Sunday, October 17, 2021

US oil price at a 7 year high; largest US oil inventory build in 7 months; global oil shortage at 2,400,000 barrels per day​

oil prices at a 7 year high; largest US oil inventory build in 7 months; gasoline imports at an 8 month low; global oil shortage at 2,400,000 barrels per day​ as OPEC output is ​375,000 barrels per day short of​ quota​

Oil prices rose for an 8th straight week as global shortages of coal and natural gas were expected to lead to increased demand for oil....after rising 4.6% to $79.35 a barrel last week after OPEC decided to only add the minimum to global supplies in the coming months, the contract price for US light sweet crude for November delivery rallied in early trading Monday, initially jumping by more than 3% to trade at a seven-year high of $82.18 a barrel, driven by concerns over deepening fuel shortages across major global economies, as accelerated gas-to-oil switching in power generation boosted the outlook for oil demand, before giving up more than half of the early gains to settle $1.17 higher at $80.52 a barrel, still the first close above $80 since October 2014, as a growing power crisis from Europe to Asia boosted demand for oil ahead of winter...oil prices moved higher again early Tuesday, propelled by concerns over a quickly tightening global oil market, as OPEC and Russia-led partners stuck with their agreement to only gradually roll back their production cuts next month, even as global stockpiles of coal and natural gas were running low before winter. but pulled back after the International Monetary Fund trimmed their global economic growth forecast, and settled with just a 12 cent gain for the day at $80.64 a barrel, as a tight market brought about by robust demand and limited supply continued to lend buoyancy to oil prices...oil prices pulled back further in early trading Wednesday, after data from the EU showed their industrial production fell sharply at the end of the third quarter, pressured by supply-chain bottlenecks and a record run in electricity prices, and settled 20 cents lower at $80.64 a barrel, as traders assessed OPEC’s skepticism around the strength of crude demand even after oil prices had hit their highest since 2014....oil prices then moved higher again early Thursday after a mixed inventory report from the American Petroleum Institute, but pared their gains following EIA data that showed US oil inventories had increased more than expected and that refiners had sharply scaled back run rates amid softer demand for both gasoline and distillate fuels, but rallied again in afternoon trading to close 87 cents higher at $81.31 a barrel after Saudi Arabia dismissed calls for additional OPEC+ supply and the International Energy Agency warned that shortages of natural gas in Europe and Asia were boosting demand for oil, deepening what was already a sizable supply deficit in crude markets...the oil rally continued into Friday on global shortages of natural gas and coal supplies that were expected to add 500,000 barrels per day (bpd) to global oil demand over the coming months, and never looked back to finish 97 cents higher at a 7 year high of $82.28 a barrel, boosted by forecasts of an oil supply deficit over the next few months, as the easing of coronavirus-related travel restrictions spurred additional demand. thus logging a 3.7% gain on the week, with the global benchmark price for Brent crude scoring longest streak of weekly gains since 1999....

Since oil prices appear to be pretty close to a 7 year high, we'll again put up a long term graph and take a look..

October 16 2021 oil prices

The above is a screenshot of the current interactive oil price chart from barchart.com, which i have again set to show front month oil prices monthly over the past 10 years, which means you're seeing the same oil prices that were quoted by the media....this interactive chart can also be reset to show prices of front month or individual monthly oil contracts over time periods ranging from 1 day to 30 years, as the menu bar on the top indicates, and also to show oil prices by the minute, hour, day, week or month for each...each bar in the graph above represents the range of oil prices for a single month, with months when prices rose indicated in green, with the opening price at the bottom of the bar and the closing price at the top, and months when prices fell indicated in red, with the opening price at the top of the bar and the closing price at the bottom, while the small sticks above or below each monthly bar represent the extent of the price change above or below the opening and closing price during the month in question....meanwhile, the bars across the bottom show trading volume for the front month oil contract, for the months in question, again with up months indicated by green bars and down months indicated in red...

it's pretty clear and has been widely cited that this weeks oil prices were the highest since October 2014....to find out when in October, we converted that interactive oil graph to show daily prices, and then tediously scrolled the daily price graph back to 2014...looking for a daily closing price higher than this week's $82.28 a barrel, we arrived at October 21st, 2014, when the November 2014 oil contract opened at $81.86 a barrel and closed at $82.49....the next day, oil closed at $80.52 and was below $80 by the end of the month, where it remained until last week...so this week's closing price is actually 6 days short of a seven year high, and though it has traded higher off-market since (it's now at $83.09), it's closing prices in New York trading on which price records are based..

meanwhile, natural gas prices fell for a second week, following their seven week surge to a twelve year high, as mild weather lowered demand and allowed for surplus gas to be stored before winter...after falling 1% to $5.565 per mmBTU last week on the largest increase in US natural gas inventories in 16 months, the contract price of natural gas for November delivery opened higher on Monday on cooler-trending weather models, but reversed course once the trading session got underway to settle 22.0 cents or 4% lower at a two-week low of $5.345 per mmBTU, on rising gas output and on forecasts that milder than normal weather would continue through late October, allowing utilities inject more gas into storage than usual ahead of the winter...after trading lower early Tuesday, the November contract turned higher after the midday forecast called for cooler weather, and the Cove Point LNG export plant returned from a maintenance outage, boosting the amount of gas that our LNG export plants consumed, and settled with a gain of 16.0 cents at 5.505 per mmBTU....another cooler turn in the latest weather models lifted natural gas prices again on Wednesday, as prices settled 8.5 cents higher at $5.590, and then rose 9.7 cents to $5.687 per mmBTU during Thursday's session, on a smaller-than-expected storage build, lower gas output, rising LNG exports, higher global gas prices, and a report that La Nina conditions had developed, portending a cold and wet winter for the US....but US natural gas prices turned lower and fell almost 5% on Friday, following a 9% drop in global gas prices, on forecasts the weather in the US would remain mostly mild through the end of October, setting down 27.7 cents at $5.410 per mmBTU and thus ending 2.8% lower for the week...

The EIA's natural gas storage report for the week ending October 8th indicated that the amount of working natural gas held in underground storage in the US rose by 81 billion cubic feet to 3,369 billion cubic feet by the end of the week, which still left our gas supplies 501 billion cubic feet, or 12.9% below the 3,870 billion cubic feet that were in storage on October 8th of last year, and 174 billion cubic feet, or 4.9% below the five-year average of 3,543 billion cubic feet of natural gas that have been in storage as of the 8th of October in recent years...the 81 billion cubic foot increase in US natural gas in working storage this week was lower than the forecast for a 89 billion cubic foot addition from a survey of analysts queried by S&P Global Platts, but close to the average addition of 79 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, but still well above the the 75 billion cubic feet that were added to natural gas storage during the corresponding week of 2020…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 8th indicated that even after a decrease in our oil imports and an increase in our oil exports, a concurrent ​​​drop in our oil refining​ and a jump in our unaccounted for oil​ meant we had surplus oil to add oil to our stored commercial crude supplies for the third time in ten weeks and for the fourteenth time in the past forty-seven weeks….our imports of crude oil fell by an average of 1,041,000 barrels per day to an average of 5,994,000 barrels per day, after rising by an average of 483,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 400,000 barrels per day to an average of 2,514,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,480,000 barrels of per day during the week ending October 8th, 1,441,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly 100,000 barrels per day higher at 11,400,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 14,841,000 barrels per day during the cited reporting week… 

