about whether building more LNG terminals is in the world’s best interests, while they put a pause on permitting.At the center of that debate is the network of American allies now dependent on U.S. LNG, for whom a reduction in American supply could have far-reaching implications beyond climate change, affecting the economic relationships around which so much diplomacy is built.“The climate concerns are real, and they deserve a serious, hard look, but there’s other geopolitical and market considerations we need to take into account,” said Ben Cahill, a fellow at the Center for Strategic and International Studies, a Washington think tank. “The fact is, gas demand is going to be with us for a long time and there will be multiple suppliers vying to meet that market demand.”The United States exported more than 88 million tons of LNG last year, surpassing Qatar and Australia to become the world’s largest supplier. And with multiple terminals under construction along the Gulf Coast, the sector is expected to grow exponentially in the decades ahead, with research company Wood Mackenzie projecting LNG exports from the U.S. and Mexico to reach a capacity of 238 million metric tons per year by 2050, accounting for 30% of global supply.But in a note to clients last week, the company warned that while a short-term pause on U.S. LNG permitting was unlikely to have much impact on global energy markets a sustained interruption could “have lasting implications on the global LNG market and could affect how buyers perceive US LNG."“While we expect existing LNG buyers to wait in the short term, these and other potential new buyers could start to look at competing projects outside of the U.S., such as those in Canada, Australia and particularly Qatar, as alternative supply sources,” wrote Giles Farrer, head of gas research at Wood Mackenzie.
Rockefellers, Bloomberg Behind Campaign to Block LNG Exports - Marcellus Drilling News -- So-called “charities” (really nothing of the sort) controlled by Rockefeller family billionaires and charities controlled by billionaire Mike Bloomberg provided millions of dollars in recent years to environmental groups that are campaigning against fossil-fuel projects, including LNG terminals that have been proposed on the Gulf Coast, according to insiders. So says an article recently published in the Wall Street Journal. Frankly, we’re not surprised. Nobody should be surprised that billionaire Democrats are funding these anti-fossil fuel crusades. What everyone SHOULD be surprised by is that the billionaires’ charities are tax-exempt and that they are funding tax-exempt nonprofits to engage in overtly political activities — activities that violate the IRS tax code for nonprofits. Why are ANY of the participants in this scheme tax-exempt?
The unlikely coalition behind Biden’s liquefied natural gas pivot - Environmental activists and community organizers on the Gulf Coast have spent years pressuring the Biden administration to halt the construction of terminals that export liquefied natural gas, or LNG. As U.S. production of natural gas skyrocketed over the past few decades, energy companies began building massive coastal facilities to liquefy the fossil fuel and transport it by ship to Europe, Asia and elsewhere. In response, activists staged protests, organized sit-ins, wrote to members of Congress and broadly made the issue Biden’s “next big climate test.”When the administration announced that it would pause its approval of new LNG terminals late last month, the climate movement and its allies were largely credited with the victory. Bill McKibben, the renowned founder of 350.org (and a former Grist board member), began his blog post about the news by saying, “Um, I think we all just won.” The decision reportedly came about after senior administration officials, including White House climate advisor Ali Zaidi, learned that young activists on TikTok were drawing millions of views elevating LNG as a major climate issue. As if to prove the president was listening, the White House has collected dozens of quotes from climate advocates praising the decision. (In some ways, the activists’ celebration belies the reality that the climate impact of constricting LNG exports is far from certain, and the devil is in the details: While a broader buildout certainly has the potential to promote unnecessary fossil fuel use, it may also speed other countries’ transition away from other, more harmful fossil fuels like coal.) But a broader, less-climate-concerned coalition, representing thousands of manufacturers, chemical companies and consumer advocates, has also been quietly pushing for the pause — and stands to benefit if Biden curbs LNG exports. The more American natural gas that’s available to be shipped overseas, they argue, the more unpredictable the price of the fuel will be stateside. If, for example, an unexpected gas shortage in another country means U.S. gas companies can make more money selling their product overseas than they can at home, prices will rise as the supply is stretched thin. This volatility would hurt not only households that heat and power their homes with natural gas but also the profit margins of big companies that rely on the fuel.“LNG exports put pressure on domestic markets, which…results in higher energy costs,” said Mark Wolfe, executive director of the National Energy Assistance Directors Association, an organization representing state officials who administer federal energy assistance programs that help low-income households pay energy bills. “There’s an impact on families that are benefiting from these lower prices. That needs to be taken into account.”Wolfe said that average home heating prices have risen more than 16 percent since March2020, driven in large part by higher natural-gas prices. (Hotter summers also mean utilities need more fuel to power a grid stretched thin by air conditioning in the summer and therefore have less natural gas for heating in the winter.) The result is that 1 out of 6 households nationwide are behind on their energy bills. “If the administration wants to approve these facilities, they should do it in the context of saying, ‘How do we help families pay their bills?’” Wolfe added. It’s not just cash-strapped families that might benefit if LNG exports are limited: The Industrial Energy Consumers of America, or IECA, a trade group representing more than 11,000manufacturing facilities nationwide, has also been arguing against LNG exports. IECA’s members include fertilizer companies, aluminum smelters and glass manufacturers, among others. These industries are heavily dependent on natural gas either as feedstock for production or to fuel their operations. As natural-gas prices rose in 2022, heavy industries that require large amounts of natural gas or electricity — such as fertilizer production and aluminum smelting — saw their costs skyrocket. That year, multiple steel mills, as well as the country’s second-largest aluminum smelter,paused operations in the face of unsustainable costs.Paul Cicio, IECA’s president, has been imploring the federal government to curb natural-gas exports since the Obama administration. The last three presidential administrations “have just ignored consumers’ interests,”
House Votes to Reverse Biden’s Pause on New LNG Exports – The U.S. House of Representatives passed a Republican-sponsored bill on Thursday to reverse the Biden administration’s pause on authorizing new LNG exports. The bill would strip the Department of Energy’s role for determining whether LNG projects are in the public interest and give the Federal Energy Regulatory Commission exclusive authority to approve projects and export licenses. The Biden administration temporarily suspended new project authorizations last month while DOE reviews policies for approving more exports. The legislation faces an uphill battle in the Senate, where lawmakers passed a Ukraine aid bill on Tuesday without any amendments, despite calls from Republicans to tack on measures that would have reversed...
New Study Questions LNG as a “Bridge Fuel” in Decarbonization - For years, the petroleum industry has been trying to push liquefied natural gas as a clean energy source, or at least a cleaner energy source than other fossil fuels, touting its role as a stepping stone or ‘bridge fuel’ between higher-emissions fuels and clean energy in the decarbonization transition. But recent research shows that LNG may not always be cleaner than coal, the dirtiest fossil fuel.The debate over whether LNG is in reality a cleaner alternative to other fossil fuels has been reengaged in recent months as the Biden administration has announced that it will pause approvals of new licenses to export liquefied natural gas. Last Friday, President Joe Biden announced that during this freeze the United States Department of Energy will review and assess whether the nation’s considerable LNG exports are “undermining domestic energy security, raising consumer costs and damaging the environment.”This pause will have widespread implications for global energy markets, as the United States was the single biggest exporter of liquefied natural gas in the world in 2023. According to LSEG data, full year exports from the U.S. rose 14.7% to 88.9 million metric tons (MT), but from 77.5 million metric tons in 2022.As the Biden administration’s decision to pause new approvals makes waves around global energy markets, it’s also caused a major resurgence of the natural gas debate in scientific circles. We now know that natural gas is much more harmful for the environment than initially thought, but there is widespread disagreement about to what extent, and whether pausing exports is actually the right move for the environment.In December 2023, 170 climate scientists signed onto a letter petitioning President Joe Biden to reject all plans to build more LNG export terminals going forward, and especially along the Gulf of Mexico. Their argument was based on the finding that, in stark contrast to the dominant energy transition narrative, liquefied gas is actually “at least 24 percent worse for the climate than coal.” This figure comes from a forthcoming Cornell University study (which has not yet been peer reviewed).The issue is not really the consumption of the natural gas itself, but emissions associated with the life cycle of liquefied natural gas production. The Cornell University figure comes from figuring in the carbon dioxide emissions that result from the liquefying process, which requires chilling natural gas to extremely cold temperatures, an energy-intensive ordeal.Another major issue is the methane that is released during the extraction of natural gas. Methane is an extremely potent greenhouse gas. While it breaks up much more quickly in the atmosphere than carbon dioxide, it is 80 times more potent at warming than CO2 over a 20-year period. And peer–reviewed studies (like this one, this one, and this one) are increasingly indicating that natural gas produces much, much more methane over its life cycle than previously thought.But other experts contend that these figures, while peer-reviewed, are politically motivated and the figures are inflated or skewed to tell a certain narrative that’s not necessarily consistent with reality. “It’s just extremely frustrating to even deal with claims like this, because we talk about settled science,” says Dan Byers, vice president of policy at the U.S. Chamber of Commerce, where he works on environmental issues in a recent Scientific American report. “The notion that, you know, LNG and natural gas reduce emissions by displacing coal is completely well established. So it feels like we’ve got like a flat earth situation going on with these claims.”A recent op-ed in the Wall Street Journal goes as far as to contend that the Biden administration’s new LNG export pause will actually harm the environment more than it helps. In the op-ed Chris Barnard, president of the American Conservation Coalition, argues that if the United States takes a step back from meeting global energy demands, other energy powers including Russia and China will only be too happy to fill those shoes. He argues that the result will be a more volatile geopolitical landscape as well as an increase of more carbon-intensive energy sources on the market.As usual, the truth probably lies somewhere in the middle. But the one thing that’s certain is that regardless of whether coal or LNG is cleaner, clean energy buildout will always be the cleanest. Of course, LNG will continue to have a role in stabilizing, and yes, bridging a smooth energy transition. But the quicker we can move away from it, the better.
Chesapeake seals LNG deal with Delfin and Gunvor - US shale gas producer Chesapeake Energy has entered into an offtake deal with Delfin Midstream, the US developer of a floating LNG export project in the Gulf of Mexico, to supply LNG to Geneva-based trader Gunvor. Chesapeake said in a statement on Tuesday that the LNG export deal includes executed sales and purchase agreements for long-term liquefaction offtake. Under the SPA, Chesapeake will buy about 0.5 million tonnes per annum (mtpa) of LNG from Delfin at a Henry Hub price with a targeted start date in 2028. The firm will then deliver LNG to Gunvor on an free on board (FOB) basis with the sales price linked to the Japan Korea Marker (JKM) for a period of 20 years, it said. These volumes will represent 0.5 mtpa of the previously announced up to 2 mtpa heads of agreement with Gunvor, Delfin said. Also, these volumes will add to the SPA Gunvor signed with Delfin in November last year for up to 1 mtpa. Delfin plans to install up to four self-propelled FLNG vessels that could produce up to 13.3 mtpa of LNG or 1.7 billion cubic feet per day of natural gas as part of its Delfin LNG project. The firm also aims to install two FLNG units under the Avocet LNG project. Delfin said in November it had secured commercial agreements for LNG sales and liquefaction services and the firm was “in the final phase towards FID on its first three FLNG vessels”. Kalpesh Patel, co-head of LNG trading and a member of Gunvor’s executive committee, said the new deal “represents an important step in finalizing the 0.5 mtpa out of our total of 2 mtpa arrangement with Chesapeake, while expanding our existing cooperation with Delfin.” “We continue to provide reliable and competitive logistics services to our partners by utilizing our fleet consisting of vessels procured via term charters and equity ownership,” he said.
US weekly LNG exports reach 24 shipments - US liquefaction plants shipped 24 liquefied natural gas (LNG) cargoes in the week ending February 7, while natural gas deliveries to these terminals decreased by 4.9 percent compared to the week before. The EIA said in its weekly report, citing shipping data provided by Bloomberg Finance, that the total capacity of these 24 LNG vessels is 89 Bcf. The agency did not release its weekly report in the prior week. During the week of January 18-24, 2024, US terminals shipped 20 LNG cargoes. Natural gas deliveries to US terminals down Average natural gas deliveries to US LNG export terminals decreased by 0.7 Bcf/d week over week, averaging 13.3 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 1.4 percent (0.1 Bcf/d) to 9.2 Bcf/d, while natural gas deliveries to terminals in South Texas decreased by 15.1 percent (0.5 Bcf/d) to 2.9 Bcf/d. The agency said that nearly all the declines in South Texas occurred at Cheniere’s Corpus Christi LNG terminal, where natural gas receipts fell by, on average, 0.5 Bcf/d, or close to 25 percent week over week. Natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d. Cheniere’s Sabine Pass plant shipped nine cargoes and the company’s Corpus Christi facility sent three shipments during February 1 and February 7.Venture Global’s Calcasieu Pass LNG terminal sent four cargoes and the Freeport LNG terminal and Sempra Infrastructure’s Cameron LNG terminal each shipped three cargoes during the week under review. Also, the Cove Point LNG terminal shipped two cargoes, while the Elba terminal did not ship cargoes during the period.This report week, the Henry Hub spot price fell 26 cents from $2.23 per million British thermal units (MMBtu) last Wednesday to $1.97/MMBtu this Wednesday, the lowest price since June 12, 2023, the agency said. The price of the March 2024 NYMEX contract decreased 13.3 cents, from $2.100/MMBtu last Wednesday to $1.967/MMBtu this Wednesday. According to the agency, this is the lowest settlement price for the March 2024 contract since trading of this contract began 12 years ago. The price of the 12-month strip, averaging March 2024 through February 2025 futures contracts, declined 12.5 cents to $2.641/MMBtu, the agency said. The agency said that international natural gas futures were mixed this report week. Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia rose 4 cents to a weekly average of $9.46/MMBtu. Natural gas futures for delivery at the Dutch TTF fell 6 cents to a weekly average of $9.07/MMBtu. In the same week last year (week ending February 8, 2023), the prices were $18.30/MMBtu in East Asia and $17.83/MMBtu at TTF. The last time early-February prices at TTF averaged below $10/MMBtu was in 2021, the agency said.
Venture Global Asks FERC for 1-Year Extension of Calcasieu Pass LNG Commissioning - Work at Venture Global LNG Inc.’s Calcasieu Pass export facility could stretch on until the end of the year, requiring the firm to seek an authorization extension from FERC, the company disclosed in a recent filing. The Virginia-based company has asked the Federal Energy Regulatory Commission to grant it an extra year to complete the commissioning of its first Louisiana export facility as it nears the Feb. 21 in-service deadline. Venture Global told FERC that it believed it qualified for an extension because it has made “good faith efforts” to advance the project, but issues with its electrical systems have prevented it from completing the commissioning process.
Energy Transfer Pushing Ahead with Warrior Natural Gas Pipeline to Expand Gulf Coast Transport - Energy Transfer LP has sold about 25% of capacity for its proposed 1.5-2.0 Bcf/d Warrior Pipeline, which it expects the market will need to meet natural gas transportation needs along the Gulf Coast within the next few years, executives said. During a fourth quarter earnings call, Co-CEO Marshall McCrea said the Dallas-based midstream giant had sold about one-quarter of the goal to reach a final investment decision (FID) for Warrior. He noted that negotiations continue for another 1.6-1.7 Bcf/d of commitments. The tentatively designed 42-inch diameter Warrior Pipeline would run 325 miles from the Permian Basin to interconnect south of Dallas, giving access to major Gulf Coast hubs including Katy, Beaumont, the Houston Ship Channel, and the Gillis and Henry hubs.
US natgas prices fall 5% to 3-1/2-year low on mild winter weather (Reuters) - U.S. natural gas futures fell about 5% on Tuesday to a fresh 3-1/2-year low on near-record output, ample amounts of fuel in storage and forecasts for warmer weather and less heating demand next week than previously expected. Traders also noted that gas flows to U.S. liquefied natural gas (LNG) export plants should remain reduced so long as a liquefaction unit at Freeport LNG's facility in Texas stays shut. The combination of near-record production and mostly warmer-than-usual weather and low heating demand so far this winter, other than an Arctic freeze in mid-January, has allowed utilities to leave more gas in storage. Analysts forecast inventories were currently about 15% above normal levels for this time of year. Energy traders said low prices usually encourage power generators to burn more gas instead of coal and prompts producers to cut back on gas drilling. But even if energy firms reduce gas drilling, gas output will likely still rise because oil prices CLc1 are high enough to encourage producers to seek more oil in shale basins like the Permian in Texas and New Mexico and Bakken in North Dakota. A lot of associated gas also comes out of the ground with oil in those shale basins. "Many gas producers are well-hedged and expecting an LNG demand boom beginning next year - and are loathe to cut flowing supplies ahead of the long-awaited opportunity," But EBW noted that "extreme price weakness may force producers' hands, weakening supply in low-demand shoulder seasons ... simply slowing new completions could balance the natural gas market." That may already be happening. U.S. producers drilled just 850 oil and gas wells in January, the least since February 2022, and completed just 863, which was also the least since February 2022, according to federal energy data. Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange fell 7.9 cents, or 4.5%, to settle at $1.689 per million British thermal units, their lowest close since July 2020 for a second day in a row. That put the contract down about 19% over the past six days of price declines. Financial company LSEG said gas output in the U.S. Lower 48 states rose to an average of 105.8 billion cubic feet per day (bcfd) so far in February, up from 102.1 bcfd in January, but still short of the monthly record high of 106.3 bcfd in December. Meteorologists projected the weather in the Lower 48 states would turn from warmer than normal now to colder than normal on Saturday and Sunday, Feb. 17-18, before returning to mostly warmer-than-normal from Feb. 19-28. With seasonally colder weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 124.0 bcfd this week to 129.0 bcfd next week. The forecast for next week was lower than LSEG's outlook on Monday. Gas flows to the seven big U.S. LNG export plants slid to an average of 13.6 bcfd so far in February, down from 13.9 bcfd in January and a monthly record of 14.7 bcfd in December. Analysts do not expect U.S. LNG feedgas to return to record levels until Freeport LNG is back at full power, which could occur in mid- to late February.
US natgas prices slide 2% to fresh 3-1/2-year low on small storage withdrawal (Reuters) -U.S. natural gas futures slid about 2% to a fresh 3-1/2-year low on Thursday on rising, near-record output and a smaller-than-expected storage withdrawal last week when warm weather kept heating demand low. That price decline occurred despite forecasts for more demand over the next two weeks than previously expected, and as some producers said they would reduce drilling in 2024 due to the recent price plunge. The U.S. Energy Information Administration (EIA) said utilities pulled a smaller-than-expected 49 billion cubic feet (bcf) of gas out of storage during the week ended Feb. 9. That was lowerthan the 68-bcf withdrawal analysts forecast in a Reuters poll and compared with a decrease of 117 bcf in the same week last year and a five-year (2019-2023) average decline of 149 bcf for this time of year. The combination of near-record production, mostly warmer-than-usual weather and low heating demand so far this winter, other than the Arctic freeze in mid-January, has allowed utilities to leave more gas in storage than usual. Stockpiles were about 16% above normal levels for this time of year. U.S. energy firm Antero Resources AR.N, a big gas producer, said it expects gas production to decline by about 3% in 2024 versus 2023. Antero also said it expects to cut its drilling and completion capital budget by 26% after reducing the number of rigs in operation to two from three, and cutting one of two completion crews. Comstock Resources, another big U.S. gas producer, made a similar announcement about reducing gas rigs earlier this week. But even if some energy firms reduce gas drilling, gas output could still increase because oil prices CLc1 are high enough to encourage producers to seek more oil in shale basins like the Permian in Texas and New Mexico and the Bakken in North Dakota. A lot of associated gas also comes out of the ground with oil in those shale basins. After falling about 24% over the last eightdays, front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange fell 2.8 cents, or 1.7%, to settle at $1.581 per million British thermal units, theirlowest close since June 2020 during theheight of COVID-19 demand destruction. That kept thecontract in technically oversold territory for an eighth day in a row for the first time since February 2018.
How Long Could U.S. Natural Gas Stay Below $2? Forecasts Say Not Long If E&Ps Turn Off ‘Spigot’ - U.S. natural gas markets are looking dire for sellers, with futures diving near depths last seen during the Covid-19 pandemic. Several catalysts lie ahead, though, that could create a floor and set the stage for a rebound, according to analysts. The March New York Mercantile Exchange (Nymex) contract fell below the $2.000/MMBtu level on Feb. 7 and hasn’t looked back, dropping in seven straight sessions, the latest on Wednesday, down 8.0 cents to $1.609. The contract traded as low as $1.590, within 11 cents of the lowest prompt-month close in the post-shale era of $1.482 in June 2020. Meanwhile, NGI’s Henry Hub spot prices fell 15.5 cents day/day to average $1.510 on Wednesday. The benchmark cash price last touched this level in July 2020.
Oil firms and green groups challenge Biden plan for offshore drilling leases - Oil and gas companies and environmental groups on Monday filed dueling legal challenges to the Biden administration’s five-year plan to offer drilling leases in the Gulf of Mexico. The petitions to a US appeals court come four months after the interior department unveiled a congressionally-mandated plan for offshore leasing that included just three sales, the lowest since the government began publishing the schedules in 1980. The American Petroleum Institute (API), an oil and gas trade group, said it was challenging the policy because it would leave Americans at risk of relying on foreign energy sources. “Demand for affordable, reliable energy is only growing, yet this administration has used every tool at its disposal to restrict access to vast energy resources in federal waters,” Ryan Meyers, the API general counsel, said in a statement. The petitions were filed in the US court of appeals for the district of Columbia. An interior department spokesperson declined to comment. Environmental group Earthjustice filed a separate petition challenging interior department’s plan on behalf of eight other environmental organizations. They allege the federal agency failed to adequately consider the health impacts the offshore drilling plan would have on local communities.
API Files Petition Challenging Biden Admin's Oil and Gas Leasing Program - The American Petroleum Institute (API) revealed in a statement posted on its site this week that it has filed a petition challenging the Biden administration’s 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program. The API highlighted in the statement that the Department of the Interior’s (DOI) final five-year program outlined a maximum of three potential oil and gas lease sales in the Gulf of Mexico Program Area in 2025, 2027 and 2029, which the API pointed out is the fewest oil and gas lease sales in a five-year program in history. The organization added in the statement that 2024 will be the first year since 1966 without an offshore lease sale. In its statement, the API noted that, for 45 years, the DOI has been required to prepare and maintain a five-year program that will best meet America’s energy needs for the ensuing five-year period, “detailing a schedule for regular oil and natural gas lease sales, including in the Gulf of Mexico”. For the first time, the DOI released the final five-year program for federal offshore leasing nearly 500 days late, the API said in the statement. “Demand for affordable, reliable energy is only growing, yet this administration has used every tool at its disposal to restrict access to vast energy resources in federal waters,” API Senior Vice President and General Counsel Ryan Meyers said in the statement. “In issuing a five-year program with the fewest lease sales in history, the administration is limiting access in a region responsible for generating among the lowest carbon-intensive barrels in the world, putting American consumers at greater risk of relying on foreign sources for our future energy needs,” he added. “Today, we are taking action to challenge this shortsighted program so that future generations of Americans will continue to benefit from our energy advantage for decades to come,” Meyers continued. Rigzone asked the DOI, the U.S. Department of Energy (DOE), and the White House for comment on the API statement and the filed petition. While the DOI declined to comment, the DOE and White House have not yet responded to Rigzone at the time of writing. The DOI published the Final 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program on December 15, 2023, noting in a statement posted on its website at the time that the plan phases down oil and gas leasing in the Gulf of Mexico and includes zero oil and gas lease sales in the Atlantic, Pacific, and Alaskan waters. “Consistent with the requirements of the Inflation Reduction Act (IRA) concerning offshore conventional and renewable energy leasing, the Department of the Interior today published the final 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program with the fewest oil and gas lease sales in history,” the DOI said in the statement on its site. “The IRA prohibits the Bureau of Ocean Energy Management from issuing a lease for offshore wind development unless the agency has offered at least 60 million acres for oil and gas leasing on the OCS in the previous year. The program schedules three oil and gas lease sales in the Gulf of Mexico Program Area in 2025, 2027, and 2029,” it added. “These three lease sales are the minimum number that will enable the Interior Department’s offshore wind energy program to continue issuing leases in a way that will ensure continued progress towards the administration’s goal of 30 gigawatts of offshore wind by 2030,” the DOI continued. “The reduction of the next National OCS Program to three lease sales meets the IRA’s requirements for future offshore renewable energy leasing. The areas considered for leasing and number of lease sales in the 2024-2029 Final Program have been significantly narrowed from the previous administration’s original proposal of 47 lease sales off all coastal areas in the United States,” it went on to state. According to the U.S. Energy Information Administration’s (EIA) latest short term energy outlook, which was released earlier this month, the U.S. produced 12.93 million barrels per day of crude oil last year, comprising 1.87 million barrels per day from the Federal Gulf of Mexico, 0.43 million barrels per day from Alaska, and 10.64 million barrels per day from the Lower 48 states, excluding the Gulf of Mexico. Dry natural gas production in the U.S. totaled 36.35 trillion cubic feet in 2022, according to EIA figures available on the organization’s website, which were last updated on January 31, 2024. The Federal offshore Gulf of Mexico made up 696.77 billion cubic feet of that total and the Alaska state offshore made up 41.19 billion cubic feet, the figures showed.
Tellurian’s Driftwood LNG Granted Three-Year Extension as FERC Rejects Critics’ Arguments - Federal regulators have approved a three-year extension for Tellurian Inc.’s Driftwood LNG export facility to begin operations, determining the Houston-based firm has demonstrated due diligence to complete the project, in light of the Covid-19 pandemic. During the recent open meeting, FERC authorized an extension through April 18, 2029 for the proposed liquefied natural gas export facility and associated pipeline project to reach completion (No. CP17-117-001, CP 17-118-001). Driftwood LNG has not yet been sanctioned. The estimated $1.28 billion project, which includes an LNG facility in Calcasieu Parish, LA, and a 37-mile bidirectional pipeline connecting Driftwood to the Haynesville Shale, could produce 27 million metric tons/year (mmty) at full scale.
U.S. Regulators Approve Saguaro Connector Linked to Mexico Pacific LNG Project - The U.S. Federal Energy Regulatory Commission (FERC) on Thursday approved Oneok Inc.’s proposed 2.8 Bcf/d Saguaro Connector natural gas pipeline, which would transport Permian Basin supply to the U.S.-Mexico border. The pipeline would transport gas to Mexico Pacific Ltd.’s Saguaro Energía LNG export plant envisioned for Puerto Libertad, Sonora, located on the country’s west coast. The re-export route would allow marketers of U.S. gas to bypass the Panama Canal, meaning that liquefied natural gas cargoes could reach the Asia Pacific market more quickly and cheaply.
FERC greenlights projects that could unleash gas exports - The Federal Energy Regulatory Commission approved two natural gas projects Thursday that seek to boost gas exports as a rift widens between the fossil fuel industry and environmental critics. FERC approved the Saguaro Connector pipeline — proposed by Oneok — that would run about 500 miles and transport 2.8 billion cubic feet of gas per day from Texas to the coast of Mexico. Commissioner Allison Clements, a Democrat, issued a partial dissent that urged FERC to evaluate the greenhouse gas emissions of such projects. But she said the Saguaro project’s potential greenhouse gas emissions appeared to be insignificant and concurred with the overall decision. The commission also approved a three-year extension to complete the Driftwood pipeline and liquefied natural gas terminal proposed by Tellurian in Louisiana. The project now needs to be completed by 2029. Ninety-six miles of pipeline would deliver gas to an LNG facility being built on a 1,200-acre site south of Lake Charles, Louisiana, that aims to ship more than 27 million metric tons of LNG each year to customers. FERC’s decisions coincided with a vote Thursday by the Republican-led House to give FERC the “exclusive authority” to approve LNG projects. The developments follow the Department of Energy’s LNG export approval freeze late last month, which pauses decisions on new export permits for gas headed to countries that lack a comprehensive free trade agreement with the United States. FERC Chair Willie Phillips, also a Democrat, said in a press briefing after Thursday’s meeting that the commission has been working on LNG independently from DOE. He said “FERC is responsible for the actual siting of LNG infrastructure” and “the Department of Energy is responsible for the actual export and import of LNG.” “We do not coordinate with the Department of Energy on those two determinations,” Phillips said. Environmental groups lauded the Biden administration’s decision at DOE and said it will help limit potent climate-warming emissions that can come from natural gas. But it sparked deep concerns from LNG exporters, Republicans, and some congressional Democrats over fears of impacting international allies and raising the price of natural gas at home. Tellurian spokesperson Joi Lecznar said in an email that the company is “grateful for FERC’s diligence” and thankful to commissioners for the extension of Driftwood’s construction timeline. Oneok spokesperson Annell Morrow said in an email that the company looks “forward to the opportunity to potentially move ahead” with the Saguaro project. Driftwood has an existing DOE permit to export LNG to countries that without free trade agreements with the United States. Environmental critics of natural gas railed against FERC’s gas decisions Thursday. “It’s alarming that FERC would approve the Saguaro Connector Pipeline based on a narrow environmental assessment that ignores the vast majority of the project and its impacts,” Doug Hayes, senior attorney for Sierra Club’s Environmental Law Program, said in a statement. Hayes called FERC “out of step with the reality of the climate crisis and communities impacted by these projects.”
What’s at Stake if the U.S. OK’s Building This Gas Pipeline to Mexico – DeSmog - In a rural area of West Texas, near the Mexico border, a cluster of geothermal springs once served as an oasis to the Carrizo/Comecrudo Tribe of Texas. Carpeted in grasses and shrubs, the land is home to rare aoudad sheep, deer, wild cats, and bobwhite quail. The muted tans and greens in the small valley and surrounding exposed rock mountains quiet the mind.The pristine site is in the proposed pathway of the 48-inch-diameter Saguaro Connector Pipeline, which would send natural gas produced in Texas’s Permian Basin 155 miles west, across the U.S.-Mexico border, to a liquefied natural gas (LNG) export facility in Puerto Libertad, Mexico.“Our concern is that the pipeline is going to go through the hot springs,” said Christa Mancias-Zapata, the executive director of the Carrizo/Comecrudo Tribe of Texas. “Anywhere you go in that area is a sacred site to our people.”Mancias-Zapata’s ancestors lived along the Rio Grande River delta and migrated to the site, called Indian Hot Springs, during hurricane season. The hot springs are located in the Chihuahuan Desert, making them a precious water resource for bathing and survival. Some also believed the minerals in the springs had healing properties. Local opposition to the pipeline, which would pass near the edge of the small town of Van Horn, is widespread. But a back-and-forth in permitting documentation between federal agencies and the company proposing the pipeline, ONEOK Inc, indicates a conflict within the White House with how to weigh its climate impacts, which could send up to 2.8 billion cubic feet of fracked gas per day to Mexico’s Pacific coast for export as LNG. The pipeline has not been approved yet by the Federal Energy and Regulatory Commission (FERC), which is only considering the impacts of the 1,000-foot segment of pipeline that crosses the border into Mexico. FERC is scheduled to consider approving the pipeline on Thursday. In Texas, pipelines don’t need to be permitted before they are built. Still, ONEOK has filed the required paperwork with the state.“For the Saguaro Connector Pipeline project, cultural and environmental surveys were conducted and provided to FERC and other stakeholders,” ONEOK spokesperson Annell Morrow wrote in an email. “Saguaro considered, and will continue to consider input from those stakeholders on the project location.”Last month, the Biden administration announced a pause in the permitting of 17 proposed LNG export facilities, including the largest in the U.S., Venture Global’s Calcasieu Pass 2 (CP2) LNG terminal, to allow the Department of Energy time to analyze the projects’ potential contributions to climate change and impacts on energy costs for Americans. A third-party lifecycle emissions analysis by Jeremy Symons, a former climate policy advisor for the U.S. Environmental Protection Agency, found that the CP2 project could result in 20 times more emissionsthan the controversial Willow drilling project in Alaska, which was approved by the administration last year. All together, the 17 proposed LNG export facilities that have been paused, and five that are under construction and not affected by the pause, could emit as much greenhouse gas as 675 coal-fired power plants.
EIA Estimates USA Crude Oil Output Hit All Time High In December - In its latest short term energy outlook (STEO), which was released last week, the U.S. Energy Information Administration (EIA) estimated that U.S. crude oil production reached “an all-time high in December of more than 13.3 million barrels per day”. The EIA noted in the STEO, however, that crude oil production fell to 12.6 million barrels per day in January “because of shut-ins related to cold weather”. “We forecast production will return to almost 13.3 million barrels per day in February but then decrease slightly through the middle of 2024 and will not exceed the December 2023 record until February 2025,” the EIA said in the STEO. In its latest STEO, the EIA highlighted that U.S. crude oil supply averaged 12.93 million barrels per day in 2023, comprising 10.64 million barrels per day from Lower 48 states, excluding the Gulf of Mexico, 1.87 million barrels per day from the Federal Gulf of Mexico, and 0.43 million barrels per day from Alaska. The organization outlined that the country’s crude oil output averaged 12.63 million barrels per day in the first quarter of 2023, 12.75 million barrels per day in the second quarter, 13.07 million barrels per day in the third quarter, and 13.29 million barrels per day in the fourth quarter. Looking ahead, the EIA projected in the STEO that U.S. crude oil production would average 13.10 million barrels per day in 2024, comprising 10.75 million barrels per day from Lower 48 states, excluding the Gulf of Mexico, 1.94 million barrels per day from the Federal Gulf of Mexico, and 0.41 million barrels per day from Alaska. U.S. output is expected to average 13.03 million barrels per day in the first quarter of this year, 13.12 million barrels per day in the second quarter, 13.06 million barrels per day in the third quarter, and 13.18 million barrels per day in the fourth quarter, the report outlined. In 2025, the EIA expects U.S. crude oil production to come in at 13.49 million barrels per day, comprising 11.11 million barrels per day from Lower 48 states, excluding the Gulf of Mexico, 1.98 million barrels per day from the Federal Gulf of Mexico, and 0.40 million barrels per day from Alaska, according to the report. The EIA projects in the report that U.S. crude output will average 13.37 million barrels per day in the first quarter of 2025, 13.46 million barrels per day in the second quarter, 13.50 million barrels per day in the third quarter, and 13.64 million barrels per day in the fourth quarter of next year. In its previous STEO, which was released in January, the EIA pegged 2023 U.S. crude oil supply at 12.92 million barrels per day, comprising 10.62 million barrels per day from Lower 48 states, excluding the Gulf of Mexico, 1.87 million barrels per day from the Federal Gulf of Mexico, and 0.43 million barrels per day from Alaska. That STEO projected that U.S. crude oil production would average 13.21 million barrels per day in 2024, comprising 10.88 million barrels per day from Lower 48 states, excluding the Gulf of Mexico, 1.92 million barrels per day from the Federal Gulf of Mexico, and 0.41 million barrels per day from Alaska. It also forecast that U.S. crude oil supply would average 13.44 million barrels per day in 2025, comprising 11.08 million barrels per day from Lower 48 states, excluding the Gulf of Mexico, 1.97 million barrels per day from the Federal Gulf of Mexico, and 0.40 million barrels per day from Alaska.