meanwhile, US oil refineries reported they were processing an average of 15,061,000 barrels of crude per day during the week ending October 8th, 684,000 fewer  barrels per day than the amount of oil they processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 755,000 barrels of oil per day were being added to the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 936,000 barrels per day less than what was added to storage plus what our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+936,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed...moreover, since last week’s unaccounted for oil was at (-273,000) barrels per day, there was an 1,209,000 barrel per day balance sheet difference in the crude oil fudge figure from a week ago, thus rendering the week over week supply and demand changes indicated by this report nonsense….however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we’ll continue to report them as they’re published, just as they’re watched & believed to be reasonably accurate by most everyone in the industry….(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,512,000 barrels per day last week, which was 22.2% more than the 5,327,000 barrel per day average that we were importing over the same four-week period last year…the rounded 755,000 barrel per day net increase in our crude inventories came as 870,000 barrels per day were added to our commercially available stocks of crude oil, while 114,000 barrels per day were pulled out from our Strategic Petroleum Reserve, part of an emergency loan of oil to Exxon in the wake of hurricane Ida….this week’s crude oil production was reported to be 100,000 barrels per day higher at 11.400,000 barrels per day even though the EIA"s rounded estimate of the output from wells in the lower 48 states was unchanged at 10,900,000 barrels per day because a 4,000 barrel per day increase in Alaska’s oil production to 452,000 barrels per day added 100,000 barrels per day to the reported rounded national production total….US crude oil production had hit a pre-pandemic record high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 13.0% below that of our pre-pandemic production peak, but 35.2% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016…

meanwhile, US oil refineries were operating at 86.7% of their capacity while using those 15,061,000 barrels of crude per day during the week ending October 8th, down from 89.6% of capacity the prior week, and below normal utilization for early autumn refinery operations…the 15,061,000 barrels per day of oil that were refined this week were still 10.9% more barrels than the 13,577,000 barrels of crude that were being processed daily during the pandemic impacted week ending October 9th of last year, but 2.4% less than the 15,436,000 barrels of crude that were being processed daily during the week ending October 11th, 2019, when US refineries were operating at what was then also a below normal 83.1% of capacity, due to flooding in the wake tropical storm Imelda…

even with this week’s decrease in the amount of oil being refined, the gasoline output from our refineries was higher, increasing by 239,000 barrels per day to 9,605,000 barrels per day during the week ending October 8th, after our gasoline output had decreased by 523,000 barrels per day over the prior week.…this week’s gasoline production was 4.0% more than the 9,240,000 barrels of gasoline that were being produced daily over the same week of last year, but 3.9% lower than the gasoline production of 9,998,000 barrels per day during the week ending October 11th, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 72,000 barrels per day to 4,706,000 barrels per day, after our distillates output had increased by 130,000 barrels per day over the prior week…after this week’s decrease, our distillates output was still 10.2% more than the 4,269,000 barrels of distillates that were being produced daily during the week ending October 9th, 2020, and fractionally more than the 4,688,000 barrels of distillates that were being produced daily during the week ending October 11th, 2019..

despite the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the first time in four weeks, and for fifteenth time in twenty-seven weeks, and for the 26th time in forty-six weeks, falling by 1,958,000 barrels to 223,107,000 barrels during the week ending October 8th, after our gasoline inventories had increased by 3,256,000 barrels over the prior week...our gasoline supplies decreased this week even though the  amount of gasoline supplied to US users fell by 241,000 barrels per day to 9,186,000 barrels per day because our imports of gasoline fell by 545,000 barrels per day to an eight month low of 542,000 barrels per day, and because our exports of gasoline rose by 295,000 barrels per day to 699,000 barrels per day…after this week’s inventory decrease, our gasoline supplies were 0.9% lower than last October 9th's gasoline inventories of 225,121,000 barrels, and about 2% below the five year average of our gasoline supplies for this time of the year…

with the decrease in our distillates production, our supplies of distillate fuels also decreased for the seventh time in nine weeks and for the 18th time in 27 weeks, falling by 24,000 barrels to 129,307,000 barrels during the week ending October 8th, after our distillates supplies had decreased by 396,000 barrels during the prior week….our distillates supplies fell again this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 433,000 barrels per day to 3,932,000 barrels per day, because our imports of distillates fell by 108,000 barrels per day to 190,000 barrels per day, and because our exports of distillates rose by 200,000 barrels per day to 968,000 barrels per day...after eighteen inventory decreases over the past twenty-seven weeks, our distillate supplies at the end of the week were 21.4% below the 164,551,000 barrels of distillates that we had in storage on October 9th, 2020, and about 9% below the five year average of distillates stocks for this time of the year…

meanwhile, even with the decrease in our oil imports and the increase in our oil exports, our commercial supplies of crude oil in storage rose for the eighth time in the past twenty-nine  weeks and for the 18th time in the past year, increasing by 6,088,000 barrels over the week, from 420,887,000 barrels on October 1st to 426,975,000 barrels on October 8th, after our commercial crude supplies had increased by 2,345,000 barrels over the prior week…even after this week’s increase, which was the largest in seven months, our commercial crude oil inventories remained about 6% below the most recent five-year average of crude oil supplies for this time of year, but were still about 28% above the average of our crude oil stocks at the second weekend of October over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring and remained elevated for most of the year after that, our commercial crude oil supplies as of this October 8th were 12.7% less than the 489,109,000 barrels of oil we had in commercial storage on October 9th of 2020, and are now 1.8% less than the 434,850,000 barrels of oil that we had in storage on October 11th of 2019, but still 2.5% more than the 416,441,000 barrels of oil we had in commercial storage on October 12th of 2018…

finally, with our inventory of crude oil and and our supplies of all products made from oil still near multi year lows, we'll continue to check the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....we find that total inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, rose by 4120,000 barrels this week, from 1,851,562,000 barrels on October 1st to 1,855,682,000 barrels on October 8th, and they are now up by 14,055,000 barrels from the six year low of three weeks earlier...

OPEC's October Oil Market Report

Wednesday of this week saw the release of OPEC's October Oil Market Report, which covers OPEC & global oil data for September, and hence it gives us a picture of the global oil supply & demand situation in the second month after 'OPEC+' agreed to increase their output by 400,000 barrels per day monthly from the previously agreed to July level, which was part of the fifth production quota policy reset they've made over the past year and a half, all in response to the pandemic-related slowdown and subsequent recovery...we again want to caution that the oil demand estimates made by OPEC herein, while the course of the Covid-19 pandemic still remains uncertain in most countries around the globe, should be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods..

the first table from this monthly report that we'll check is from the page numbered 50 of this month's 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 uses an average of estimates from six "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) and the industry newsletter Petroleum Intelligence Weekly, 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...

September 2021 OPEC crude output via secondary sources

As we can see on the bottom line of the above table, OPEC's oil output increased by 486,000 barrels per day to 27,328,000 barrels per day during September, up from their revised August production total of 26,842,000 barrels per day...however, that August output figure was originally reported as 26,762,000 barrels per day, which therefore means that OPEC's August production was revised 80,000 barrels per day higher with this report, and hence OPEC's September production was, in effect, a 566,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official August OPEC output figures as reported a month ago, before this month's revision)...