US oil output from top shale regions to rise in March -EIA - (Reuters) - U.S. oil output from top shale-producing regions will rise in March to its highest in four months, the U.S. Energy Information Administration (EIA) said on Monday in its monthly Drilling Productivity Report. Production from the top basins will rise by nearly 20,000 to 9.7 million barrels per day, its highest since December, EIA said. Oil output in the Permian basin, the largest shale field spread across West Texas and New Mexico, was due to rise by about 14,000 to 6.1 million bpd, the second highest monthly output on record after November, the EIA said. Production in the Eagle Ford in southeast Texas was due to rise to 1.1 million bpd, the highest since September, the EIA said. In the Bakken, output was set to rise to 1.2 million bpd, the highest since December. Sponsored Links
Report: Texas’ oil, gas production continues to surge - A report from the Texas Oil and Gas Association shows that the state’s energy industry is showing no signs of waning, boasting record levels of crude oil production as the federal government introduced further environmental regulations that industry leaders said are designed to hinder production. The latest version of the group’s annual report said that oil and gas companies paid $26.3 billion in state and local taxes in 2023, $1.5 billion more than last year, due in part to record fossil fuel extraction throughout the state. The report also said the oil and gas industry employed more than 480,000 Texans who make an average of $124,000 a year. Todd Staples, the association’s president, said the industry "has achieved these record-breaking milestones in spite of our federal government using every opportunity to thwart growth by delaying permits, canceling pipelines and introducing regulatory uncertainty.” President Joe Biden has taken steps to limit the amount of greenhouse gas emissions from the oil and gas industry through fossil fuel burning — which scientists have said contributes to climate change — with the Environmental Protection Agency finalizing a regulation in December directing operators to reduce their methane output. The administration also cut back on offshore drilling, awarding just three oil and gas leases through 2029. Last week, the administration halted pending approvals for some facilities that would export liquefied natural gas to other nations while the Department of Energy assesses their economic and environmental impacts. The product of those efforts has scarcely impacted oil and gas production in Texas. According to the Energy Information Administration, the state has outpaced the nation in oil and gas extraction and refining. Forbes reported in December that the U.S. set a new annual oil production record, based on federal data. The federal agency suggested in a report earlier this month that crude oil production in the U.S. will set records in 2024 and 2025 due to increased industry efficiency. However, growth will slow due to fewer active drilling rigs. Texas oil and gas companies produced as much as 5.6 million barrels a day in 2023, the highest that year, according to the agency, which collects and administers energy statistics. The state with the next highest production was New Mexico, which produced 1.8 million barrels a day at its peak. “2023 was such a blockbuster year that Texas effectively rewrote its oil and natural gas record book,” Staples said.
EIA Reports USA Crude Oil Stock Increase on Valentine's Day - In its latest weekly petroleum status report, which was released on Valentine’s Day, the U.S. Energy Information Administration (EIA) revealed that U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 12.0 million barrels from the week ending February 2 to the week ending February 9. Crude oil stocks in the U.S., not including the SPR, stood at 439.5 million barrels on February 9, 427.4 million barrels on February 2, and 471.4 million barrels on February 10, 2023, the report showed. Crude oil in the SPR totaled 358.8 million barrels on February 9, 358.0 million barrels on February 2, and 371.6 million barrels on February 10, 2023, the report revealed. Total petroleum stocks in the U.S. – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.591 billion barrels on February 9, the report outlined. This figure was up 5.9 million barrels week on week and down 38.7 million barrels year on year, the report highlighted. “At 439.5 million barrels, U.S. crude oil inventories are about two percent below the five year average for this time of year,” the EIA noted in its latest report. “Total motor gasoline inventories decreased by 3.7 million barrels from last week and are about two percent below the five year average for this time of year. Finished gasoline inventories increased, while blending components inventories decreased last week,” it added. “Distillate fuel inventories decreased by 1.9 million barrels last week and are about seven percent below the five year average for this time of year. Propane/propylene inventories decreased by 3.7 million barrels from last week and are one percent above the five year average for this time of year,” it continued. The EIA revealed in the report that U.S. crude oil refinery inputs averaged 14.5 million barrels per day during the week ending February 9, which it said was 297,000 barrels per day less than the previous week’s average. “Refineries operated at 80.6 percent of their operable capacity last week,” the EIA said in the report. “Gasoline production increased last week, averaging 9.2 million barrels per day. Distillate fuel production decreased last week, averaging 4.1 million barrels per day,” it added. According to the EIA report, U.S. crude oil imports averaged 6.5 million barrels per day last week, which the organization outlined was a decrease of 437,000 barrels per day from the previous week. “Over the past four weeks, crude oil imports averaged about 6.1 million barrels per day, 7.2 percent less than the same four-week period last year,” the EIA said in the report. “Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 436,000 barrels per day, and distillate fuel imports averaged 135,000 barrels per day,” it added. Total products supplied over the last four-week period averaged 19.8 million barrels a day, the EIA revealed in the report, highlighting that this was down by 0.3 percent from the same period last year. “Over the past four weeks, motor gasoline product supplied averaged 8.3 million barrels a day, down by 1.0 percent from the same period last year,” the EIA said in its report. “Distillate fuel product supplied averaged 3.7 million barrels a day over the past four weeks, down by 2.3 percent from the same period last year. Jet fuel product supplied was up 1.5 percent compared with the same four-week period last year,” it added.
Bad River Band and Enbridge offer oral arguments in Line 5 shutdown appeal ⋆ Representatives of the Bad River Band of Lake Superior Chippewa and Canadian pipeline company Enbridge Inc. gave their oral arguments before the U.S. Court of Appeals for the Seventh Circuit in Chicago on the case appealing the shutdown of Enbridge’s controversial Line 5 pipeline. The suit began in 2019, when the Bad River Band took action to remove the pipeline from their territory in Wisconsin after refusing to renew an easement on the pipeline that travels through the Bad River reservation, citing environmental concerns. While the easement expired in 2013, Enbridge refused to remove the pipeline from the parcels of land owned entirely, or partly by the tribe. The Bad River Band later filed for injunctive relief in May 2023, after spring flooding events created concerns that the pipeline would be exposed and ruptured. Line 5 stretches from Northwest Wisconsin, through Michigan into Sarnia, Ontario. It transports up to 540,000 barrels per day of crude oil and natural gas liquids. The U.S. Western District Court of Wisconsin ruled on June 16, 2023, that the pipeline company must shut down the section of Line 5 running through the tribe’s sovereign territory by June 2026, and pay the tribe $5.1 million, according to For Love of Water (FLOW), an advocacy group pushing to protect the health and access to water in the Great Lakes Basin. However, the court denied the Bad River Band’s request for an immediate injunction against Enbridge, with District Judge William M. Conley writing in his opinion that “an immediate shutdown of the pipeline would have significant public and foreign policy implications.” Enbridge appealed the decision. On Thursday, Enbridge attorney Alice Loughan argued the Bad River Band was not acting in accordance with the 1992 easement agreement, and that Conley’s order violated the 1977 transit treaty, which limits the authority of the U.S. and Canada to impede the flow of oil and natural gas between nations, according to FLOW. Enbridge Spokesperson Ryan Duffy said in a statement that Enbridge was not trespassing, as the 1992 treaty allows the company to remain on the reservation through 2043. Paul Clement, representing the Bad River Band of Lake Superior Chippewa, encouraged the court to affirm the lower court’s decision and to require an immediate shutdown of the pipeline rather than the current 2026 deadline, citing continued concerns with spring flooding and erosion. In his statement, Duffy said shutting down the pipeline before Enbridge can finish relocating the pipeline outside the reservation would “negatively impact businesses, communities and millions of individuals” who rely on the pipeline for energy. He also said the Canadian government had argued a shutdown before the pipeline can be relocated would violate the transit treaty. While a November report found the pipeline could be shut down without any shortages or price increases, Duffy responded to the report saying some of the report’s proposed solutions — such as transporting using rail and watercraft — would put the environment at risk. According to FLOW, the U.S. Appeals Court for the Sixth Circuit will hear oral arguments on March 21 in Nessel v. Enbridge, in which Michigan Attorney General Dana Nessel is seeking to shut down the pipeline in the Straits of Mackinac, due to concerns that the pipeline could rupture, leading to a catastrophic oil spill. Nessel will argue that the case rightfully belongs in state court, rather than federal court. Four tribal nations in Michigan — The Bay Mills Indian Community, Grand Traverse Band of Ottawa and Chippewa Indians, Little Traverse Bay Bands of Odawa Indians, and Nottawaseppi Huron Band of the Potawatomi — have also appealed a permitting decision from the Michigan Public Service Commission that would allow Enbridge to move forward with its Line 5 tunnel project, proposed as a solution to concerns of an oil spill in the straits of Mackinac. The project has received two of the three permit approvals needed to move forward, however the project’s approval from the Department of Environment, Great Lakes and Energy (EGLE) has also been challenged by the Bay Mills Indian Community. Both Enbridge and the tunnel’s opponents have spoken out against the USACE’s decision to delay publishing its Environmental Impact Statement on the project which is projected to publish in Spring 2025. Enbridge has argued this will delay the start of construction until 2026, while pipeline opponents are concerned this delay in decision making creates a greater window for disaster within the Straits.
Inside the decade-long campaign against the anti-pipeline fight | On the morning of March 5, 2012, Debra White Plume received an urgent phone call. A convoy of large trucks transporting pipeline servicing equipment was attempting to cross the Pine Ridge Reservation near the town of Wanblee, South Dakota. White Plume, a prominent Lakota activist, immediately dropped what she was doing and headed to the site, where, within a few hours, a group of about 75 people from the Pine Ridge Reservation gathered. “We have resolutions opposing the whole entity of the tar sands oil mine and the Keystone XL pipeline,” White Plume declaredafter arriving at the site where the trucks had been stopped. “They need to turn around and go back. … They are not coming through here.” The standoff in Wanblee was a relatively small protest compared to subsequent actions against the Keystone XL pipeline, which drew tens of thousands into the streets of Washington, D.C., and garnered national attention. Police arrested five activists, including White Plume (who died in 2020) and her husband, Alex White Plume Sr., on charges of disorderly conduct, and released them later that day. Beyond a few stories in Indigenous news outlets and regional papers, the protest hardly registered. Though tribes and landowners in the region had begun organizing around Keystone XL in 2011 and 2012, the pipeline had not yet become the galvanizing force for one of the largest campaigns in the history of the modern environmental movement. But the events in Wanblee did capture the attention of the Federal Bureau of Investigation, which began tracking Native groups campaigning against the pipeline in early 2012. According to documents obtained by Grist and Type Investigations through a Freedom of Information Act request, the FBI’s Minneapolis office opened a counterterrorism assessment in February 2012, focusing on actions in South Dakota, that continued for at least a year and may have led to the opening of additional investigations. These documents reveal that the FBI was monitoring activists involved in the Keystone XL campaign about a year earlier than previously known. Their contents suggest that, long before the Keystone and Dakota Access pipelines became national flashpoints, the federal government was already developing a sweeping law enforcement strategy to counter any acts of civil disobedience aimed at preventing fossil fuel extraction. And young, Native activists were among its first targets.“The threat emerging … is evolving into one based on opposition to energy exploration related to any extractions from the earth, rather than merely targeting one project and/or one company,” the FBI noted in its description of the Wanblee blockade.The 15-page file, which is heavily redacted, also describes Native American groups as a potentially dangerous threat and likens them to “environmental extremists” whose actions, according to the FBI, could lead to violence. The FBI acknowledged that Native American groups were engaging in constitutionally protected activity, including attending public hearings, but emphasized that this sort of civic participation might spawn criminal activity. To back up its claims, the FBI cited a 2011 State Department hearing on the pipeline in Pierre, South Dakota, attended by a small group of Native activists. The FBI said the individuals were dressed in camouflage and had covered their faces with red bandanas, “train robber style.” According to the report, they were also carrying walking sticks and shaking sage, claiming to be “Wounded Knee Security of/for Mother Earth.”“The Bureau is uncertain how the NA group(s) will act initially or subsequently if the project is approved,” the agency wrote.
Firefighters Respond to 150 Gallon Oil Spill in Antioch - At around 12:00 pm Wednesday, the Contra Costa County Fire Protection District was dispatched to the 3200 block of Delta Fair in the City of Antioch on a report of an oil spill. Initial reports stated approximently a 500 gallon oil truck was leaking. However, upon arrival, Contra Costa County firefighters reported 150 gallons of oil were on the ground and were contained. The reported the roadway could be open, however, a major cleanup effort was required. A short time later, it was determined to be motor oil. The spill was ultimately located between the Firestone Tire Shop and the bowling alley some oil spill at the tire shop. Several people reported this being a used oil container spilled over on truck picking it up from Firestone tire 1:00 pm Update from Contra Costa County Fire: On February 4, 2024, just after 12:00 p.m., Contra Costa Fire responded to Antioch for reports of a large oil spill. Firefighters found a 300 gallon container had been accidentally punctured and spilled approximately 150 gallons into a parking lot. Crews ensured the spill was contained and assisted with clean-up. No injuries were reported and there was no impact to storm drains or waterways.
A Biden oil sale may tick off the TikTok generation - President Joe Biden has a potential climate headache brewing in Alaska, where a congressionally imposed deadline requires him to hold an oil lease sale in the Arctic National Wildlife Refuge by December. It’s an unwelcome mandate for the president with the election looming, as he tries to woo voters concerned about climate change without putting off independents who may share Republicans’ rosier views of fossil fuel development. The challenge for Biden is particularly stark given how many Americans are unaware of the president’s signature climate actions, such as the passage of the Inflation Reduction Act. A Yale University poll released in December found that 58 percent of voters had heard “a little” about the law, which provided at least $369 billion in federal money to steer a transition to green energy. Biden’s record on federal drilling has been mixed. He’s throttled new leasing in many areas while increasing royalties and attempting to overhaul environmental regulations. Last year, he also canceled leases in the ANWR sold during the Trump administration. Most recently, he froze new permitting for natural gas exports so his agencies can review the climate and energy impacts of shipping the fossil fuel. But the president has also approved more new oil and gas wells than former President Donald Trump did in his first three years in office. Last year, Biden took a massive hit to his climate-conscious reputation when he approved ConocoPhillips’ Willow oil project in Alaska, with anger at the approval ricocheting across social media platforms like TikTok. Supporters of Biden are hoping he doesn’t catch the blame for the upcoming Arctic oil sale, given that he inherited it when he took office. The Republican tax overhaul in 2017 requires the sale — the second ever in the refuge. Paul Bledsoe, a former Clinton White House climate official, said the sale may not attract much industry attention or cause significant climate damage. The first ANWR auction, held at the tail end of the Trump administration, brought in only three bidders. “[Activists will] try to dramatize the irony that the climate-friendly president may be forced to do this,” Bledsoe said “But the truth of the matter is that it’s very unlikely that any of those leases are going to end up resulting in production.” Still, the president has proved reluctant to tamp down oil and gas production in the U.S. since taking office, and an oil sale in the sensitive Arctic refuge could add to boiling anger from some younger climate voters. “He can’t throw a bone to young people Monday, cave to oil and gas millionaires Tuesday, and expect to get young people to turn out for him,” said Stevie O’Hanlon, communications director for the Sunrise Movement, a climate organization.
Arc Resources Eyeing LNG Canada, Gulf Coast Exports to Fetch Top Prices for Montney Natural Gas - Calgary-based Arc Resources Ltd. plans to expand its Montney Shale natural gas production this year as it builds reserves for selling up to 25% of future output to global markets to capture the LNG export premium. To execute its strategy, total production in 2024 is forecast to average 350,000-360,000 boe/d, 63% weighted to natural gas. In 2025, output would average 375,000-400,000 boe/d, 60% gas weighted, CEO Terry Anderson said in the recent fourth quarter conference call. “Our approach is simple in concept,” he said. It’s to ensure a “balanced investment in our assets, with a meaningful return of capital to shareholders, guided by our principles of discipline and financial strength.
Mexico begins its own LNG buildout as US developers look to the south - At least a half-dozen LNG export projects are underway in the country — but whether most are completed will depend on politics to the north.LNG pipes at Sempra Energy's Costa Azul import terminal near Ensenada, Baja California, Mexico. Plans are in the works to add liquefaction and export capabilities to the site. (Don Bartletti/Los Angeles Times/Getty Images)Environmental activists have turned a spotlight in recent months on the rapid expansion of liquefied natural gas export terminals along the Gulf Coast of the United States, calling attention to the ramifications for nearby communities and the climate.But another buildout of liquefied natural gas (LNG) export terminals is occurring farther to the south, and this one so far has faced less public scrutiny.At least a half-dozen LNG export projects are in progress in Mexico, split evenly across the country’s east and west coasts. At least two of these facilities are under construction: New Fortress Energy’s Altamira plant in Tamaulipas, which is expected to begin operations in the next several months after its original startup date was pushed back last fall, and Sempra’s Energía Costa Azul plant at an existing LNG import terminal in Baja California. The remaining proposals are in earlier, and less certain, stages of development.While the planned export terminals are located in Mexico, they will mostly process and ship natural gas that is sent in by pipeline from gas fields in the U.S., including the Permian Basin in Texas and New Mexico. Western drillers with large gas supplies and limited access to the Gulf have viewed Mexico as their most promising gateway to international markets ever since plans for terminals on the U.S. West Coast fell through.The U.S. already exports more gas to Mexico than to any other country: Nearly one-third of all U.S. gas exports — just under 5% of total U.S. gas production — went to Mexico in 2022, federal data shows. Virtually all of it was transported by pipeline. Mexico, for its part, imports abouttwice as much gas from the U.S. as it produces domestically. “Mexico is highly dependent on natural gas, and it is highly dependent on those natural gas imports,” said Diego Rivera Rivota, a senior research associate at Columbia University’s Center on Global Energy Policy. “Virtually all — 99% — of imports come from the United States, and in particular, from Texas.” The U.S. averaged close to 11 billion cubic feet of LNG exports globally and 6 billion cubic feet of pipeline exports to Mexico per day in 2022. The combined capacity of the six Mexican export projects that are currently moving forward, by comparison, is between 5 billion and 6 billion cubic feet per day. If all of the proposed stages are completed, the new export capacity will amount to approximately two-thirds of Mexico’s current total daily gas demand.“If some of these projects — not even all of them, but some of these projects — did come to fruition, then that would put severe stress on the flows and the existing infrastructure pipeline capacity in Mexico,” Rivera Rivota said. The emergence of an export market that uses gas from the U.S., he went on, could create “competition with domestic demand, as well as other potential LNG export projects.” Federal analyses have repeatedly found over the last decade that increased U.S. LNG exports will result in higher prices for American consumers, despite also spurring more gas production. Because most of the LNG shipped out of Mexico will come from the U.S., its effects on the market will be felt across both countries.
Mexico Government Grants Pemex Billions in Tax Relief - Mexico’s government granted state-owned Petroleos Mexicanos billions of dollars in taxes relief, days after the debt-ridden company received a double-credit downgrade at Moody’s Investors Service. President Andres Manuel Lopez Obrador on Tuesday published a decree that removed so-called DUC levies on Pemex for the four months through January. The ruling saves the company about 70 billion Mexican pesos ($4.1 billion), according to an official with knowledge of the matter who asked not to be named because they are not authorized to speak to the media. The tax relief is the latest aid for Pemex provided by Lopez Obrador, known as AMLO, who has made the revival of the company one of the central platforms of his government, which ends this year. Moody’s had cut the oil producer deeper into junk territory Friday, warning it could face a distressed debt exchange without continued government support. Pemex bonds held steady even after faster-than-expected US inflation damped bets on the pace of Federal Reserve interest rate cuts. The extra yield that investors demand to hold Pemex 2060 bonds over comparable sovereign bonds narrowed 17 basis points to 4.74 percent. The fresh aid comes on top of unprecedented budgetary support for Pemex this year. The oil driller’s debt has rallied since late 2023 when AMLO explicitly put 145 billion Mexican pesos ($8.5 billion) in the fiscal budget to help the company meet debt payments, after years of ad hoc capital injections and tax breaks to support the driller. The 2024 budget also further lowered the DUC. The government has not presented a longer-term plan for reducing the company’s debt burden. Moody’s analysts wrote in their rating downgrade on Friday that they expect free cash flow and credit metrics to worsen in the next three years. They added that they see potential for a distressed debt exchange.
Mystery ship capsizes in Trinidad and Tobago, triggering massive oil spill and national emergency - Emergency workers in Trinidad and Tobago are racing to clean up a massive oil spill after a mystery vessel ran aground near the Caribbean islands, casting a pall over Carnival tourism. The spill was "not under control" as of Sunday, said Prime Minister Keith Rowley, who added that the country is grappling with a national emergency. The mystery vessel capsized Wednesday, having made no emergency calls, with no sign of crew, and no clear sign of ownership.Rowley on Sunday declared a national emergency as oil leaking from the vessel affected nearly 10 miles of coastline. "Cleaning and restoration can only begin as soon as we have the situation under control. Right now the situation is not under control," the prime minister told journalists.Divers have so far been unable to plug the leak.Hundreds of volunteers have been toiling since Thursday to halt the spread of the oil, and the government has asked for even more to lend a hand. Images and video released by the government showed crews working late into the night Sunday.The leak has damaged a reef and Atlantic beaches, and residents of the village of Lambeau have been advised to wear masks or temporarily relocate.The government posted satellite imagery on social media, showing affected areas."The satellite imagery reveals a distinctive silver-like slick emanating from the overturned wrecked vessel. Additionally, there are noticeable streaks of a thick, black-like substance accompanying the spill," the post says.
1,000 volunteers scramble in Caribbean to clean up massive oil spill by Trinidad and Tobago just before Carnival | South China Morning Post - A mystery vessel has run aground near Trinidad and Tobago, affecting at least 15km of coastline, at Carnival time. The island nation says it is ready to accept help. The ship, identified as The Gulfstream, was sailing under an unidentified flag, made no emergency calls and had no sign of life on board. Emergency workers in Trinidad and Tobago are scrambling to clean up a massive oil spill after a mystery vessel ran aground near the Caribbean island, casting a pall over Carnival tourism. At least 15km (around 10 miles) of coastline have been affected in Tobago and authorities were poised to declare a national emergency, Farley Augustine, chief secretary of the Tobago House of Assembly, told reporters on Saturday. Environmental officials said the spill has damaged a reef and Atlantic beaches, boding ill for the island’s resorts and hotels, the lifeline of the local economy during Carnival season. Augustine said the government may elevate the accident to a Level 3 disaster, adding, “everything indicates that we are going in that direction”. The mystery vessel, identified as The Gulfstream, capsized on Wednesday off the coast of the Cove Eco-Industrial Park in southern Tobago, and currents have dragged the boat shoreward.When sighted on Wednesday, the ship was sailing under an unidentified flag and made no emergency calls. The island’s Emergency Management Agency said there were no signs of life on the vessel, whose cargo was initially believed to consist of sand and wood. The agency released photos of an estimated 1,000 volunteers in protective white jumpsuits working to remove oil from beaches. Divers were preparing to plug a leak in the ship, Augustine added. For now, according to one government source, “all the coastguard’s efforts are aimed at containing the oil spill”. The source, speaking on grounds of anonymity, said it would be “some time” before investigators could determine the ship’s origins, ownership and intended destination. Augustine said the island was ready to accept help from other countries and had received offers of assistance. Energy Minister Stuart Young from Trinidad travelled to Tobago and said the main island was ready to offer “any assistance that can be provided”. The disaster comes on the eve of Carnival, and Dave Tancoo, an opposition member of Parliament, said tour operators were likely to face considerable losses at a time when they usually see peak profits. “This opportunity was cruelly taken away from them,” he said.
Trinidad and Tobago declares ‘national emergency’ as oil spill from mystery vessel pollutes beaches | CNN — An overturned vessel has caused a huge oil spill along Trinidad and Tobago’s coastline, in what the Caribbean country’s prime minister described as a “national emergency” on Sunday. The spill occurred on February 7 off the southern shores of the Tobago Island, according to the country’s Office of Disaster Preparedness and Management (ODPM). About 15 kilometers (9 miles) of the coastline “is now blackened,” the agency said in a statement Saturday. Photos from the scene show recovery workers wading through thick black sludge, with huge areas of the beach covered in oil. Several government agencies, including at least 1,000 volunteers, have been working to control the spill. Prime Minister Keith Rowley said in a news conference Sunday that “the situation is not under control.” The origins of the vessel have not yet been identified, he added. “This is a national emergency and therefore it will have to be funded as an extraordinary expense,” Rowley said, adding, “we don’t know the full scope and scale of what is going to be required.” Authorities installed booms - floating barriers - to prevent the spill from spreading to other areas, said Farley Augustine, the chief secretary of the Tobago House of Assembly. Officials have also dispatched divers to try to plug the leak but have not been successful. “What has to happen is that we have to find a way to now extract every bit of oil that’s in the vessel, bearing in mind as we have been reiterating – not knowing the schematics of the vessel,” Augustine told reporters.
Two vessels involved in Trinidad oil spill - At least two vessels, a barge and a tugboat, were involved in the accident last week that sparked a massive, ongoingoil spill in Trinidad andTobago, the government of the Caribbean nation said Wednesday. Authorities had been scrambling to figure out what happened after a mystery vessel -- now understood to be the barge -- capsized on February 7, after having made no emergency calls and with no sign of crew, and no clear sign of ownership. Divers had previously spotted the name "Gulfstream" on the oil-leaking barge's side. The Coast Guard has "confirmed that the barge was being towed by a tug, the Solo Creed, from Panama," according to the statement. Investigations by the Trinidad and Tobago Coast Guard revealed that the vessels "appear to have been bound for Guyana," according to a statement from the Ministry of National Security. "However, the Guyanese authorities have confirmed that neither vessel arrived as anticipated. At this state, it is not known whether any lives have been lost in the incident," it continued. It said satellite imagery had shown the Solo Creed tugging an object on February 4. "We have been working very closely with the Guyana Coast Guard in this critical matter and we appreciate their full-scale support," said Trinidad and Tobago's Minister of National Security, Fitzgerald Hinds, in the statement.Hundreds of volunteers have been toiling since Thursday to halt the spread of the oil, and the government has asked for even more to lend a hand.The leak has damaged a reef and Atlantic beaches, and residents of the village of Lambeau have been advised to wear masks or temporarily relocate. The spill comes at the height of carnival, threatening the tourist business that is crucial to the dual-island nation's economy.
Oil spill from Tobago spreads over 160 km towards Grenada’s marine area - Satellite images from the Copernicus Sentinel-1 mission have revealed the scale of an oil spill off Trinidad and Tobago’s coast, following the Gulfstream shipwreck. The spill has extended over 160 km (100 miles) westwards a week after the incident, threatening neighboring marine areas. A maritime disaster occurred off the southern shores of Tobago Island on February 7, 2024, when an unidentified vessel ran aground and overturned, leading to a significant oil spill in the surrounding waters. The resulting spill has coated beaches and wildlife, leading the government to declare a national emergency. The vessel involved in the oil spill off Trinidad and Tobago’s coast, initially identified as the “Gulfstream,” has been a subject of investigation due to the absence of an International Maritime Organization (IMO) registration number. Research, including contributions from volunteers in Bellingcat’s Discord community, indicates that the vessel is likely an unpowered barge, part of an articulated tug and barge system, explaining the lack of a registration number. Trinidad and Tobago’s Ministry of National Security announced on February 14 that two vessels were implicated in the incident: a tugboat named Solo Creed, en route from Panama to Guyana, and an unnamed barge, identified as the source of the “black, oily deposits” observed off the Tobago coast. Satellite imagery provided by the Copernicus Sentinel-1 mission has played a crucial role in understanding the extent of the spill, which has now spread over 160 km (100 miles) westwards from the incident site. The latest images above, captured on February 14 at 22:18 UTC, show the spill moving out of Trinidad and Tobago’s marine jurisdiction and encroaching upon the southern marine area of Grenada. This development raises concerns about the potential environmental impact on Grenada’s waters and the broader implications for neighboring Venezuela. Radar aboard Sentinel-1, renowned for its effectiveness in monitoring oil spills, has been instrumental in tracking the spill’s progression. The technology’s ability to detect changes in surface texture due to oil’s dampening effect on sea waves has allowed for clear visualization of the spill as dark smears against the ocean’s grey background. In response to the disaster, national authorities, including the Office of Disaster Preparedness and Management, have activated the International Charter Space and Major Disasters. This activation aims to coordinate satellite imagery analysis and facilitate timely and effective monitoring efforts to mitigate the spill’s environmental consequences.
Tobago oil spill spreads to Grenada waters and could affect Venezuela An oil spill that has stained Tobago’s coastline in the Caribbean is entering Grenada’s waters and could affect neighboring Venezuela, authorities have warned. Eight days after Trinidad and Tobago’s coastguard first spotted the oil from an overturned and abandoned barge, the vessel continues to leak fuel, and portions of the stain have moved about 144km (89 miles) into the Caribbean Sea at a rate of 14km/h. “It has now entered Grenada’s territorial waters,” said Tobago’s chief secretary, Farley Augustine, following a fly-over by Trinidad and Tobago’s air guard. Augustine said the situation was now under control with a 40ft perimeter supported by booms around the wreckage, but said fuel continued to leak from the sunken vessel. “We are unable to plug the leak and unless we have information on how much fuel is in the barge or what exactly it contains we cannot move forward, except containment and skimming,” he added. Before and after satellite images compiled by the Guardian and superimposed on one another showed the scale of the spill on the Tobago coastline, leaving large areas dyed black.Authorities in Grenada, Panama, Aruba and Guyana have been contacted by Trinidad and the regional group Caricom for information as part of an investigation into the disaster. A preliminary investigation found that the barge, whose owner and origin have not been confirmed, was being tugged to nearby Guyana. Venezuela’s foreign affairs ministry said the country was monitoring the spill and had initiated meetings with Trinidad’s government to coordinate action. Officials have said it was not clear if anybody was onboard the barge when it overturned and apparently began to sink off Tobago’s coast. They are still searching for the tug boat and its owner. The spill has angered many residents of the twin-island nation. Augustine, called on the owner of the barge step forward and pay for the cleanup. “We have a lot of questions, and now is the best time to have those questions answered,” he told reporters on Wednesday. “We need to know the quantity and the material you were transporting, so we know what we have been dealing with, what we have been walking in, what we have been swimming in, what we have been trying to clean up from our shores,” Augustine said.
River Avon: Work under way after heating oil spill pollutes river - Booms have been placed across a section of the River Avon in Wiltshire, following an oil spill. Up to 1,000 litres (220 gallons) of heating oil is thought to have spilled into the water at Fordbrook Business Park, near Pewsey. The spill has now spread up to 1km (0.6 miles), a spokesperson for the Environment Agency (EA) said. The booms in the river were placed to prevent the pollution spreading further. The Environment Agency spokesperson said officers attended the site on Saturday morning following reports from the public of a fuel spill covering 600m on the River Avon. "Our officers have worked with Wiltshire Fire and Rescue Service and have identified the source as being heating oil which supplies offices on an industrial estate," they said. "It is confirmed that the heating oil tank is empty and has lost approximately 1,000 litres. "We now have a team attending who will be placing booms to prevent further spread."
Oil and Gas Firms Offshore Norway Seen Spending More in 2024 - Oil and gas companies operating off the Norwegian coast will spend an estimated 244 billion kroner ($23 billion) this year, 5 percent more than previously forecast.Investments in hydrocarbon extraction and pipeline transport are now forecast to be 13 percent higher in 2024, compared to a final investment figure of 215 billion kroner for 2023, Statistics Norway said on Thursday. Spending in 2025 is forecast to be 205 billion kroner, the agency said. The higher estimate for 2024 spending reflects greater investment in “fields on stream, field development and pipeline transportation,” the statistics office said. “Markedly higher” spending on field development contributed to a 22 percent increase in investment in 2023 compared with 2022.
Centrica Inks 3-Year LNG Supply Deal with Repsol -Centrica Energy has signed an agreement to purchase one million metric tons of liquefied natural gas (LNG) shipments between 2025 and 2027 from Spain’s Repsol SA. The LNG will be delivered to the Grain LNG import terminal in Kent. The agreement is “an additional move by Centrica to build further resilience in the United Kingdom’s (UK) energy security", Centrica said in a news release Wednesday. The financial details were not disclosed. “When our security of supply is threatened, it’s customers that lose out, so it’s reassuring that this agreement will ultimately help ensure that those on the front line of the energy crisis have some insulation from price fluctuations”. "Natural gas is an essential transition fuel in the move to net zero and securing international agreements such as this will be vital if the UK is to reach its ambitious goals. Alongside the other steps we’ve taken to make the UK more resilient – through deals with Delfin Midstream and Equinor – our actions demonstrate our commitment to the UK consumer. We stand ready to invest several billion pounds in additional projects, creating thousands of new UK jobs, with the right regulatory framework”, O’Shea continued. Centrica in July 2023 signed an $8 billion sale and purchase agreement with Delfin Midstream Inc. for one million tons per annum of LNG for 15-years on a free-on-board basis at the Delfin Deepwater Port offshore Louisiana. Operations and first LNG are expected to start at the Delfin Deepwater Port in 2027, according to an earlier statement. The deal follows a heads of agreement between the two companies in August 2022. Centrica also secured a three-year supply agreement with Equinor aiming to heat 4.5 million UK homes through 2024. The UK firm also completed the reopening and expansion of the Rough gas storage facility in October 2022 and June 2023, respectively. The Rough facility currently provides half of the UK’s total gas storage capacity with the potential to store over 50 billion cubic feet of gas, enough to heat almost 10 percent of UK homes throughout winter, according to the release.
Spanish LNG imports, reloads down in January - Spanish liquefied natural gas (LNG) imports and reloads dropped in January compared to the same month last year, according to Enagas.LNG imports decreased by 13.9 percent to about 20 TWh in January and accounted for 65.4 percent of the total gas imports. In December, LNG imports reached some 15 TWh.Including pipeline imports from Algeria, France, and Portugal, gas imports to Spain reached about 32.3 TWh last month, a drop from some 34.2 TWh in January last year, Enagas said in its monthly report.Moreover, national gas demand in January rose by 13.3 percent year-on-year to some 33.6 TWh.Demand for power generation increased by 18.8 percent year-on-year to about 6.88 TWh last month, while conventional demand rose by 11.9 percent to 26.7 TWh, the LNG terminal operator said.The firm previously said that August of last year marked the first time in its history that Spain has managed to fill 100 percent of its underground storage facilities.Storage facilities were also full in October and November, they were 91 percent full in December, and 82 percent in January, according to Enagas.Enagas operates a large network of gas pipelines and has four LNG import plants in Barcelona, Huelva, Cartagena, and Gijon.It also owns 50 percent of the BBG regasification plant in Bilbao and 72.5 percent of the Sagunto plant, while Reganosa operates the Mugardos plant.In August, Spanish power group Endesa delivered the first commercial cargo to the El Musel LNG terminal in Gijon.