According to the agreement reached between OPEC and the other oil producers at their Ministerial Meeting on July 18th, the oil producers party to that agreement were to raise their output by a total of 400,000 barrels per day in September, which would include an increase of roughly 250,000 barrels per day from the OPEC members listed above...however, as you can see from the above table, OPEC's increase of 486,000 barrels per day was far more than that....we can also see that production increases of 156,000 barrels per day from the Saudis, 139,000 barrels per day from the Saudis, and 84,000 barrels per day from Iraq were the major factors in OPEC's September output increase....however, most of Nigeria's output increase is just a recovery from August, when their production fell by 89,000 barrels per day, and when OPEC's output was already 684,000 barrels per day short of what they were expected to produce...hence the excessive increase in OPEC's September output still leaves the cartel more than 110% in compliance with the agreement they made with Russia and other producers...

Recall that last year's original oil producer's agreement was to cut production by 9.7 million barrels per day from an October 2018 baseline for just two months early in the pandemic, during May and June of last year, but that initial agreement had been extended to include July 2020 at a meeting between OPEC and other producers on June 6th, 2020....then, in a subsequent meeting in July of last year, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August and subsequent months, which thus became the agreement that governed OPEC's output for the rest of 2020...the OPEC+ agreement for this January's production, which was later extended to include February and March and then April's output, was to further ease their supply cuts by 500,000 barrels per day to 7.2 million barrels per day from that original baseline...then, during a difficult meeting on April 1st of this year, OPEC and the other oil producers that are aligned with them agreed to incrementally adjust their oil production higher each month over the next three months, taking their agreement through July....production levels for August and the following months were to be determined by a July 1st meeting, but that meeting was adjourned on July 2nd due to a dispute between the UAE and the Saudis over reference production levels, and a subsequent attempt to restart that meeting on July 5th was called off....so it wasn't until July 18th that a tentative compromise addressing August quotas was worked out, allowing oil producers in aggregate to increase their production by 400,000 barrels per day in August and later months, and boosting reference production levels for the UAE, the Saudis, Iraq and Kuwait beginning in April 2022...

OPEC arrived at the production quotas for August and September of this year by repeatedly adjusting the original 23%, or 9.7 million barrel per day cut from the October 2018 baseline that they first agreed to for May and June 2020, first to a 7.7 million barrel per day reduction from the baseline for the remainder of 2020, then to a 7.2 million barrel per day production cut from the baseline for the first four months of this year, which was actually raised to an 8.2 million barrel per day reduction after the Saudis unilaterally committed to cut their own production by a million barrels per day during February, March, and then later during April of this year....under the prior agreement, OPEC's production cut in April was at 4,564,000 barrels per day from the October 2018 baseline, which was lowered to 3,650,000 barrels per day from the baseline with the latest agreement, which thus set the July production quota for the "OPEC 10" at 23,033,000 barrels per day, with war torn Libya and US sanctioned producers Iran and Venezuela exempt from the production cuts imposed by this agreement....for OPEC and the other producers to increase their output by 400,000 barrels per day from that July level, each producer would be allowed to increase their production by just over 1% per month...for the ten members of OPEC who agreed to impose cuts on themselves, that would mean their August output quota would be roughly 23,275,000 barrels per day, and then roughly 23,525,000 barrels per day in September....therefore, the 23,150,000 barrels those 10 OPEC members produced in September were 375,000 barrels per day short of what they were expected to produce, with Nigeria, Angola and the Saudis accounting for the most of the shortfall..

The next graphic from this month's report that we'll highlight shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from October 2019 to September 2021, and it comes from page 51 (pdf page 61) of OPEC's October Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....

September 2021 OPEC report global oil supply

Including this month's 486,000 barrel per day increase in OPEC's production from what they produced a month earlier, OPEC's preliminary estimate indicates that total global liquids production increased by a rounded 610,000 barrels per day to average 95.93 million barrels per day in September, a reported increase which apparently came after August's total global output figure was revised down by 370,000 barrels per day from the 95.69 million barrels per day of global oil output that was estimated for August a month ago, as non-OPEC oil production rose by a rounded 120,000 barrels per day in September after that revision, driven by increases in production in non-OECD countries, particularly Russia, while output in the OECD countries decreased by 430,000 barrels per day​, with drop in the oil output from North America due to Hurricane Ida largely responsible for the non-OPEC production decrease in September...

After that increase in September's global output, the 95.93 million barrels of oil per day that were produced globally during the month were 5.34 million barrels per day, or 5.9% more than the revised 90.59 million barrels of oil per day that were being produced globally in September a year ago, which was the second month after OPEC and other producers agreed to reduce their output cuts from 9.7 million barrels per day to 7.7 million bpd (see the October 2020 OPEC report (online pdf) for the originally reported September 2020 details)...with this month's relatively large increase in OPEC's output, their September oil production of 27,328,000 barrels per day rose to 28.5% of what was produced globally during the month, an increase of 0.3% from their revised 28.2% share of the global total in August, which itself was revised up from 28.0%, on this month's upward revision to OPEC's August output and downward revision to global totals....OPEC's September 2020 production was reported at 24,106,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 3,222,000 barrels per day, or 13.4% more barrels per day of oil this September than what they produced a year earlier, when they accounted for 26.6% of global output...

Even after the increases in OPEC's and global oil output that we've seen in this report, the amount of oil being produced globally during the month fell far short of the expected global demand, as this next table from the OPEC report will show us..

September 2021 OPEC report global oil demand

The above table came from page 26 of the OPEC October Oil Market Report (pdf page 36), and it shows regional and total oil demand estimates in millions of barrels per day for 2020 in the first column, and OPEC's estimate of oil demand by region and globally, quarterly over 2021 over the rest of the table...on the "Total world" line in the fourth column, we've circled in blue the figure that's relevant for September, which is their estimate of global oil demand during the third quarter of 2021... OPEC has estimated that during the 3rd quarter of this year, all oil consuming regions of the globe were using an average of 98.33 million barrels of oil per day, which as you can see in the green ellipse above, is a rounded 0.13 million barrels per day downward revision from the 98.46 million they had estimated for the 3rd quarter a month ago, which still reflects a bit of coronavirus related demand destruction compared to 2019, when global demand averaged over 101 million barrels per day during the summer months....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were only producing 95.93 million barrels million barrels per day during September, which would imply that there was a shortage of around 2,400,000 barrels per day in global oil production in September when compared to the demand estimated for the month...

in addition to figuring that September oil shortage implied by this report, the downward revision of 370,000 barrels per day to August's global oil output that's implied in this report, combined with the 130,000 barrels per day downward revision to 3rd quarter demand that we've circled in green, means that the 2,770,000 barrels per day global oil output shortage we had previously figured for August would now be revised to a shortage of 3,020,000 barrels per day....similarly, the 130,000 barrels per day downward revision to 3rd quarter demand means that the shortage of 2,730,000 barrels per day we had previously figured for July would have to be revised to a shortage of 2,600,000 barrels per day...