Algeria to Export Pipeline Gas to Germany -- Algerian oil and gas company Sonatrach signed a medium-term contract with gas supplier VNG Handel & Vertrieb GmbH (VNG) to supply pipeline natural gas to Germany. The agreement took place during a recent visit by a German delegation to Algiers. “We are happy to strengthen our energy business partnerships with Europe through this landmark agreement with the company VNG,” Rachid Hachichi Sonatrach CEO said. According to the company’s CEO Ulf Heitmuller, this makes VNG the first German company to purchase Algeria’s pipeline gas.
Russia ready to supply gas to Europe via safe Nord Stream 2: Putin - Russian President Vladimir Putin has said Germany does not resume the operation of the surviving pipe of Nord Stream 2, although Moscow is ready to supply gas through it, local media reported. "The matter is not only about Nord Stream 1, which was blown up. Nord Stream 2 was damaged, but one pipe is safe and sound, and gas can be supplied to Europe through it, but Germany does not open it," Putin said in an interview with US media personality Tucker Carlson, published on Friday. "There is another route through Poland, the Yamal-Europe pipeline, it is also possible to carry a large {ow," he said, adding that, however, Poland closed it, TASS reported. The Nord Stream pipelines, which transported natural gas from Russia to European markets via Germany, were severely damaged in September 2022 after blasts in the Baltic Sea, Xinhua news agency reported.
Iraq’s gas output to peak in 2028- Iraq’s gas production is expected to reach its highest level in 2028 after most major projects at key oilfields are completed, according to the Oil Ministry. Large contracts awarded to France’s TotalEnergies and other companies to tap associated gas at the OPEC member’s main oilfields will add large quantities of produced gas and allow Iraq to end the long-standing practice of gas flaring, the Ministry’s spokesman Assim Jihad told the official Iraqi News Agency. Jihad said in his weekend comments that as a result of these projects, Iraq’s gas output will increase gradually and peak in 2028. He said the contract awarded to TotalEnergies in 2023 would add nearly 600 million cubic feet per day (mcf/d) while another project undertaken by Basra Gas Company would produce 200 mcf/d. Other projects to tap Nahr bin Umar and Halfaya fields will add 600 mcf/d while development of fields in the Southern Dhi Qar governorate will boost output by nearly 200 mcf/d, Jihad added.
Nebula Energy Buys Majority Stake in AG&P LNG to Fast-Track Asian Natural Gas Projects - U.S.-based investment company Nebula Energy LLC has invested $300 million for an undisclosed majority stake in LNG terminal developer, AG&P Terminals & Logistics Pte Ltd (AG&P LNG). Nebula Energy is expanding its business in the liquified natural gas and carbon capture and storage sectors with its investment in AG&P LNG; with plans to fast-track LNG terminal and storage infrastructure development across emerging markets in South and Southeast Asia. “With this partnership, AG&P LNG will singularly serve as the one-point integrated source for the rapid unlocking of near-term market demand,” said AG&P LNG CEO Karthik Sathyamoorthy.
BMI Says Outlook for Asia Natural Gas Demand Remains Bullish - The outlook for Asia’s natural gas demand remains bullish. That’s according to a new report from BMI, a Fitch Solutions company, in which BMI analysts highlighted that China, India, and emerging LNG markets in Southeast and South Asian regions have set “ambitious” targets to increase the share of gas in their energy consumption mix. “The governments’ energy transition policies favoring gas as a transition fuel as part of the region’s broader decarbonization strategies will remain a key driver behind gas demand growth,” BMI analysts said in the report. “Fuel switching from coal to gas in [the] power sector, together with growing preference for gas for petrochemical production and policies promoting city gas market development in emerging Asian countries, will further drive strong growth in natural gas consumption,” they added. In the report the analysts said they project Asia’s natural gas consumption to grow at an annual average rate of 1.9 percent between 2023 and 2033, “with total gas consumption increasing from 921 billion cubic meters (bcm) in 2022 to 1,132 bcm in 2033”. “We anticipate Asian LNG imports to increase further to 448 bcm in 2033 from 324 bcm in 2023, with a large share of incremental imports stemming from India and China,” the analysts added. The BMI analysts warned in the report that Asia will continue to face shortfalls in natural gas supplies to keep pace with demand growth, which they said will result in growing dependence on LNG imports from outside of the region. “Asia’s LNG demand growth trajectory will continue to be influenced by the pace at which the governments accelerate substitution of coal and refined fuels with natural gas in the power and industrial sectors,” the analysts highlighted in the report. China will continue to be a key driver behind the Asia’s long-term gas demand growth, the analysts pointed out in the report, outlining that the country will contribute close to 48 percent of incremental gas consumption. “China’s natural gas consumption is projected to increase … at an average growth rate of 2.5 percent annually between 2023 and 2033 with total demand rising from 369 bcm in 2023 to 470 bcm in 2033,” the analysts said in the report. “Besides strong demand growth from power, residential, and commercial sectors, natural gas demand from [the] petrochemical industry is expected to grow further as the state-owned companies are increasingly looking into chemical production from ethane,” they added, stating that Sinopec and PetroChina are investing in ethylene plants that use ethane as feedstocks. The analysts noted in the report that downside risks to China’s natural gas consumption will depend, to a large extent, on the pace at which renewable energy sources are developed to substitute natural gas in the power sector. “An aggressive renewables growth target is the most obvious and largest threat to gas, although perhaps outside the scope of our forecast period,” the analysts added. “China has put in place targets for non-fossil fuels, led by lower-cost renewables such as solar and wind, to account for 25 percent of the energy mix by 2030 and 80 percent by 2060,” they went on to state.
Spot LNG shipping rates rise for first time since November - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet rose for the first time since mid-November 2023, while European prices decreased this week compared to the week before. Last week, the Atlantic rate dropped 1 percent week-on-week to $52,750 per day and the Pacific rate decreased 3 percent to $53,250 per day. Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday that the Spark30S Atlantic increased by $1,750 (3 percent) to $54,500 per day, whilst the Spark25S Pacific increased by $4,250 (8 percent) to $57,500 per day. “The opening of the US arb to NE-Asia, coupled with the increased voyage time from the diversion of cargoes unable to transit Suez, are both likely contributory factors to this increase,” he said. Spot LNG shipping rates rise for first time since November Image: Spark LNG ships, including Qatari vessels delivering LNG shipments to Europe, are now favoring the Cape of Good Hope for safer passage. Kpler said in a report last week that the Suez Canal has witnessed no LNG transits since January 17. Vessels face an extra 21-day voyage time on a round-trip basis via the Cape of Good Hope as opposed to the Suez Canal, according to Kpler. The firm said on Thursday that Qatar’s LNG export rose in January despite Red Sea disruptions. “With increased shipments to Asia and a strategic shift in shipping routes, Qatar showcases resilience amidst challenges and shipped 5 percent more LNG to Asia in January than it did the month prior,” it said.In Europe, the SparkNWE DES LNG front month dropped compared to the last week. The NWE DES LNG for March delivery was assessed last week at $8.561/MMBtu and at a $0.64/MMBtu discount to the TTF. “The SparkNWE DES LNG price for March delivery is assessed at $8.172/MMBtu and at a $0.60/MMBtu discount to the TTF,” Afghan said. He said this is a $0.389/MMBtu decrease in DES LNG price, and a $0.04/MMBtu narrowing of the discount to the TTF. Levels of gas in storages in Europe remain high for this time of the year due to mild weather. Data by Gas Infrastructure Europe (GIE) shows that gas storages in the EU were 67.87 percent full on February 7. This week, JKM, the price for LNG cargoes delivered to Northeast Asia, dropped slightly when compared to the last week, according to Platts data. JKM for March settled at $9.450/MMBtu on Thursday.
QatarEnergy plans to book more giant LNG carriers in China - State-owned LNG giant QatarEnergy is looking to order more Q-Max LNG carriers in China as part of its massive shipbuilding program, according to shipbuilding sources. LNG Prime was the first to report in January this year that QatarEnergy signed a shipbuilding deal with China’s Hudong-Zhonghua for the construction of eight Q-Max type LNG carriers. The giant vessels will have a capacity of 271,000 cubic meters and are scheduled to be delivered in 2028 and 2029. Currently, the world’s largest LNG carriers are Qatar’s Q-Max vessels that are about 345 meters long and have a capacity of 263,000-266,000 cbm. Qatar’s Nakilat owns 14 Q-Max LNG carriers built by Hanwha Ocean (DSME) and Samsung Heavy between 2008 and 2010, and they all transport LNG from the giant Ras Laffan LNG complex in Qatar to customers around the globe. Prior to the order in China, LNG Prime reported in September last year that QatarEnergy was looking to order about 15 Q-Max LNG carriers in China and South Korea. However, it seems that QatarEnergy has ended talks in South Korea and is now working to sign a deal for more Q-Max vessels in China. Sources said that QatarEnergy is interested to book up to ten such vessels at Hudong-Zhonghua, but the deal has not been signed yet. According to the sources, the contract is expected to be finalized later this year.
Shell expects 50% rise in global LNG demand by 2040 (Reuters) - Global demand for liquefied natural gas (LNG) is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use LNG to support their economic growth, Shell said on Wednesday.The market remains "structurally tight", with prices and price volatility remaining above historic averages, constraining growth, the world's largest LNG trader said in its 2024 annual LNG market outlook. Demand for natural gas has peaked in some regions, including Europe, Japan and Australia in the 2010s, but continues to rise globally, and is expected to reach around 625-685 million metric tons per year in 2040, Shell said. That is slightly lower than Shell's 2023 estimates of a global demand increase to 700 million tons by 2040."While things are relatively balanced and seemed relatively comfortable today, the market is still quite fragile," Steve Hill, executive vice president for Shell Energy, told analysts on a call following the outlook report."We have a structurally tight market that's been balanced by near-term market weakness for where we see fragility and volatility continuing," Hill said.Shell said that global demand for LNG is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use LNG to support their economic growth.China, which in 2023 overtook Japan as the world's top LNG importer, is likely to dominate LNG demand growth this decade as its industry seeks to cutcarbon emissions by switching from coal to gas, the report said."China is the market that we are most bullish about this decade. And one of the reasons for that is the massive amount of new gas infrastructure that is coming on stream at the moment," Hill told analysts.China's 2024 LNG imports are expected to rebound to nearly 80 million tons, from about 70 million tons in 2023, according to ICIS and Rystad forecasts, surpassing 2021's record 78.79 million tons.From 2030 to 2040, declining domestic gas production in parts of South Asia and Southeast Asia could drive a surge in demand for LNG as these economies need fuel for gas-fired power plants or industry.Shell's report predicted a balance between rising demand and new supply for those regions, but said significant investments would be needed in gas import infrastructure."In the medium term, latent demand for LNG – especially in Asia – is set to consume new supply that is expected to come on to the market in the second half of the 2020s," the report said.
Industry to drive tripling of natural gas consumption in India by 2050 - U.S. Energy Information Administration (EIA) In our International Energy Outlook 2023 (IEO2023), we project natural gas consumption to more than triple in India by 2050. We project annual growth of 4.4% over that period, more than twice the 2.0% annual growth rate of natural gas consumption in China, the next-fastest-growing country. We project that India’s industrial sector—in particular, ammonia production intended to decrease fertilizer imports—as well as a growing oil refining sector will drive most of the growth in natural gas consumption over the projection period. This growth in demand will require more significant increases in India's domestic natural gas supply and imports than in recent years. According to the International Energy Agency , India’s domestic natural gas production increased 2.4% annually on average between 2019 and 2022 as imports declined 1.5% annually. In 2022, 7.0 billion cubic feet per day (Bcf/d) of natural gas was consumed across the residential, commercial, industrial, transportation, and electric power sectors. In 2022, the industrial sector accounted for more than 70% of total consumption, followed by the electric power sector at 17%. By 2050, we project natural gas consumption to rise in India to 23.2 Bcf/d. Among India’s five consuming sectors, we project the industrial sector’s share of natural gas consumption will grow the most, rising to 80% of total consumption, followed by the transportation sector rising to 10%.In 2022, about half of the natural gas consumption in India’s industrial sector was used to produce basic chemicals, mostly ammonia for fertilizer. The Indian government’s stated policy to develop self-sufficiency in the production of urea, a nitrogenous fertilizer produced from ammonia, drives much of our projected increase in natural gas demand. Natural gas is a key input for urea production.We also expect natural gas consumption in oil refining to grow significantly to keep up with India’s domestic demand for refined oil products. Between 2022 and 2050, we project that natural gas consumption will grow by more than 250% for the production of basic chemicals and by more than 400% for refining. We expect the two industries together to account for approximately 79% of India’s industrial natural gas demand in 2050.We project that both India’s domestic natural gas production and natural gas imports will help meet the growth in consumption of natural gas in India. We project domestic natural gas production to nearly triple in India from 3.3 Bcf/d in 2022 to 9.1 Bcf/d in 2050, a 3.7% average annual increase. We expect India’s net natural gas imports to grow even faster than domestic production, increasing from 3.6 Bcf/d in 2022 to 13.7 Bcf/d in 2050, a 4.9% average annual increase.
Iraq follows Russia as second largest oil supplier to India - Iraqi News - – Data issued by the Indian Ministry of Commerce and Industry revealed that Iraq was the second-largest oil supplier to India, after Russia, in December 2023. According to the figures, the cost of Russian crude oil exported to India decreased to $77.82 per barrel, compared to $79.34 per barrel for oil shipments imported from Iraq. Iraq and Russia are considered the largest suppliers to India, which is the third largest oil-consuming country in the world. Oil refineries in India have been rushing to buy low-priced Russian oil since early 2022, when the invasion of Ukraine caused some buyers to avoid buying Russian oil. Oil shipments exported from Russia have become relatively more expensive since the middle of 2023, trading at levels very similar to shipments exported from Iraq. Oil imported from Saudi Arabia, the third-largest supplier to India, is considered the most expensive among these countries. The average price of crude oil exported from Saudi Arabia reached $87.19 per barrel in December 2023.
India formally asked to join world energy agency - IEA head -- The Indian government signed a formal request to join the International Energy Agency (IEA) and the accession process has now started, the head of organisation, Fatih Birol, said on Tuesday.
Philippines recommends criminal charges for ship-tanker owner in 2023 oil spill — The Philippine government on Wednesday recommended criminal charges be filed against owners of a tanker that caused a massive oil spill last year after sinking in rough waters off the central Philippines. The leak from the MT Princess Empress was one of the worst environmental disasters to strike the country in recent years, with the clean-up lasting months and imperiling nearly 20,000 local fishermen, officials said. The ship, operated by Philippines-based RDC Reield Marine Services, sank on Feb. 28, 2023, while carrying about 800,000 liters (211,000 gallons) of fuel oil. All 20 crew members were rescued and the tanker was located weeks later at a depth of 400 meters (1,312 feet) off Naujan, a coastal town in Oriental Mindoro province. The spill led to the contamination of vast coastal regions and forced officials to impose a fishing ban in seven coastal towns. It affected nearly 200,000 people and threatened marine life in the southern Luzon and western Visayas regions. In a statement released Wednesday, the Department of Justice said the prosecutors’ panel had recommended indicting corporate officers of the MT Princess Empress, personnel of the Maritime Industry Authority (MARINA), and one private individual “over multiple counts of falsification of private documents, use of falsified documents and multiple counts of falsification of public documents. “Following a comprehensive evaluation of affidavits and evidence, the panel of DOJ prosecutors uncovered irregularities in certain documents related to the construction and certificate of public convenience of MT Princess Empress,” the statement said. Justice Secretary Jesus Crispin Remulla told reporters that negligence could not be used as an excuse to destroy the environment and livelihood of people. “It is important to be diligent on land and on our waters,” he said. Meanwhile, Sonia Malaluan, chief of MARINA, offered to assist investigators. “I am not aware of such a recommendation nor have I received any communication on this. But, if it is true and should the DOJ find prima facie evidence that warrants filing of the case, as Administrator of MARINA, I can assure our full cooperation,” Malaluan said.
Saudi energy minister pins Aramco's oil capacity halt on green transition -- Saudi’s state-controlled oil giant Aramco suspended its capacity expansion plans because of the green transition, Energy Minister Abdulaziz bin Salman said Monday, stressing that the future of energy security lies with renewables. “I think we postponed this [Aramco capacity] investment simply because … we’re transitioning. And transitioning means that even our oil company, which used to be an oil company, became a hydrocarbon company. Now it’s becoming an energy company,” the Saudi prince said during a question and answer panel at the International Petroleum Technology Conference in Dhahran, noting that Aramco has investments in oil, gas, petrochemicals and renewables. On Jan. 30, the Saudi energy ministry surprised the markets with a directive instructing the Saudi majority-owned Aramco, which went public in 2019, to stop plans to increase its maximum crude production capacity from 12 million barrels per day to 13 million barrels per day by 2027. The ministry did not disclose the reason behind its decision at the time, sparking questions over potential Saudi concerns over the future of oil demand amid a progressing energy transition. The Saudi energy minister on Monday qualified the decision was not made hastily and was the product of a continuous review of market conditions. “We are in [a] continuous mode of reviewing and reviewing and reviewing, simply because you have to view the realities [of the market],” he said. Saudi Arabia’s directive for Aramco was ‘prudent,’ oil and gas consultancy says Oil prices have spasmed through waves of volatility in the wake of the Covid-19 pandemic, weighed by lower-than-expected recoveries in Chinese demand and inflationary pressures. The global movement to decarbonize and stave off a climate crisis has redirected energy companies away from long-term fossil fuel projects in favor of greener investment pastures — and may redefine the outlook for energy security, Abdulaziz bin Salman signaled on Monday. “Energy security in the 70s, and 80s and 90s was more dependent on oil. Now, you get what happened last year … It was gas. The future problem on energy security, it will not be oil. It will be renewables. And the materials, and the mines,” he stressed, noting that there is still a “huge cushion” of spare capacity available in the event of an emergency shortage. Previously, such supply shocks have struck by way of sanctions or attacks against oil infrastructure worldwide. “Why should we be the last country to hold energy capacity, or emergency capacity, when it is not appreciated? And when it is not recognized?” the Saudi energy minister said. “Energy security is not just the responsibility of Saudi Arabia. It’s the responsibility of all energy producers and energy ministries,” Notably, spare capacity has also long served as a diplomatic instrument in the Saudi-led Organization of the Petroleum Exporting Countries, shaping the odds of victory in the fleeting one-month price war between Riyadh and Moscow in 2020. Saudi Arabia and its OPEC allies have long championed a combined energy transition strategy that utilizes fossil fuel resources until such a time that renewable supplies are available to fully cover global requirements, downplaying concerns over markets imminently hitting peak old demand. The stance stands in staunch contrast to that of the International Energy Agency, which in a landmark report of 2021 advocated against further investment in new fossil fuel supply projects, if humanity is to combat the climate crisis. Yet Middle East countries have increasingly attempted to reconcile their image as stalwart fossil fuel producers with their energy transition ambitions, with key OPEC producer the United Arab Emirates hosting last year’s U.N. climate-geared Conference of the Parties (COP). The world’s largest crude exporter, Saudi Arabia aims to decarbonize by 2060, with Saudi Aramco targeting to reach operational net-zero emissions by 2050. Steered by Crown Prince Mohammed bin Salman’s Vision 2030 plan, the kingdom has also been grappling with diversifying its economy away from overreliance on fossil fuels.
OPEC sticks to oil demand view, sees better economic growth - OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025 on February 13, and raised its economic growth forecasts for both years saying there was further upside potential. The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month. A further boost to economic growth could give additional tailwind to oil demand. OPEC's 2024 demand growth forecast is already higher than that of the International Energy Agency, although the wider OPEC+ alliance is still cutting output to support the market. OPEC said a "positive trend" for economic growth was expected to extend into the first half of 2024 and raised its economic growth forecasts for 2024 and 2025 by 0.1 percentage points. "Global economic growth remains robust," OPEC said in the report. "Further upside potential could materialise in all major OECD and non-OECD economies." Oil prices have found support in 2024 from conflict in West Asia and supply outages, although concerns about continued high interest rates have weighed. Brent crude on Feb. 13 was trading around $82 a barrel, up 0.5% OPEC, IEA clash over demand outlook For this year, OPEC's expectation of oil demand growth is much more than the expansion of 1.24 million bpd so far forecast by the IEA. The IEA, which represents industrialised countries, is scheduled to update its forecasts on Feb. 15. OPEC and the IEA have clashed in recent years over issues such as long-term demand and the need for investment in new supply. The IEA sees oil demand peaking by 2030 as the world shifts to cleaner energy, a view OPEC dismisses. Earlier on Feb. 13, OPEC's Secretary General Haitham Al Ghais told Reuters he believed OPEC's long-term demand outlook, which looks to 2045 and sees no peak in demand, is robust. OPEC and the wider OPEC+ alliance have implemented a series of output cuts since late 2022 to support the market. A new cut for the first quarter took effect last month. The OPEC report also said that OPEC oil production fell by 350,000 bpd in January as a new round of voluntary output cuts by the OPEC+ alliance for the first quarter took effect.
OPEC+ Oil-Cut Laggards Pledge Compliance With Targets - Iraq and Kazakhstan pledged compliance with new OPEC+ oil targets after failing to fully cut production as promised last month. The OPEC+ alliance, which is led by Saudi Arabia, agreed to slash production during the first quarter to avert a global oil surplus and shore up prices. While several countries appear to have complied, Baghdad and Astana were once again delinquent. Kazakhstan’s energy ministry conceded it had pumped above its limits in January and vowed to “compensate for the overproduced volumes over the next four months.” It didn’t specify the excess produced. Its counterpart in Iraq released a slightly more nuanced statement, promising to review external estimates of its production and compensate for any excess, also over a four-month period. The nation has in the past disputed OPEC’s assessments of its output. Iraq issued its statement following a visit to Baghdad from Saudi Energy Minister Abdulaziz bin Salman. Data compiled by the Organization of Petroleum Exporting Countries indicate that Iraq pumped 4.19 million barrels a day in January, or 190,000 above its limit. But Iraqi Oil Minister Hayyan Abdul Ghani said on Monday that the country is producing no more than its quota of 4 million a day. The excess production comes at an awkward moment for OPEC+ alliance as it seeks to balance global markets against slowing demand growth and booming supply from the Americas. Crude prices are holding near $80 a barrel, a little too low for some member governments. “There’s a little bit of fatigue kicking in” among OPEC+ members, “particularly given a rise in production from alternative producers outside the group,” said Ayham Kamel, head of Middle East and North Africa at the Eurasia Group consultancy. Straying from their limits isn’t an unfamiliar position for either Kazakhstan or Iraq. Baghdad has often chafed against output quotas since the creation of OPEC+ more than seven years ago, as it seeks maximum revenues to rebuild a shattered economy. Astana meanwhile has been keen to make use of production capacity additions at oilfields like Kashagan.
Iraq committed to OPEC, will not produce more than 4 mln bpd -minister (Reuters) - Iraq is committed to OPEC decisions and after its second voluntary cut announced in December it is also committed to producing no more than 4 million barrels per day (bpd), oil minister Hayan Abdel-Ghani told reporters on Monday. Iraq's current crude oil exports range between 3.35 million and 3.4 million bpd, he added. The oil minister said talks with international oil companies operating in Iraqi Kurdistan are making progress towards resolving a dispute which has halted Iraq's northern oil exports. "Resumption of exports from the Kurdistan region is linked to the resumption of production from the fields in the region. Talks with the companies operating in the region are on their way to reach a resolution in the near future," said Abdel-Ghani. Iraq's deputy oil minister for upstream affairs said in November that a resumption of northern crude exports depended on re-negotiating current production-sharing contracts to change them to a profit-sharing model. Turkey halted Iraq's 450,000 barrels per day (bpd) of northern exports on March 25 last year after an arbitration ruling by the International Chamber of Commerce (ICC) which ordered Ankara to pay Baghdad damages for unauthorised exports between 2014 and 2018.
Oil Retreats as USD Steadies on Low Trading Volumes -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange nudged lower at the start of a new trading week amid a modestly higher U.S. Dollar Index and subdued trading volumes with most of the Asian markets closed for the Lunar New Year as traders continue to monitor the latest developments in the Israel-Gaza conflict. The Israeli military conducted a series of military strikes in Rafah City overnight as part of a larger operation into southern Gaza after Prime Minister Benjamin Netanyahu dismissed last week a breakthrough in the cease-fire negotiations. More than 1 million Palestinians are currently taking refuge in southern Gaza, which is raising the risk that a military push could disproportionately affect the civilian population there. Hamas, meanwhile, has indicated that a Rafah offensive would mean the end of hostage negotiations. The military escalation once again injected fresh geopolitical risks for crude flows from the Middle East region that accounts for about a third of the world's oil output. The Iran-backed Houthi militia in Yemen overnight launched another attack on a commercial vessel passing through the narrow corridor of Bab al-Mandab in the Red Sea. The Houthis identified the vessel as the Star Iris, with maritime shipping trackers saying the vessel is Marshall Islands-flagged and Greek-owned. The Houthis said the attack is a response to Israel's military actions in Gaza and that they are carried out in sympathy with the Palestinian population. The ongoing attacks on the Bab al-Mandab Strait prompted several companies to halt Red Sea voyages and opt for a longer and more expensive route around Africa. Meanwhile, Saudi Aramco's CEO Amin Nasser indicated this morning that the company has ample spare capacity of about 3 million barrels per day (bpd) and always stands ready to raise production if required by the markets. Saudi Arabia's cushion of spare capacity in case of major disruptions to global supplies has so far limited the upside for oil prices. Under the production curtailment deal between the Organization of the Petroleum Exporting Countries and Russia-led allies, Saudi oil production is currently averaging about 9 million bpd, down from its 12 million bpd maximum sustainable capacity. The Saudi government on Jan. 30 ordered state oil company Aramco to halt plans of further expansion and maintain a production capacity of 12 million bpd, 1 million bpd below the target announced in 2020. Monday's move lower in the oil markets comes as trading volumes are subdued across major Asian markets due to the Lunar New Year holidays. Investors' focus this week will be on monthly oil market reports from OPEC and the International Energy Agency for further clues on the global supply and demand disposition. Near 7:45 a.m. EST, the U.S. Dollar Index firmed 0.05% against a basket of foreign currencies to near 104.050, pressuring front-month West Texas Intermediate March futures to $75.95, down $0.85 barrel (bbl) in overnight trading. International crude benchmark Brent for April delivery dropped back $0.96 to $81.23 bbl. March RBOB futures slipped $0.0033 to near $2.3368 gallon and March ULSD futures declined to $2.9154 gallon.
The Crude Market Ended Slightly Higher After Traders Took Some Profits Following Last Week's Rally -- The crude market ended slightly higher after traders took some profits following last week’s rally. The oil market erased some of its previous gains amid the news that the Israeli military said on Monday it had conducted a “series of strikes” on southern Gaza that have now "concluded," days after Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire proposal from Hamas. The market sold off to a low of $75.54 early in the session. However, logistics disruptions in the Red Sea continued on Monday with Yemen-based Houthis saying they had targeted a cargo ship in the Red Sea, which they claimed was American. The crude market bounced off its low and traded to a high of $77.09 by mid-morning. However, the market erased some of those gains and settled in a range from $76.50 to $77.00 during the remainder of the session. The March WTI contract ended the session, up 8 cents at $76.92, while the April Brent contract settled down 19 cents at $82.00. The product markets ended the session mixed, with the heating oil market settling up 5 points at $2.9196 and the RB market settling up 2.78 cents at $2.3673. Saudi Aramco’s CEO, Amin Nasser, said he is not in agreement there will be peak demand. He said Saudi Arabia expects demand for oil of 104 million bpd in 2024 and 105 million bpd in 2025. Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said the country has plenty of spare oil production capacity, after the world's biggest oil exporter announced unexpected plans late last month to scale back its long-term capacity expansion plans and target a maximum sustained production capacity of 12 million bpd. He said that the kingdom had a "huge cushion" of spare oil capacity in case of major disruptions to global supplies caused by conflict or natural disasters. The U.S. EIA said in its monthly Drilling Productivity Report that U.S. oil output from top shale-producing regions will increase in March to its highest in four months. It said production from the top basins will increase by nearly 20,000 bpd to 9.7 million bpd, its highest since December. Oil output in the Permian basin is expected to increase by about 14,000 bpd to 6.1 million bpd, the second highest monthly output on record after November. Production in the Eagle Ford basin is expected to increase to 1.1 million bpd, the highest since September. In the Bakken, output was set to increase to 1.2 million bpd, the highest since December. Iraq’s Oil Minister, Hayan Abdel-Ghani, said the country is committed to OPEC decisions and after its second voluntary cut announced in December it is also committed to producing no more than 4 million bpd. Iraq's current crude oil exports range between 3.35 million and 3.4 million bpd. The oil minister said talks with international oil companies operating in Iraqi Kurdistan are making progress towards resolving a dispute which has halted Iraq's northern oil exports. The UAE Energy Minister, Suhail Mohamed Al Mazrouei, said the United Arab Emirates is committed to work with partners at OPEC+ to study the oil market and take suitable decisions to guarantee its stability.
Oil price news: oil rises as OPEC demand outlook aids push past technical level - Oil rose after a bullish demand outlook from OPEC helped crude surpass a key technical level that had served as the ceiling of this year’s narrow trading band. West Texas Intermediate rose 1.2 per cent to settle near US$78 a barrel, pushing past its 200-day moving average of about $77.40. With bulls also finding support from OPEC’s projections that global oil demand will continue strong growth this year, the breach above the technical threshold raises the possibility of additional upward momentum. Oil’s gain came against a backdrop of broader risk-off sentiment after U.S. data showed inflation remains elevated, reducing the prospect of imminent interest rate cuts. “A rare day to see crude decouple from equities” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Positioning, which has become increasingly important for the direction in crude, was pared down last week,” and “builds in inventories are expected this week and may temper upside.” Embedded Image Earlier today, the Organization of the Petroleum Exporting Countries’ monthly report showed that the group’s new production cuts were only partially delivered in the first month. The broader OPEC+ alliance plans to decide early next month whether to extend their curbs into the second quarter. While oil has advanced this year, it’s yet to break decisively higher. The OPEC cuts, as well as nervousness over the conflict in the Middle East and attacks on shipping in the Red Sea, have largely been offset by an uncertain demand outlook and ample output from outside the group. Prices: WTI for March delivery rose 1.2 per cent to settle at $77.87 a barrel in New York. Brent for April settlement advanced 0.9 per cent to settle at $82.77 a barrel. Meanwhile, a chunk of the vast fleet of tankers that Russia uses to deliver its crude is grinding to a halt under the weight of U.S. sanctions, according to ship-by-ship tracking. That’s another sign that tougher measures by Western regulators might be starting to have tangible effects on Moscow. Traders are also parsing the International Energy Agency’s outlook for crude supply and demand. The agency estimates that global consumption will increase by 1.2 million to 1.3 million barrels a day in 2024, which will be easily matched by swelling production from the Americas.
Oil prices rise despite stubborn U.S. inflation -- Oil futures rose Tuesday despite stubborn inflation in the U.S. that dragged the stock market lower. The West Texas Intermediate contract for March gained 95 cents, or 1.24%, to settle at $77.87 a barrel. The Brent contract for April settled at $82.77 a barrel, up 77 cents or 0.94%. Oil clung to gains despite inflation rising more than expected in January. The consumer price index increased 3.1% on an annual basis compared with the 2.9% that was expected. The market is no longer banking on the Federal Reserve cutting interest rates in May, according to the CME FedWatch Tool. Lower interest rates typically drive economic growth which fuels oil demand. U.S. crude and the global benchmark settled largely flat on Monday after rallying more than 6% last week as the Israel-Hamas war raged on, highlighting an ongoing risk to crude supplies if the conflict spreads further. WTI has struggled to break out of a range of about $68 to $78 a barrel amid uncertainty over war in the Middle East and an unclear supply and demand outlook for the year. WTI and Brent are up about 8.68% and 7.44%, respectively, for the year, however. "Oil prices have been numbed into submission by what has transpired, or not, in the Middle East," "All flow charts of consequence can immediately be undone by an untoward act, missile or sudden peace agreement and crude prices will move $10/barrel," OPEC expects a tight crude market this year with demand forecast to grow by 2.2 million barrels per day, while production outside the cartel is expected to rise by 1.2 million barrels per day. That would imply a supply deficit this year unless OPEC reverses its production cuts. But the head of the International Energy Agency told Bloomberg News that oil markets should remain "comfortable" this year barring more geopolitical turmoil or extreme weather. Consumption will rise by 1.2 to 1.3 million barrels per day but production in the U.S., Brazil, Canada and Guyana will match the demand, IEA chief Fatih Birol told Bloomberg. Oil Prices, Energy News and Analysis Follow today's coverage of oil prices and the latest news on crude oil These oil companies could be the next takeover targets after Diamondback deal Saudi energy minister pins Aramco’s oil capacity halt on green transition Fluence CEO says energy storage leader has record backlog that will push it to profitability JPMorgan says oil could rise to the high $80s by May Enphase CEO says solar industry poised to rebound on falling interest rates, rising utility costs Nextracker CEO says ‘solar is unstoppable’ as market sees ‘unprecedented demand growth’ BP shares rise 5% after British oil giant announces plans to boost shareholder returns Oil market will face supply shortage by end of 2025, Occidental CEO says Exxon beats earnings expectations even as lower oil prices weigh on profits Chevron earnings fall but shareholders see record windfall in 2023 In an attempt to contain the Mideast conflict, President Joe Biden dispatched CIA Director William Burns to Cairo for talks on a temporary cease-fire in Gaza in exchange for Hamas releasing hostages and Israel freeing Palestinian prisoners. Burns' arrival in the Middle East comes as the push for a truce faltered last week after Israeli Prime Minster Benjamin Netanyahu rejected Hamas' proposed terms for a pause in the fighting. Netanyahu has vowed to press on with Israel's offensive in Gaza and push into the southern city of Rafah on Egypt's border, raising tensions with Cairo. The Israel-Hamas war has pulled the U.S. and Iran closer to a direct confrontation, one which geopolitical and oil market analysts worry will limit supplies in the event of any disruption in the Strait of Hormuz.