Note that in green we've also circled a downward revision of 260,000 barrels per day to second quarter demand, a quarter when there was also a shortage of oil being produced globally.... but based on that downward revision to demand, our previous estimate that there was a shortage of 920,000 barrels per day in June would now be revised to a 660,000 barrels per day shortage, the oil shortage of 2,250,000 barrels per day that we had previously figured for May would have to be revised to a shortage of 1,990,000 barrels per day, & the 2,600,000 barrels per day global oil output shortage we had previously figured for April would have to be revised to a shortage of 2,600,000 barrels per day...

Also note that in green we have also circled a modest downward revision of 40,000 barrels per day to OPEC's previous estimate of first quarter demand....for March, that means that the global oil output surplus of 200,000 barrels per day we had previously figured for March would now be revised to a surplus of 240,000 barrels per day... similarly, the downward revision to first quarter demand means that the 810,000 barrels per day global oil output shortage we had previously figured for February would now be revised to a shortage of 770,000 barrels per day, and that the global oil output surplus of 410,000 barrels per day we had previously figured for January would now be revised to a surplus of 450,000 barrels per day, in light of that 40,000 barrel per day downward revision to first quarter demand...

You might also note that we have also circled a 60,000 barrel per day upward revision to 2020's demand circled in orange....while we're not inclined to go back and recompute the figures for each month of last year in light of that revision, suffice it to say that the quantities of oil produced globally during the pandemic of 2020 averaged over 3 million barrels per day more than anyone wanted, and that an average 6,000 barrels per day upward revision to global demand during that period would be a drop in the bucket in comparison...

This Week's Rig Count

The number of drilling rigs active in the US increased for 48th time out of the past 56 weeks during the week ending October 15th, but they were still 31.5% below the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US increased by ten to 543 rigs this past week, which was also 261 more rigs the pandemic hit 282 rigs that were in use as of the October 16th report of 2020, but was still 1,386 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global oil market in an attempt to put US shale out of business….

The number of rigs drilling for oil was up by 12 to 445 oil rigs this week, after they had risen by 5 oil rigs the prior week, and there are now 240 more oil rigs active now than were running a year ago, while they still amount to just 27.7% the high of 1609 rigs that were drilling for oil on October 10th, 2014….at the same time, the number of drilling rigs targeting natural gas bearing formations was down by 1 to 98 natural gas rigs, which was still up by 2​4 natural gas rigs from the 7​4 natural gas rigs that were drilling during the same week a year ago, but still only 6.1% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….meanwhile, the Kern county California horizontal rig that Baker Hughes had classified as "miscellaneous' was shut down this week, and no other such "miscellaneous' rigs are currently deployed, wh​ich cntrasts to a year ago​, when​ there were three such "miscellaneous' rigs reported to be active...

The Gulf of Mexico rig count was up by two rigs to twelve rigs this week, which is still short of the 14 rigs deployed in the Gulf the week before Hurricane Ida approached, with eleven of this week's Gulf rigs drilling for oil in Louisiana waters and another drilling for oil in Alaminos Canyon, offshore from Texas....the Gulf rig count is also ​still ​down by 2 rigs from a year ago, when 12 Gulf rigs were drilling for oil offshore from Louisiana and two were deployed for oil in Texas waters….in addition, the last rig that had been drilling for natural gas off the shore of the Kenai peninsula in Alaska was shut down this week, and there is no drilling off our other coasts, and hence the national rig count of 12 is down from 14 a year ago, when there was also no drilling off Alaska or off our other coasts...

In addition to those rigs offshore, we continue to have two water based rigs drilling inland; one is a directional rig targeting oil at a depth of over 15,000 feet, drilling from an inland body of water in Plaquemines Parish, Louisiana, near the mouth of the Mississippi, and the other is drilling for oil in the Galveston Bay area, and hence the inland waters rig count of two is up from one from a year ago..

The count of active horizontal drilling rigs was down by 2 to 481 horizontal rigs this week, which was still more than double the 240 horizontal rigs that were in use in the US on October 1​6th of last year, but was just 35.0% of the record 1,374 horizontal rigs that were deployed on November 21st of 2014..…on the other hand, the vertical rig count was up by 2 to 30 vertical rigs this week, and those were also up by ​9 from the ​2​1 vertical rigs that were operating during the same week a year ago….at the same time, the directional rig count was up by 10 at 32 directional rigs this week, and those are now up by ​11 from the 21 directional rigs that were in use on October ​16th of 2020….

The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of October 15th, the second column shows the change in the number of working rigs between last week’s count (October 8th) and this week’s (October 15th) count, the third column shows last week’s October 8th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 16th of October, 2020...

October 15 2021 rig count summary

the increase of 10 directional rigs is a surprise, but the only way i know of we'd be able to find out where they were would be to dig through the individual well records in the North America Rotary Rig Count Pivot Table (Feb 2011 - Current) (xls); Baker Hughes doesn't aggregate trajectory data by basin....so ​today ​we'll again start by checking the Rigs by State file at Baker Hughes for changes in the Texas Permian basin, ​where ​we find that two rigs were added in Texas Oil District 8, which is the core Permian Delaware, and one rig was added in Texas Oil District 7C, which includes the southern counties in the Permian Midland, while one rig was removed from Texas Oil District 8A, which includes the northern counties of the Permian Midland, thus netting out to a two rig increase in the Texas Permian​...since the national Permian basin rig count was only up by one, that means that the rig that had been drilling in New Mexico was pulled out of the westernmost Permian Delaware....

elsewhere in Texas, there were two rigs added in Texas Oil District 2, which would account for this week's Eagle Ford shale increase, while one rig was removed from Texas Oil District 1, which also could have been an Eagle Ford rig, if both of the District 2 additions were targeting that basin...there was also rig was added in Texas Oil District 7B, which could have been targeting a far eastern Permian Delaware county if one of the other rigs wasn't, while a rig was pulled out of Texas Oil District 6, which would account for the Haynesville shale decrease..

elsewhere, the two rigs added in the Cana Woodford account for the Oklahoma rig increase, while the 2 rigs added in the Gulf account for the Louisiana increase; the state's land based rigs were unchanged...meanwhile, the two rigs added in California were deployed in a basin that Baker Hughes doesn't track, but they likely account for two of directional rigs added this week, given the state's folded geology, and we know that two land based rigs were also added in Alaska, given the ​Alaskan ​offshore rig that was shut down...

this week's changes to natural gas rigs include the rig pulled out the Haynesville in Texas, a ​gas ​rig pulled out of Ohio's Utica shale, and a natural gas rig pulled out of Oklahoma's Arkoma Woodford, where the basin count remained unchanged because an oil rig was added ​there ​at the same time... natural gas rigs were only down one nationally because two new natural gas rigs were deployed in a basin ​or basins ​that Baker Hughes doesn't track...

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Does "other Minerals" Language In Ohio Deeds Include Oil And Gas? It Depends. - Earlier this year, Ohio's Court of Appeals for the Seventh District weighed in on the question of whether "other minerals" in a deed included oil and gas. The answer is, essentially, it depends.The presumption under Ohio law is that "other minerals" in deeds does include oil and gas, but that presumption can be overcome. In reaching that conclusion in O'Brandovich v. Hess Ohio Devs., LLC, the Court of Appeals walked through and provided the rationale behind the facts and outcomes of what it viewed as the major cases developing the presumption

  • Detlor v. Holland
  • Gordon v. Carter Oil, Co.
  • Hardesty v. Harrison
  • Jividen v. New Pittsburg Coal Co.
  • Muffley v. M.B. Operating Co., Inc.
  • Wiseman v. Cambria Products Co.
  • Coldwell v. Moore
  • Sheba v. Kautz; and
  • Corso v. Miser

"It is clear from this line of cases that we are now to begin our analysis with a presumption that the phrase 'other minerals' includes oil and gas interests," the court noted. "With that in mind, it must then be determined if the deed demonstrates whether the parties intended to include oil and gas interests. If the deed is ambiguous, then the parties are permitted to introduce extrinsic evidence to demonstrate the parties' intent."When looking at the deed language to determine whether the presumption is overcome, the courts are to consider whether the instrument "includes language that may be relevant to the extraction of oil and gas." The Court of Appeals also noted, though, that "[i]f oil and gas was not commonly being produced at the time the deed was written, we cannot presume it was intended to include these minerals."The Court of Appeals explained that "[o]nce production [of oil and gas] in Ohio became fairly commonplace, however, we may expect some reference to oil and gas when using the general language 'other minerals.' This has come to mean that, in Ohio, we start with the presumption that the general phrase may include oil and gas rights so long as the language can be reasonably seen to include these minerals in some way and other language in the deed does not exclude these minerals."Ultimately, the Court of Appeals concluded the deed language before it was not ambiguous and did not overcome the presumption. Thus, in this case, "other minerals" did include oil and gas.

Old oil and gas sites are a climate menace. Meet the company that owns more of America’s decaying wells than any other. -- When a couple of Bloomberg Green reporters showed up at the Tri-Valley Wildlife Area in the rolling hills of southeast Ohio on a muggy June morning, the only sounds were birdsongs and the whirring of our infrared camera. We set out on foot and soon spotted the first of several rusty natural gas wells scattered across a broad meadow. Their storage tanks, half-covered with vines and brush, looked like the forgotten monuments of some lost civilization. There are hundreds of thousands of such decrepit oil and gas wells across the U.S., and for a long time few people paid them much mind. That changed over the past decade as scientists discovered the surprisingly large role they play in the climate crisis. Old wells tend to leak, and raw natural gas consists mostly of methane, which has far more planet-warming power than carbon dioxide. That morning in Ohio we pointed our camera at busted pipes, rusted joints, and broken valves, and we saw the otherwise invisible greenhouse gas jetting out. A sour smell lingered in the air. To Rusty Hutson, it smells like money.Hutson is the founder and chief executive officer of one of the strangest companies ever to hit the American oil patch and the reason for our four-day visit to the Appalachian region. While other oilmen focus on drilling the next gusher, Hutson buys used wells that generate just a trickle or nothing at all. Over the past four years his Diversified Energy Co. has amassed about 69,000 wells, eclipsing Exxon Mobil Corp. to become the largest well owner in the country. Investors love him. Since listing shares in 2017, Hutson’s company has outperformed almost every other U.S. oil and gas stock, swelling his personal stake to more than $30 million. But Diversified’s breakneck growth has alarmed some regulators, landowner groups, and industry insiders, not to mention environmental advocates. State laws require that every well be plugged with cement after it runs dry, an expensive and complicated chore. At the rate Diversified is paying dividends to shareholders, some worry there will be nothing left when the bills come due. If a company can’t meet its plugging obligations, that burden falls to the state, which means Ohio, Pennsylvania, and West Virginia could be stuck with a billion-dollar mess. “The model seems like it’s built on abandoning those assets,” says Ted Boettner, who’s studied abandoned wells at the Ohio River Valley Institute, a regional research organization. “It looks like a liability bomb that’s destined to explode.”Hutson says there’s no cause for worry. He claims to be able to squeeze more gas out of old wells than other companies can and keep them going longer. On average, he figures his wells have an additional 50 years in them, which means there’s no hurry to start socking away money to plug them. It also means they could be spouting pollution long past 2050, the target date set by PresidentJoe Biden for zeroing out emissions across the economy. State regulators say Diversified hasn’t broken any rules by building an empire of dying wells. Nor has it violated any restrictions on methane emissions, because none apply. Indeed, state and federal policies—from plugging regulations to tax subsidies—encourage companies to do exactly what Diversified is doing: Keep almost dead assets on life support as long as possible, no matter how much they may damage the planet.

A Tiny Alabama Company Owns More Gas Wells Than Exxon - A Birmingham-based oil and gas producer called Diversified Energy has built its business model on buying up old, low-producing gas wells which are spewing out methane, reporting from Bloomberg shows. The wells are largely not very productive—thousands of them were producing no usable gas at all at the time of purchase. But thanks to subsidies, tax incentives, legal loopholes, and an overall lack of regulation, the company has managed to beat out almost every other fossil fuel company stock in the U.S. The very existence of this company is a sign of the market’s complete inability to usher in meaningful climate action.It’s never been clearer that the world must stop coal, oil, and gas production. Even the International Energy Agency—which was founded by Henry Kissinger, not hippie climate activists—is calling for the end of fossil fuels. Free market believers, from those at the World Economic Forum to those inthe White House, say that companies can lead this transition.Yet for now, dirty energy still largely powers our world, so it’s still profitable, and it’s also heavily subsidized and poorly regulated by the U.S. and most other countries. It should be no surprise that corporations are still making a killing, but Diversified Energy is a particularly shocking example of how to legally game the system. The Bloomberg report found the company has amassed some 69,000 wells, more than name-brand companies like Exxon and Chevron, and what amounts to “about 1 in 5 wells across Ohio, Pennsylvania, and West Virginia.”Research shows that aging and abandoned oil and gas wells are among the dirtiest ones in the nation. Methane is 80 times more potent than carbon dioxide in terms of how much it heats up the planet. The Intergovernmental Panel on Climate Change found methane levels in the atmosphere haven’t been this high in at least 800,000 years and sounded the alarm about the risks it poses. The new Bloomberg report suggests that Diversified’s wells aren’t an exception to the old and abandoned well rule. “At 59% of the sites we visited, emissions were significant enough to cause our detector to sound a safety alarm, indicating that the concentration of methane near the instrument’s sensor exceeded 5,000 parts per million,” the authors wrote. “Normal air contains about 2 parts.” The fact that Diversified owns so many wells also creates a very dangerous situation. Should the company go under or otherwise not meet the obligations to plug the wells it owns, the states where it operates would be on the hook. Diversified claims it has cheap techniques to revive wells and plug them. But if it fails, it would leave states with a very costly project to clean up the mess.“The model seems like it’s built on abandoning those assets,” Ted Boettner, a researcher at the Ohio River Valley Institute who has looked at abandoned wells, told Bloomberg. “It looks like a liability bomb that’s destined to explode.”