WTI Drops After Huge Crude Build, US Production Back At Record Highs -Oil prices extended gains overnight after API reported big product draws (which offset a large crude build) and on geopolitical concerns rising once more after Israel launched an extensive wave of attacks in Lebanon, Israel Defense Forces spokesperson Daniel Hagari said on social media Wednesday. Additionally, OPEC’s top official said Tuesday that global oil demand is set to expand strongly, while a monthly outlook from the group revealed limited compliance with the members’ latest round of supply cuts. “Oil has weathered the financial storm decisively, but copious upside potential might be too much of an ask,” Will the official data confirm API's major draws and builds? API
- Crude +8.5mm (+2.8mm exp)
- Cushing +512k
- Gasoline -7.2mm (-1.0mm exp) - biggest draw since Sept 2021
- Distillates -4.0mm (-2.2mm exp) - biggest draw since May 2023
DOE
- Crude +12mm (+2.8mm exp)
- Cushing +720k
- Gasoline -3.7mm (-1.0mm exp)
- Distillates -1.9mm (-2.2mm exp)
The official data more than confirm the huge crude inventory build (over 12mm barrels) but the product draws were smaller than API reported. Cushing saw a rise in stocks for the first tin 6 weeks...The Biden administration added 746k barrels to the SPR last week...US crude production was flat at record highs 13.3mm b/d... WTI was hovering around $78.25 ahead of the print (off the highs of the day) and extended the decline after...
Increasing U.S. Inventories Weighed on Market Sentiment -The oil market posted an inside trading day on Wednesday as it held on to Tuesday's gains on a strong demand growth forecast from OPEC and later sold off as increasing U.S. crude inventories weighed on market sentiment. The oil market traded mostly sideways and rallied higher early in the session to a high of $78.76, as it remained well supported by the OPEC forecast of global oil demand increasing by 2.25 million bpd in 2024 and by 1.85 million bpd in 2025. However, the market sold off sharply following the release of the EIA’s petroleum stocks report, which showed a larger than expected build in crude stocks of over 12 million barrels on the week. The market breached its previous low of $76.87 as it extended its losses to over a $1.20 and posted a low of $76.61 ahead of the close. The March WTI contract ended the session down $1.23 at $76.64 and continued to trade lower, posting a new low of $76.38 in the post settlement period. Meanwhile, the April Brent contract settled down $1.17 at $81.60. The product markets also ended the day lower, with the heating oil market settling down 8.58 cents at $2.8101 and the RB market settling down 7.77 cents at $2.3169. The EIA reported that U.S. crude oil stocks increased in the week ending February 9th while gasoline and distillate inventories fell as refining dropped to the lowest levels since December 2022. Crude inventories increased by 12.0 million barrels to 439.5 million barrels in the week to February 9th. Refinery crude runs last week fell by 298,000 barrels per day to 14.54 million bpd and refinery utilization rates fell by 1.8 percentage points to 80.6% of total capacity. Refinery rates in the Midwest fell by 12 percentage points in the past week to 83.1%, also the lowest since December 2022.Iraq’s Prime Minister Mohammed Shia al-Sudani told Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman in a meeting on Wednesday that it was important for the two countries to align their views to maintain stability in the oil market. A statement from the office of Iraqi premier also said he welcomed the entry of Saudi companies into Iraq and that he discussed expanding economic cooperation with Saudi Arabia.S&P Global Commodities at Sea continues to report that no diesel or gasoil cargoes have been loaded in India for shipment to Europe since January 26th, as key supplier Reliance has been shipping cargoes eastward instead to avoid the problems in the Red Sea.Iraq’s Oil Ministry said Iraq will review its oil production and address any excess output above its OPEC+ voluntary cuts in the coming four months, if found. Kazakhstan’s Energy Ministry said the country will compensate for its oil overproduction in January within the next four months in line with its OPEC+ commitments.IIR Energy reported that U.S. oil refiners are expected to shut in about 1.9 million bpd of capacity in the week ending February 16th, increasing available refining capacity by 9,000 bpd. Offline capacity is expected to fall to 1.4 million bpd in the week ending February 23rd.
Oil falls by more than $1/bbl on US crude build, security threat worries (Reuters) - Oil futures sank by $1 a barrel on Wednesday as surging U.S. crude inventories pushed down prices and a possible security threat to the U.S. that might dampen oil demand in the world's largest economy. Brent crude futures settled at $81.60 a barrel, shedding, $1.17, or 1.4%. U.S. West Texas Intermediate (WTI) crude futures settled at $76.64 a barrel, losing $1.23, or a 1.6%. U.S. crude inventories jumped by 12 million barrels to 439.5 million barrels last week, the Energy Information Administration said, far exceeding analysts' expectations in a Reuters poll for a 2.6 million-barrel rise as refining dropped to its lowest levels since December 2022. "The refinery utilization rate is a pseudo disaster, down four to five weeks in a row at the end of winter" as refiners have kept activity slow even after emerging from a deep freeze that hampered operations last month. Refinery crude runs last week fell by 298,000 barrels per day to 14.5 million bpd and refinery utilization rates decreased by 1.8 percentage points to 80.6% of total capacity, both the lowest levels since Winter Storm Elliott similarly knocked scores of refineries offline in December 2022.Meanwhile, the U.S. Congress intelligence chair warned of a 'serious national security threat', without providing further details, scaring some oil investors."At the risk of sounding flip, war and/or terror events outside the oil producing regions are bearish for oil prices due to the expected hit to demand," Prices drew some support from a monthly report on Tuesday from the Organization of the Petroleum Exporting Countries (OPEC) that said global oil demand will rise by 2.25 million bpd in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month. In other OPEC news, Iraqi Prime Minister Mohammed Shia al-Sudani held a meeting with Saudi Energy Minister Prince Abdulaziz bin Salman, in which he highlighted the importance of coordination between the two countries to maintain stability in oil markets. Kazakhstan said it will compensate in coming months for its oil overproduction in January, meeting its commitment to OPEC+ production cuts. Geopolitical factors also influenced oil markets, including conflicts in the Middle East and Russia-Ukraine and the growing view that U.S. interest rate cuts will start later than previously expected. "Currently events around Israel and Gaza, together with Ukraine’s war against Russia, weighs more on sentiment than disappointing U.S. inflation data,"
Oil price news: Oil holds drop as IEA casts demand warning, U.S. stocks surge - Oil fell for a second day as the International Energy Agency warned of slowing demand growth after data showed a rise in U.S. crude inventories. Brent declined toward US$81 a barrel after dropping 1.4 per cent on Wednesday. The market could be in surplus all year, the IEA said, citing demand growth that’s losing stream and expanding non-OPEC supplies. That outlook came a day after nationwide crude stockpiles in the U.S. expanded by a greater-than-expected 12 million barrels last week, spurring an increase in total oil inventories. “Markets were shocked by the quantum of the increase” in crude inventories, said Han Zhong Liang, investment strategist at Standard Chartered Plc. “We expect the oil market to remain largely balanced in 2024” with prices likely to hold around current levels for now, he said. Crude has failed to break out of a $10-a-barrel range this year, with tensions in the Middle East and efforts by OPEC+ to curb production countered by robust supplies from drillers outside the cartel and concerns global demand growth will slow over 2024. Expectations that U.S. interest rates could remain higher for longer as inflation persists have also been a headwind. Still, market metrics continue to signal tight conditions, with timespreads for both major benchmarks holding in a bullish, backwardated structure despite having come off slightly. Refiners’ profits from making fuels like diesel and gasoline also remain elevated. Prices: Brent for April settlement fell 0.6 per cent to $81.10 a barrel at 10:19 a.m. in London. WTI for March delivery declined 0.7 per cent to $76.11 a barrel.
Oil Futures Advance as US Dollar Weakens on Slowing Retail Sales - Oil futures on the New York Mercantile Exchange (NYMEX) closest to expiration and the Brent contract on the Intercontinental Exchange settled higher Thursday, reversing early losses following the release of January U.S. retail sales data that showed consumers spent less than expected last month, pressuring the U.S. dollar. U.S. Department of Commerce's Census Bureau reported a 0.8% monthly decline in U.S. retail sales with monthly sales of $700.3 billion, more than an expected 0.1% dip, while revising December's monthly sales increase lower to 0.4%. Monthly sales declines were reported in furniture, home furnishing and building materials, which align with limited home sales, and electronics following the Christmas holiday. Retail sales at gas stations fell a sharp 7.5% in January, which aligns with a decline in gasoline demand from December. Data from the Energy Information Administration shows gasoline supplied to the U.S. market averaged 8.1545 million barrels per day (bpd) in January, down 529,000 bpd, or 6.1%, from December. The U.S. dollar weakened on the retail sales report, with the dollar index falling 0.4% to a 104.2 settlement against a basket of foreign currencies. On Wednesday, the U.S. dollar index traded at a 104.875 three-month high. Selling in the dollar was spurred, in part, by renewed sentiment for rate hikes by the Federal Reserve to begin in June which had weakened following Tuesday's hotter-than-expected inflation report from the Bureau of Labor Statistics showing the consumer price index increased a more-than-expected 0.3% in January. There remains a low probability that the Federal Open Market Committee will reduce the federal funds rate at its March meeting, and a 42% probability for a rate cut in May, according to CME Group's FedWatch Tool. The FedWatch Tool finds an 80% probability of a rate cut in June. NYMEX March West Texas Intermediate futures settled $1.39 higher at $78.03 barrels (bbl), widening its premium against April delivery to $0.44 ahead of contract expiration on Feb. 20. ICE April Brent futures ended Thursday's session $1.26 higher at $82.86 bbl. NYMEX March RBOB futures firmed $0.0014 to $2.3183 gallon, retreating from Tuesday's $2.4134 19-week high on the spot continuous chart. March ULSD futures settled $0.0136 higher at $2.8237 gallon, the first gain this week. The market reaction to the retail sales report countered a bearish outlook by the International Energy Agency released early Thursday, with the Paris-based agency forecasting world oil consumption to grow annually by 1.2 million bpd this year, down from a 2.3 million bpd annual growth rate in 2023. "Global oil demand growth is losing momentum, with annual gains easing from 2.8 mb/d in 3Q23 to 1.8mb/d in 4Q23," said IEA in its monthly Oil Market Report. "A sharp drop in China underpinned an 830 kb/d decline in global oil demand to 102.1 mb/d in the last quarter of 2023."
Oil settles up, records weekly gain on Middle East tensions (Reuters) - Oil prices settled higher on Friday as geopolitical tensions in the Middle East more than offset a forecast from the International Energy Agency for slowing demand. Brent crude futures settled up 61 cents, or 0.74% at $83.47 a barrel. U.S. West Texas Intermediate crude settled $1.16, or 1.49%, higher at $79.19 with the nearby March contract expiring on Tuesday. The April contract rose 87 cents to $78.46. For the week, Brent gained more than 1% and the U.S. benchmark rose about 3%. The growing risk of a wider conflict in the Middle East supported crude prices. On Thursday, Hezbollah said it fired dozens of rockets at a northern Israeli town in a "preliminary response" to the killing of 10 civilians in southern Lebanon, the deadliest day for Lebanese civilians in four months of cross-border hostilities. The oil market's reaction to news from the Middle East was moderate. "The market sees oil still flowing and disruptions have been small," Gaza's largest functioning hospital was under siege in Israel's war with Islamist group Hamas, as warplanes struck Rafah, the last refuge for Palestinians in the enclave, officials said.Threats persisted in the Red Sea after a missile fired from Yemen struck an India-bound tanker carrying crude oil. U.S. producer prices increased more than expected in January amid strong gains in the costs of services, which could amplify inflation worries. Still, a slump in retail sales prompted hopes the Fed will soon start cutting rates, which could support oil demand. "Hopes for U.S. rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long (holiday) weekend in the U.S.," On Thursday, the IEA said global oil demand growth was losing momentum and trimmed its 2024 growth forecast. The agency expects global oil demand growth to decelerate to 1.22 million barrels per day (bpd) in 2024, about half of the growth seen last year, in part due to a sharp slowdown in Chinese consumption. It had previously forecast 2024 demand growth of 1.24 million bpd. The Organization of the Petroleum Exporting Countries (OPEC) expects oil use to keep rising for the next two decades. U.S. energy firms this week cut the number of oil and natural gas rigs in operation for the second time in three weeks, energy services firm Baker Hughes said in its closely followed report on Friday.
Oil Settles at Highest Price This Year | Rigzone -- Oil closed at its highest settling price this year as increasing tensions in the Middle East outweighed hotter-than-expected US inflation data that’s damping the prospect of interest rate cuts. West Texas Intermediate rose above $79 a barrel after Hezbollah chief Hassan Nasrallah said the group will escalate its fight with Israel, heightening risks in a region that accounts for about a third of the world’s oil output. Meanwhile, wider markets struck a more cautious tone as inflation figures spurred bets that the Federal Reserve will be in no rush to cut interest rates. Apart from the conflict, the fundamental outlook for crude remains mixed. The International Energy Agency said this week that oil markets could be in surplus all year as global demand growth loses steam, while OPEC sees more robust consumption and the cartel and its allies are implementing supply cuts to buttress prices. Crude is up more than 10% this year, near the top of the range it has traded in since early November. “Oil prices have been quite choppy this week, partly because of the dollar strength holding it back, after last week’s sizeable rally,” Fawad Razaqzada, a market analyst at City Index and Forex.com, said in a note to clients. “All told, I think risks are skewed to the upside for oil, as there not many negative influences to impact prices.” In the Middle East, exchanges of fire between Hezbollah in Lebanon and Israel intensified in a further escalation that’s raising alarm of a wider war. Security in the Red Sea continues deteriorate as swaths of the merchant fleet have been avoiding the waterway since attacks by the Houthis began in mid-November. Meanwhile, Russia almost reached its target for voluntary supply reductions for the first time since making the pledge last year, according to Bloomberg calculations based on official data for January. Elsewhere, Iraq and Kazakhstan have pledged compliance with their targets after failing to fully cut production as promised last month. WTI for March rose $1.16 to settle at $79.19 a barrel in New York. Brent for April settlement rose 61 cents to settle at $83.47 a barrel.
US seizes weapons shipment headed from Iran to Houthi-controlled areas in Yemen U.S. forces seized an advanced weapons shipment from Iran headed to Houthi-controlled areas in Yemen, according to a U.S. Central Command (CENTCOM) statement Thursday. U.S. forces found more 200 packages of lethal weapons on a vessel intended to support the Houthis that have been firing missiles in the Red Sea and disrupting international shipments in the region. The U.S. Coast Guard seized unmanned underwater-surface vehicle components, explosives, network equipment, anti-tank missile launcher assemblies, medium-range ballistic missile components and other lethal equipment, according to the Thursday statement. “This is yet another example of Iran’s malign activity in the region,” CENTCOM Commander Gen. Michael Erik Kurilla said in a statement. “Their continued supply of advanced conventional weapons to the Houthis is in direct violation of international law and continues to undermine the safety of international shipping and the free flow of commerce.”The Houthis have been firing missiles and performing drone strikes on commercial ships since last November in an effort to protest Israel’s military operations in Gaza and show solidarity with Palestinians. Due to the onslaught on the shipping vessels, some companies have redirected ships to around the southern tip of Africa, a longer path that costs more. CENTCOM also announced Thursday that U.S. forces downed seven mobile anti-ship missiles, three unmanned aerial vehicles and one drone in the Houthi-controlled areas of Yemen. The weaponry was destroyed in four strikes that, CENTCOM says, were in defense of the U.S. Navy and commercial ships in the area.
Blasts hit a natural gas pipeline in Iran and an official says it was an act of sabotage - WHIO-TV (AP) — Explosions struck a natural gas pipeline in Iran early on Wednesday, with an official blaming the blasts on a "sabotage and terrorist action" in the country as tensions remain high in the Middle East amid Israel's war on Hamas in the Gaza Strip. Details were scarce, though the blasts hit a natural gas pipeline running from Iran's western Chaharmahal and Bakhtiari Province up north to cities on the Caspian Sea. The roughly 1,270-kilometer (790-mile) pipeline begins in Asaluyeh, a hub for Iran's offshore South Pars gas field. Saeed Aghli, the manager of Iran's gas network control center, told Iranian state television that a “sabotage and terrorist” action caused explosions along several areas of the line. There are no known insurgent groups operating in that province, home to the Bakhtiari, a branch of Iran's Lur ethnic group. Aghli did not name any suspects in the blasts.Iran's Oil Minister Javad Owji, also speaking to state TV, compared the attack to a series of mysterious and unclaimed assaults on gas pipelines in 2011 — including around the anniversary of Iran's 1979 Islamic Revolution. Tehran marked the 45th anniversary of the revolution on Sunday.“The goal that the enemies were pursuing was to cut the gas in the major provinces of the country and it did not happen,” Owji said. “Except for the number of villages that were near the gas transmission lines, no province suffered a cut.” In the past, Arab separatists in southwestern Iran have claimed attacks against oil pipelines. However, attacks elsewhere in Iran against such infrastructure are rare.Since the revolution, Iran has faced low-level separatist unrest from Kurds in the country's northwest, the Baluch in the east and Arabs in the southwest. However, tensions have risen in recent years as Iran faces an economy hobbled by international sanctions over its nuclear program. The country has faced years of mass demonstrations, most recently in 2022 over the death of Mahsa Amini, a young woman who died in custody after her arrest allegedly over how she wore her mandatory headscarf.Meanwhile, Israel has carried out attacks in Iran that have predominantly targeted its nuclear program. On Tuesday, the head of the United Nations' nuclear watchdog warned that Iran is "not entirely transparent" regarding its atomic program, particularly after an official who once led Tehran's program announced the Islamic Republic has all the pieces for a weapon "in our hands."Tensions over Iran's nuclear program comes as groups that Tehran is arming in the region — Lebanon's militant Hezbollah and Yemen's Houthi rebels — have launched attacks targeting Israel over the war in Gaza. The Houthis continue to attack commercial shipping in the region, sparking repeated airstrikes from the United States and the United Kingdom.