EAP Seeks Permits for Three Wells in Columbiana County - EAP Ohio LLC, a division of Houston-based Encino Acquisition Partners, has applied for permits to drill three new wells in Columbiana County, according to data from the Ohio Department of Natural Resources. The applications were filed Oct. 5 and target the Point Pleasant formation of the Utica shale play in Washington Township, ODNR data show. All three wells are intended for the Maskaluk well pad, according to ODNR. EAP has stepped up its drilling program in Columbiana County. In September, the energy company received five permits from ODNR, four to deepen existing wells and another to drill a new well at the Sevek pad in Washington Township. In 2018, the company purchased the remaining leaseholds of Chesapeake Energy Corp. when the Oklahoma City driller sold its position in the Utica. Columbiana County continues to be the most active region for energy exploration companies doing business in the northern tier of the Utica-Point Pleasant play.

Report: Drilling spills ruined wells and polluted streams in Westmoreland, across Pennsylvania - It has been more than four years since Edward and Alice Mioduski of Loyalhanna Township have been able to drink water from their well near Loyalhanna Lake.Drilling mud mixed with the mineral bentonite leaked from the hole that Sunoco Pipeline L.P. was boring underneath the lake in May 2017. It bled into the aquifer that their 95-foot-deep well had tapped into for decades. The crystal-clear water turned cloudy gray with little white blobs floating around.“Within a short time, it went to hell,” Alice Mioduski said. Now, they have a 1,500-gallon plastic tank in their backyard that provides water for showering and washing clothes — when it doesn’t freeze in the winter — paid for by Sunoco. A filtration system inside the house provides water for drinking and cooking. The damage to streams and water supplies by the leaks and lost fluids during construction of the 307-mile Mariner East II pipeline is outlined in a 64-page indictment handed down last week by a statewide investigating grand jury. Energy Transfer L.P. of Dallas, a successor to Sunoco Pipeline, was slapped with 48 criminal violations of the Clean Streams Law. Fluids that were to return to the surface and be dumped into a drill pit for reuse simply disappeared underground or bubbled up to the surface.The grand jury alleges Sunoco “criminally failed” to report and resolve the environmental hazards created by Mariner East II across the state. The energy giant is accused of failing to report environmental violations or underreporting those problems, permitting horizontal drilling where it did not have permits and having its drilling subcontractors use drilling fluids not permitted in Pennsylvania. The grand jury found Sunoco hired subcontractors for horizontal directional drilling who were not familiar with the state’s geology or regulations, and that those companies hired workers who were young and inexperienced. The Mioduskis want Sunoco to drill another well on their property rather than having to maintain a filtration system to remove the pollution from their existing well for what could be years and years. “We’re retired. We’re in our 70s. We just want to get our water back,” Ed Mioduski said. The Mioduskis were not alone in having their water supply impacted by the pipeline project. The state Department of Environmental Protection received 183 complaints about water supply issues from the drilling, according to the attorney general’s report.In some instances, those problems were created when high pressure used to force fluids into the bore hole while drilling beneath streams and lakes resulted in fractures in the rocks that allowed the fluids to flow into the aquifer used for well water. The fluids were to return to the surface and be dumped into a drill pit for treatment and reuse. Instead, they disappeared underground or bubbled up to the surface, according to the report.The attorney general’s criminal complaint alleges six offenses — one felony and five misdemeanors — with multiple counts that occurred between February 2017 and August 2021. Under state law, the company would only pay a fine and restitution if it is found guilty, Attorney General Josh Shapiro said. The state’s environmental regulations were not created for oversight of long linear industrial projects such as a statewide pipeline,

Pa. shale gas permits drop 28% month over month despite spiking prices | S&P Global Market Intelligence - Pennsylvania's largest shale gas producers — who have a history of increasing output to chase high futures prices only to register steep losses after glutting the market — continue to stick to low-growth, low-cost drilling plans even as natural gas prices surpass the $5/MMBtu mark. Permits for shale gas wells increased 7% in September compared to the same month in 2020, when spot prices hovered around $1.90/MMBtu, but dropped 28% from the prior month, according to permitting data from the Pennsylvania Department of Environmental Protection accessed Oct. 6. Well permits are a leading indicator of drilling activity in the state, and four of the state's five biggest producers — EQT Corp., Chesapeake Energy Corp., Range Resources Corp. and Southwestern Energy Co. — kept the pace subdued. The top five producers accounted for only 51% of the permits pulled in September, down from 53% in August. Normally, the top five drillers account for roughly two-thirds of permits pulled each month. The only producer among the top five with a large year-over-year increase in permits was Cabot Oil & Gas, now named Coterra Energy Inc. after closing its merger with Cimarex Energy Co. on Oct. 1. Coterra told investors during its second-quarter earnings call that it planned to add wells to fill new pipeline capacity opening up as The Williams Companies Inc. brings the 580 MMcf/d Leidy South expansion of its Transcontinental Gas Pipe Line Co. LLC online in the northeast portion of the state. Unlike its peers, Coterra will enter 2022 with no gas production protected with hedges that would clip the upside of the potential revenue generated by high prices this winter. While the high prices at the benchmark Henry Hub are a sharp contrast from the rock-bottom revenues drillers eked out of the Marcellus Shale in years past, the curve of NYMEX futures prices drops off quickly when winter 2022 ends. Toby Rice, the head of EQT, the nation's largest gas producer by volume, has said repeatedly that he will not add more rigs and cash to the Pittsburgh producer's business plan until seeing prices above $3/MMBtu for two to three years in the future. Shale oil and gas exploration and production companies, or E&Ps, are looking beyond the high winter prices and biding their time, "While current $76.99 per barrel and $5.72/Mcf prices receive the attention, the more important prices for our companies are in the 12-month strip currently at $70.77/barrel and $3.97/Mcf," Pennsylvania's September data showed the shape of the Marcellus Shale play changing slightly as the big drillers stayed put and smaller, private producers focused on the liquids-rich window of the play in the southwest. Private equity-backed operator PennEnergy Resources LLC pulled six permits to drill in Butler County, Pa., just north of Pittsburgh, while family-owned driller Snyder Brothers Inc. pulled seven permits in its home of Armstrong County, Pa., just to the east of Butler County.

Pennsylvania Nuns Push Back Against Judge's Decision on TransCo Pipeline Lawsuit - A handful of Catholic nuns in Pennsylvania are not happy about the Transcontinental Gas Pipe Line Co LLC’s decision to build a pipeline through Allentown, so much so that they filed a lawsuit claiming the pipeline “defiled the sacred nature of their property in eastern Pennsylvania.” A federal judge dismissed the lawsuit, but the nuns, who belong to the Adorers of the Blood of Christ order, are challenging the judge’s decision. According to the nuns, the construction of a “section of the Atlantic Sunrise Pipeline on their land in Lancaster County violates their religious practice under the Religious Freedom Restoration Act.” As a result, they are asking the 3rd U.S. Circuit Court of Appeals to look into the September ruling that dismissed their suit. The Adorers first filed their lawsuit against Transcontinental last year. They argued that the pipeline, “which was built and put into service in 2018, substantially burden(s) their exercise of religion.” The particular religious order, which first began work in Pennsylvania in 1925, believes in “protecting God’s creation by preserving the environment for future generations.” As a result, they “have been fighting climate change following a call by Pope Francis in a 2015 encyclical letter for the world’s then 1.2 billion Catholics to join the fight.” The lawsuit claimed the nuns are protected under the Religious Freedom Restoration Act, “a statute whose goal is to protect religious exercise, to punitive damages.” However, on September 30, U.S. District Judge Jeffrey Schmehl said the nuns “filed their lawsuit in the wrong venue and his court lacked jurisdiction.” The judge stated: “The Natural Gas Act, which governs interstate natural gas pipelines, gives the U.S. Court of Appeals for the D.C. Circuit exclusive jurisdiction over the Federal Energy Regulatory Commission (FERC) certificates, such as the one it handed Transco in 2017 for the pipeline.” What does that mean? Well, it means the “sisters should have challenged the decision first by petitioning FERC and subsequently by filing their lawsuit in the D.C. Circuit rather than in a district court,” according to Schmehl. This wasn’t the first time that the judge has ruled on a case filed by the sisters. In fact, back in January, he ruled that Transcontinental owed the sisters almost $170,000 over a lawsuit filed in 2017 “over the condemnation of an acre of the sisters’ 24-acre tract for the pipeline.” While the Adorers have a problem with the environmental aspect of the pipeline, it is important to note that the “The Atlantic Sunrise Pipeline transports Marcellus shale gas from Pennsylvania to markets across the mid-Atlantic and southeastern states.”

The Rise Of Responsibly Sourced Natural Gas --Given everything that’s happened lately on the ESG front — with a lot more expected — it’s safe to say that while hydrocarbons will continue to play an important role in the global economy for the foreseeable future, the companies that produce, transport and process crude oil, natural gas and NGLs will need to work much harder to minimize and mitigate their impact on the environment. Traditional energy companies have been scrambling to respond to the full-court press by investors, lenders and others to rein in and offset their greenhouse gas (GHG) emissions. In addition to establishing goals for slashing their GHGs, and taking steps to tighten their upstream, midstream, and downstream operations, they’ve offered and delivered “carbon-neutral” shipments of LNG, oil and LPG to overseas buyers, using “nature-based” carbon credits to offset their life-cycle emissions. Now, as we discuss in today’s RBN blog, there’s a big push by U.S. gas distributors and other buyers to shift to gas that’s been produced, gathered, processed and transported as cleanly as humanly possible. Over the last year, concern about climate change has reached critical mass and the pressure is on the energy industry to figure out how it’s going to navigate the uncertain waters ahead. While some on the fringes are sure to disagree, it seems likely that natural gas will continue to play an important role in U.S. and global energy supply for at least the next couple of decades, and maybe longer. However, methane (CH4), the primary component of pipeline gas, may not be ideal — it not only produces carbon dioxide (CO2) when it’s consumed, it’s a very potent GHG on its own and releasing even small unburned quantities of it into the atmosphere can have deleterious effects. That said, natural gas burns much cleaner than coal, it’s abundantly available and relatively inexpensive, and, as the last couple of weeks showed, the world still needs cheap gas to fuel global economic growth (see To the Moon and Back). And, yes, as has been said many times, it’s a close-to-perfect “bridge fuel” to ease the transition from a hydrocarbon-driven world to one fueled more by wind, solar, hydrogen and other non-carbon energy sources. A lot of people say, well, maybe natural gas needs to remain a significant part of the energy mix in its current form and also, perhaps, as a feedstock for hydrogen production — at least until the Rolling Stones, U2, and maybe even the Red Hot Chili Peppers stop touring — but the least we can do in the interim is to minimize fugitive methane emissions or offset their potential global warming effect. That view has gained traction, not just among the environmentally minded slice of the general public but among many investors and lenders, as well as increasing numbers of energy-consuming companies and energy-producing ones. The ESG movement, which we discussed in depth in our five-part Paradise blog series, is already having a profound effect, with perhaps the biggest one being the push by companies of all stripes — including energy producers, midstreamers, refiners, and their many customers — to significantly reduce their GHG emissions by 2030 and aim for net-zero emissions by mid-century or so.

The Energy Information Administration expects US natural gas production to rise in 2021 and demand decline -The US Energy Information Administration said on Wednesday that natural gas production in the United States will rise in 2021 after falling last year due to the Corona virus destroying demand.The government agency added, in its monthly energy forecast report, that domestic gas demand will decline for the second consecutive year in 2021.And it expected that dry gas production will rise to 92.55 billion cubic feet per day in 2021 and to 96.41 billion cubic feet per day in 2022, from 91.49 billion cubic feet per day in 2020. This compares with an all-time high of 92.87 billion cubic feet per day in 2019.On the other hand, US gas futures rose today 8.5 cents, or 1.5%, to record at a settlement of $5.590 per million British thermal units, the highest closing since October 7.

US natural gas falls 4pc to 2-week low on mild weather, rising output - US natural gas futures fell 4pc to a two-week low on Monday on rising output and forecasts milder than normal weather will continue through late October. That mild weather will keep heating demand light and allow utilities to continue injecting more gas into storage than usual ahead of the winter. US utilities have already injected more gas into storage than usual over the past four weeks. Traders noted US gas futures were down even though gas prices in Europe were up about 5pc earlier in the day and US oil futures climbed to their highest since October 2014 on worries energy supplies could run short this winter. Last week, gas prices in Europe and Asia soared to record highs on worries Europe will not have enough gas in storage for the winter heating season and as Asia's demand for the fuel remains insatiable. Those worries boosted US gas prices to their highest since 2008 last week on expectations competition for gas from Europe and Asia would keep demand for US liquefied natural gas (LNG) exports strong. But there is a growing belief in the market that the United States will have more than enough gas for the winter after four weeks of bigger-than-usual storage builds and a lack of capacity to produce more LNG for export. Front-month gas futures fell 22.0 cents, or 4.0pc, to settle at $5.345 per million British thermal units (mmBtu), their lowest close since Sept. 24. Data provider Refinitiv said gas output in the US Lower 48 states rose to an average of 92.3 billion cubic feet per day (bcfd) so far in October from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. Refinitiv projected average US gas demand, including exports, would rise from 84.9 bcfd this week to 86.1 bcfd next week as the weather turns seasonally cooler and more homes and businesses turn on their heaters. The forecast for next week was higher than Refinitiv expected on Friday. With gas prices near $30 per mmBtu in Europe and $32 in Asia, versus under $6 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce. But no matter how high global prices rise, the United States only has capacity to turn about 10.5 bcfd of gas into LNG. Global markets will have to wait until later this year to get more from the United States when the sixth liquefaction train at Cheniere Energy Inc's Sabine Pass and Venture Global LNG's Calcasieu Pass in Louisiana are expected to start producing LNG in test mode.

U.S. natgas gains 3% on cooler midday forecast, rising LNG feedgas (Reuters) - U.S. natural gas futures gained 3% on Tuesday after the midday forecast called for cooler weather and higher heating demand than expected earlier in the day. In addition, traders noted Berkshire Hathaway Energy's Cove Point liquefied natural gas (LNG) export plant in Maryland exited a three-week maintenance outage, which should boost the amount of gas LNG export plants consume. Demand for U.S. LNG remains high around the world. Gas prices in Europe, where the amount of gas in storage is extremely low going into the winter heating season, gained about 5% on Tuesday. Mild weather has allowed U.S. utilities to stockpile more gas than usual for four weeks in a row. Analysts expect utilities will keep adding large amounts of gas into storage in coming weeks with production mostly rising and the weather expected to remain warmer-than-normal through the end of October. Some traders, however, did note that output from Haynesville Shale was expected to decline on Tuesday. Looking ahead, analysts expect U.S. inventories will top 3.5 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average. Elsewhere in the world, the situation is more dire. Many energy-intensive industries have already shut or limited operations in Europe and Asia because low stockpiles in Europe and strong demand in Asia have caused fuel shortages and boosted gas and oil prices to multi-year highs. In Europe, analysts say gas stockpiles are about 15% below normal for this time of year, raising fears there may not be enough fuel available to heat homes and businesses this winter if the weather is extremely cold. Front-month gas futures rose 16.0 cents, or 3.0%, to settle at $5.505 per million British thermal units (mmBtu). On Monday, the contract closed at its lowest since Sept. 24.