Blasts hit a natural gas pipeline in Iran and an official says it was an act of sabotage - (AP) — Explosions struck a natural gas pipeline in Iran early on Wednesday, with an official blaming the blasts on a “sabotage and terrorist action” in the country as tensions remain high in the Middle East amid Israel's war on Hamas in the Gaza Strip. Details were scarce, though the blasts hit a natural gas pipeline running from Iran's western Chaharmahal and Bakhtiari Province up north to cities on the Caspian Sea. The roughly 1,270-kilometer (790-mile) pipeline begins in Asaluyeh, a hub for Iran's offshore South Pars gas field. Saeed Aghli, the manager of Iran's gas network control center, told Iranian state television that a “sabotage and terrorist” action caused explosions along several areas of the line. There are no known insurgent groups operating in that province, home to the Bakhtiari, a branch of Iran's Lur ethnic group. Aghli did not name any suspects in the blasts. Iran's Oil Minister Javad Owji, also speaking to state TV, compared the attack to a series of mysterious and unclaimed assaults on gas pipelines in 2011 — including around the anniversary of Iran's 1979 Islamic Revolution. Tehran marked the 45th anniversary of the revolution on Sunday. “The goal that the enemies were pursuing was to cut the gas in the major provinces of the country and it did not happen,” Owji said. “Except for the number of villages that were near the gas transmission lines, no province suffered a cut.” In the past, Arab separatists in southwestern Iran have claimed attacks against oil pipelines. However, attacks elsewhere in Iran against such infrastructure are rare. Since the revolution, Iran has faced low-level separatist unrest from Kurds in the country's northwest, the Baluch in the east and Arabs in the southwest. However, tensions have risen in recent years as Iran faces an economy hobbled by international sanctions over its nuclear program. The country has faced years of mass demonstrations, most recently in 2022 over the death of Mahsa Amini, a young woman who died in custody after her arrest allegedly over how she wore her mandatory headscarf. Meanwhile, Israel has carried out attacks in Iran that have predominantly targeted its nuclear program. On Tuesday, the head of the United Nations’ nuclear watchdog warned that Iran is “not entirely transparent” regarding its atomic program, particularly after an official who once led Tehran’s program announced the Islamic Republic has all the pieces for a weapon “in our hands.” Tensions over Iran's nuclear program comes as groups that Tehran is arming in the region — Lebanon’s militant Hezbollah and Yemen’s Houthi rebels — have launched attacks targeting Israel over the war in Gaza. The Houthis continue to attack commercial shipping in the region, sparking repeated airstrikes from the United States and the United Kingdom.
Iran condemns ‘terrorist’ attack on gas pipelines An Iranian government official has blamed “terrorism and sabotage” for twin explosions on gas pipelines overnight. While there are few details about the blasts, one occurred on the mainline gas route running from Iran’s central Chaharmahal and Bakhtiari province north to major gas fields in the Caspian Sea, state media reported on Wednesday. The other explosion was reported in the southern province of Fars. The blasts come amid raised tension as Israel’s war in Gaza threatens to spill over across the region. While Tehran has not specified who it suspects, it has linked other such incidents to Israel over the years. “This terrorist act of sabotage occurred at 1am (21:30 GMT) on Wednesday morning in the network of national gas transmission pipelines in two regions of the country,” oil minister Javad Owji told state TV. Starting in Asaluyeh, a hub for Iran’s offshore South Pars gas field, the first pipeline runs 1,270 kilometres (790 miles) to the Chaharmahal and Bakhtiari province. Authorities denied reports that the incident caused gas cuts to industries and offices. “We hope the pipeline will be repaired and will become operational as soon as possible,” Saeed Aghili, the manager of Iran’s gas network control centre, told Iranian state television. In the past, Arab separatists in southwestern Iran have claimed attacks against oil pipelines. But attacks on such infrastructure are rare elsewhere. However, in recent years, tensions have risen as Iran faces an economy hobbled by international sanctions over its nuclear programme. Tehran has also faced rare mass civil unrest, most recently in 2022, over the death of Mahsa Amini following her non-compliance with hijab rules. But Iran has generally blamed agents of Israel for similar acts of alleged sabotage in the past. Israel has carried out attacks in Iran, but has predominantly targeted its nuclear programme. The war on Gaza has worsened relations between the two countries. Iranian-linked groups, like Yemen’s Houthis and Lebanon’s Hezbollah, have launched attacks on Israel and shipping in the Red Sea in what they say is intended as defence of Palestinians. On Tuesday, the head of the United Nations’ nuclear watchdog warned that Iran is “not entirely transparent” regarding its atomic programme.
New York Times: Israel Behind Attacks on Major Gas Pipelines in Iran - Israel carried out covert attacks on two major natural gas pipelines inside Iran this week, disrupting the flow of heat and cooking gas to provinces with millions of people, according to two Western officials and an Iranian military strategist. They said the gas pipeline attacks by Israel required deep knowledge of Iran’s infrastructure and careful coordination, especially since two pipelines were hit in multiple locations at the same time, according to the New York Times. The Western officials said Israel also caused a separate blast on Thursday inside a chemical factory on the outskirts of Tehran that rattled a neighborhood and sent plumes of smoke and fire into the air. But local officials said the factory explosion, which took place on Thursday, stemmed from an accident in the factory’s fuel tank. The strikes represent a notable shift in the shadow war that Israel and Iran have been waging by air, land, sea, and cyberattack for years. Israel has long targeted military and nuclear sites inside Iran — and assassinated Iranian nuclear scientists and commanders, both inside and outside of the country. Israel has also waged cyberattacks to disable servers belonging to the oil ministry, causing turmoil at gas stations nationwide. But blowing up part of the country’s energy infrastructure marked an escalation in the covert war and appeared to open a new frontier, officials and analysts said. According to a report from the Iranian News Agency, an explosion described as "sabotage" rattled the Burojen-Shahrekot gas pipeline in the Chaharmahal and Bakhtiari provinces of southwest Iran early last Wednesday. There were no reported casualties from the incident. Subsequently, the CEO of the Gas Company in Chaharmahal and Bakhtiari Governorate announced the resumption of gas transmission along the affected line near the city of Burojen. “The enemy’s plan was to completely disrupt the flow of gas in winter to several main cities and provinces in our country,” Iran’s oil minister, Javad Owji, told Iranian media on Friday. Mr. Owji, who had previously referred to the blasts as “sabotage and terrorist attacks,” stopped short of publicly blaming Israel or any other culprit. But he said that the goal of the attack was to damage Iran’s energy infrastructure and stir domestic discontent.
Netanyahu Rejects Hostage Deal Deal Drawn Up By Mossad, Shin Bet, and IDF - Israeli Prime Minister Benjamin Netanyahu rejected an outline for a potential hostage deal with Hamas that was drawn up by Israel’s Mossad spy agency, the Shin Bet security agency, and the Israeli Defense Forces (IDF).According to The Times of Israel, the proposal was put together by Mossad chief David Barnea, Shin Bet chief Ronen Bar, and Maj. Gen. Nitzan Alon, an IDF officer in charge of intelligence efforts to find Israeli hostages in Gaza.Details of the outline are unclear, but it was likely a response to Hamas’s recent counteroffer for a 135-day truce to facilitate the release of Israeli hostages and Palestinian prisoners and a permanent ceasefire.The proposal was discussed with Netanyahu several times, including during a prepatory meeting for hostage deal talks in Egypt that were held on Tuesday and attended by Barnea, CIA chief William Burns, Qatari Prime Minister Mohammed bin Abdulrahman al-Thani, and Egyptian officials.The Times report said Netanyahu declined to present the new outline for a hostage deal at the talks and told Barnea to “only listen” and not put forward any new ideas. Netanyahu publicly rejected Hamas’s latest offer and said “total victory” was the only option for Israel, and he is now preparing an invasion of Rafah.According to President Biden, the deal that’s on the table involves a six-week truce, but it’s unclear if Hamas is receptive to the idea. A Hamas official speaking to AFP signaled the Palestinian group was still looking for a permanent ceasefire, saying Hamas was awaiting the outcome of the Cairo talks and was “open to discussing any initiative that achieves an end to aggression and war.”
Netanyahu Doubles Down on Plans to Attack Rafah Despite Growing Criticism - Israeli Prime Minister Benjamin Netanyahu on Sunday doubled down on his vow to attack the southern Gaza Strip city of Rafah despite growing criticism of the plan.It’s estimated that about 1.5 million Palestinians are packed into Rafah, which has a pre-war population of 275,000. Most of the people sheltering in the city are living on the streets in tents, and many have been displaced multiple times since Israel unleashed its onslaught.On Friday, Netanyahu ordered the Israeli military to draw up an evacuation plan for Rafah, but it’s unclear where the Palestinians sheltering there will go. A few hours after Netanyahu said he ordered the plan, Israeli airstrikes hit residential buildings in Rafah, killing 28.Heavy Israeli airstrikes were also reported in Rafah late Sunday into Monday morning, with Al Jazeera reporting at least 50 have been killed so far.Aid groups are warning a full-scale Israeli assault on Rafah would be a “blood bath” due to the concentration of Palestinians. Egypt, which borders Rafah, is threatening to scrap its 1979 peace treaty with Israel if it attacks the city. Cairo strongly opposes anything that could lead to an influx of Palestinian refugees entering its territory.Responding to the criticism, Netanyahu claimed to ABC News that he had no choice. “Those who say that under no circumstances should we enter Rafah are basically saying lose the war, keep Hamas there,” he said. The Israeli leader suggested that Palestinians in Rafah could go to areas to the north that have been “cleared” by the Israeli military, though throughout the past few months, Israel has regularly attacked so-called “safe zones.” Also, on Sunday, President Biden spoke with Netanyahu and said the US would support an attack on Rafah if Israel had a plan to evacuate civilians. The Biden administration has paid lip service to the idea of protecting civilians in Gaza but continues to provide unconditional military aid despite the massive civilian death toll.The latest number from Gaza’s Health Ministry put the deal toll in the Strip since October 7 at 28,176, including over 12,000 children.
Israeli Minister Blocks US Flour Shipments Into Gaza - Israeli Finance Minister Bezalel Smotrich is blocking a US-funded flour shipment into Gaza that Prime Minister Benjamin Netanyahu previously vowed would be allowed into the Strip, Axios reported on Tuesday. Officials said that Netanyahu personally made the commitment to President Biden several weeks ago and that the Israeli war and security cabinets approved the delivery to be made through Israel’s Kerem Shalom crossing into Gaza, where Israelis have been protesting against humanitarian aid shipments into Gaza. Smotrich’s office says he blocked the shipment because it’s going to the UN Relief and Works Agency (UNRWA). Israel recently accused 12 UNRWA employees of participating in the October 7 Hamas attack on southern Israel, but the intelligence dossier the allegations were based on provides no evidence for the claim, according to media outlets that obtained the document. Regardless of the lack of evidence, the US and several other countries suspended funding for UNRWA as hundreds of thousands of Palestinians are facing famine-like conditions. Philippe Lazzarini, UNRWA’s commissioner general, also admitted he fired the UNRWA employees accused of attacking Israel without evidence. He said an investigation is ongoing and that the employees would be compensated if the allegations were found to be false. Smotrich is still claiming UNRWA is a “central part” of the “Hamas war machine.” His office said he was blocking the shipment in coordination with Netanyahu and claimed it would be able to go through if they found a new delivery mechanism. Any delays in aid shipments could mean death for the Palestinians in Gaza. Palestinians are beginning to starve to death, but the scale of famine-related deaths is unclear at this point as it’s not being properly tracked,according to the American aid group Anera. The aid group said that one of its staffers had heard from a friend in north Gaza who lost their six-year-old son to starvation.“in the tragic circumstances of starvation in Gaza, there’s a compounding issue: many who perish from starvation-related symptoms aren’t accurately documented. Their deaths often get attributed to other physical causes, masking the true toll of starvation,” Anera said in a press release.
Israel's Ben Gvir Says Israeli Military Should Shoot Palestinian Women and Children - Israeli Minister of National Security Itamar Ben Gvir said on Sunday that Israeli forces should shoot Palestinian women and children in Gaza if they get too close to the Israeli border.“We cannot have women and children getting close to the border… anyone who gets near must get a bullet [in his head],” Ben-Gvir said during an argument with Israeli Defense Forces Chief of Staff Lt. Gen. Herzi Halevi about the IDF’s open fire policies, according to The Jerusalem Post.After his comments leaked to the press, Ben Gvir doubled down. In a post on X, the Israeli minister said he “does not stutter and does not intend to apologize. All those who endanger our citizens by getting near the border must be shot. This is what they do in any normal state.”In his role as minister of National Security, Ben Gvir oversees the Israeli police, including the border police. He and Halevi also argued about the IDF cooperating with Israeli police to crack down on protests against humanitarian aid entering Gaza at the Kerem Shalom border crossing.“You cannot contact the Israel Police commissioner directly,” Ben-Gvir told Halevi during what the Post described as a screaming match. “If you want him, you need to go through me.”The Israeli police under Ben Gvir had done nothing to stop the protests, which aim to block the aid into Gaza, until the military stepped in. Ben Gvir, who leads the Jewish Power party, and other ministers in Netanyahu’s government, including Finance Minister Bezalel Smotrich oppose allowing aid into the Gaza Strip.
Israel Weaponizes Sympathy And Victimhood by Caitlin Johnstone - There’s a certain particularly toxic personality type which thrives on being hated. They behave in wildly odious and destructive ways, and then when people react to this with hostility they plunge into poor-me victimhood, which they then use to justify more odious and destructive behavior. You may have been unfortunate enough to have encountered such personalities in your own life. They behave atrociously, and then when people react to it they say “See?? I really AM being persecuted!”A Jewish anti-Zionist Israeli named Alon Mizrahi posted an interesting piece on Twitter a few days ago that’s been rattling around in my head ever since, wherein he argues that Israel is actually intentionally generating hatred towards itself in order to shore up political power.Claiming that “Israel and American Jewish organizations took it upon themselves to keep Jews afraid and isolated” in a “strategy of intentional paranoia,” Mizrahi opines that when October 7 hit, “the right wing, nationalistic, paranoid section of the Jewish political spectrum, realized it could be translated into political gold.”“It doesn’t seem like Israel is trying to be hated globally. It is actually what it’s doing,” Mizrahi writes. “It is intentionally airing its cruelty and barbarity so that it will remain closed up to the world, thus guaranteeing the continued rule of the paranoia camp.”“Palestinians are just crash test dummies in this scenario,” he adds. “Their deaths are used to get people angry and Israel hated, so it becomes even more paranoid.” Whether you accept or reject Mizrahi’s perspective, you can’t deny that Israel’s apologists have been seizing on the outrage its actions in Gaza have caused as evidence of anti-semitic persecution. The Anti-Defamation League has started categorizing pro-Palestine rallies as anti-semitic incidents, including rallies organized and attended by Jewish groups, leading to the Israel-friendly mass media reporting a massive spike in “anti-semitism” in the wake of October 7. Common pro-Palestine chants like “From the river to the sea Palestine will be free” have been deceitfully labeled calls for the genocide of Jews, and any criticism of Israel’s actions is met with a deluge of accusations of anti-semitism.Once Israel and its western supporters succeeded in framing any opposition to to the Israeli government as evidence of anti-semitism, it was guaranteed that any time Israel does something evil it will cause a new wave of “anti-semitism” per those standards. This perceived hatred and persecution could then be cited as evidence for why Israel needs to be even more violent, militaristic and tyrannical than it already was, and why its brutal treatment of Palestinians is justified and correct. This in turn could be used by western governments to justify pouring more weapons into Israel and providing military support against its neighbors.In this dynamic, anything Israel does causes more people to hate Israel both in the middle east and around the world, to which Israel responds by tearfully proclaiming “See?? They hate us! We must defend ourselves against their hostilities!”This is not the sort of behavior you would accept from someone in your life, and it shouldn’t be the sort of behavior we accept from nuclear-armed ethnostates. As with any other widespread dysfunction, the key to dismantling this one is to spread awareness of what it is that Israel is doing.
Dutch Court Orders Government to Halt Delivery of F-35 Parts to Israel - A Dutch court ruled on Monday that the Netherlands must halt the export of spare parts for F-35 fighter jets to Israel since they’re likely to be used to kill civilians in Gaza.The Netherlands hosts a warehouse of US-owned F-35 parts and exports them to countries that operate the fighter jets. “The court finds that there is a clear risk that Israel’s F-35 fighter jets might be used in the commission of serious violations of international humanitarian law,” the court said in its ruling.The Dutch government said it would appeal the ruling, which ordered a halt to the exports within seven days. The ruling came as a result of a lawsuit filed against the Netherlands by Oxfam and other human rights organizations.Losing spare parts from the Netherlands is not expected to have an impact on Israel’s military operations since there are other places to source the equipment. But the ruling piles on the growing international pressure against Israel’s slaughter of Palestinians and could lead to similar lawsuits in other countries. Israel’s biggest backer, the United States, has shown no sign that it’s considering limiting military aid despite the international outrage over the slaughter. The White House reaffirmed on Monday that it would continue supporting Israel even if it went ahead with its plans to launch a full-scale attack on the southern Gaza Strip city of Rafah, which is packed with an estimated 1.5 million Palestinians.
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