Natural Gas Futures Stage Late Rally Despite Further Shrinking Expected in U.S. Storage Deficits - Traders struggled to put a fair price on natural gas futures Wednesday amid conflicting signals in the United States and overseas. After plunging to a $5.350/MMBtu intraday low, however, a cooler turn in the latest weather models lifted the November Nymex gas futures contract, which settled 8.5 cents higher day/day to $5.590. December climbed 9.0 cents to $5.753.Spot gas prices were a mixed bag amid some chilly weather on the West Coast and mild temperatures in most other regions. NGI’s Spot Gas National Avg. climbed 15.5 cents to $5.285.Volatility along the Nymex futures strip continued midweek, with a generally warm outlook in the United States portending a continuation of the stout storage injections experienced over the past month. After being poised to dip back into the red, prices strengthened late in the session as the midday run of the American model added demand to the long-range outlook. Prices subsequently soared to a $5.690 intraday high. After the midday runs trended chillier, adding some heating demand to the forecast, buyers stepped in and pushed the November contract higher. Bespoke noted that gas prices continued to climb post-settle after the European data set also shifted cooler. Though widespread cold has yet to show on U.S. weather maps, traders have been closely watching each run of the models. Bespoke said the coming pattern “is not exactly impressive, and this month remains on track to be one of, if not the warmest, October in our historical dataset. But, this is enough to push us to neutral, for now, as any additional demand adds overnight could easily send the market higher, even if it is not actually chilly anywhere.” Overall, light national demand is expected to continue in the near term as widespread highs of 60s to 80s rule most of the United States, according to NatGasWeather. There were some early season weather systems tracking through with rain and snow, the forecaster said, One system was exiting the Mountain West and tracking into the Midwest with highs of 30s to 50s.

U.S. natgas up near 2% on lower than expected storage build  (Reuters) - U.S. natural gas futures gained almost 2% on Thursday on a smaller-than-expected storage build, lower output, rising liquefied natural gas (LNG) exports and higher global gas prices that will keep demand for those LNG exports strong. In addition, the U.S. Climate Prediction Center said La Nina conditions have developed, which could mean a cold and wet winter for the United States. The U.S. Energy Information Administration (EIA) said utilities added 81 billion cubic feet (bcf) of gas into storage during the week ended Oct. 8. That was much lower than the 94-bcf build analysts forecast in a Reuters poll and compares with an increase of 50 bcf in the same week last year and a five-year (2016-2020) average increase of 79 bcf. Even though last week's storage build was smaller than expected, it was still bigger than usual for a fifth week in a row. Traders said the lower-than-expected storage build was due to low wind power generation last week, which caused power generators to burn more gas. Last week's injection boosted stockpiles to 3.369 trillion cubic feet (tcf), or 4.9% below the five-year average of 3.543 tcf for this time of year. While utilities in Europe scramble to fill gas inventories before the winter heating season and governments around the world seek ways to control soaring prices, the situation in the United States is much calmer. Even with U.S. oil and gas prices near multi-year highs and expected to rise higher this winter, there is a growing belief in the market that the United States will have more than enough fuel for the winter. Analysts expect U.S. gas inventories will top 3.5 tcf by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average. In Europe, analysts say stockpiles are about 15% below normal for this time of year. Front-month gas futures rose 9.7 cents, or 1.7%, to settle at $5.687 per million British thermal units (mmBtu). That was the contract's highest close since Oct. 5 when it settled at $6.312, its highest since December 2008.  Data provider Refinitiv said gas output in the U.S. lower 48 states rose to an average of 92.1 billion cubic feet per day (bcfd) so far in October from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. Over the past few days, however, daily output fell to a four-week low of around 91.0 bcfd on lower production in the Haynesville shale. Refinitiv projected average U.S. gas demand, including exports, would rise from 84.9 bcfd this week to 85.5 bcfd next week as the weather turns seasonally cooler and more homes and businesses turn on their heaters. With gas prices near $33 per mmBtu in Europe and Asia, versus around $6 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce. Refinitiv said the amount of gas flowing to U.S. LNG export plants had slipped from an average of 10.4 bcfd in September to 10.3 bcfd so far in October due to short-term work at some Gulf Coast plants and earlier maintenance at Berkshire Hathaway Energy's Cove Point LNG export plant in Maryland. With the return of Cove Point on Tuesday, however, LNG feedgas was on track to rise to a one-month high of 11.1 bcfd on Wednesday.

U.S. natgas falls near 5% on mild forecast, drop in global prices (Reuters) - U.S. natural gas futures fell almost 5% on Friday, following a 9% drop in global gas prices, on forecasts the weather in the United States will remain mostly mild through the end of October. That decline in U.S. prices came despite a slow but steady rise in U.S. liquefied natural gas (LNG) exports as utilities in Europe and Asia scramble to fill gas inventories before the winter heating season and forecasts for U.S. heating demand to increase in two weeks as the weather starts to cool. But no matter how high global prices rise, the United States was already close to producing LNG at full capacity. The storage situation in the United States, which is expected to have more than enough gas stockpiled for the winter, is much calmer. Even so, U.S. oil and gas prices have followed global prices higher in recent months and were currently trading at or near multi-year highs. Analysts expect U.S. gas inventories will top 3.5 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average. In Europe, analysts say stockpiles are about 15% below normal for this time of year. Front-month gas futures NGc1 fell 27.7 cents, or 4.9%, to settle at $5.410 per million British thermal units (mmBtu), their lowest close since Oct. 11. For the week, the front-month fell almost 3%, putting it down for a second week in a row for the first time since August. Data provider Refinitiv said gas output in the U.S. lower 48 states rose to an average of 92.0 billion cubic feet per day (bcfd) so far in October from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019.

Exports, Industrial Sector Seen Driving U.S. Natural Gas Demand This Winter - A growing industrial sector and record-high export activity are expected to be key drivers of increased U.S. natural gas demand this winter, according to a leading trade group. Liquefied natural gas (LNG) exports are expected to grow by 16% over last winter, while pipeline exports to Mexico are expected to get an 18% boost, the Natural Gas Supply Association (NGSA) said in its annual winter outlook released Thursday. Combined, the increases are expected to boost exports by 2.7 Bcf/d compared with last winter. Energy Venture Analysis (EVA), which prepared the report for NGSA, said LNG exports would remain a primary driver of domestic natural gas demand growth in this decade. The firm expects LNG feed gas deliveries to average 12.0 Bcf/d this winter, up 1.7 Bcf/d over last year. Industrial growth, meanwhile, is expected to grow by 1 Bcf/d this winter compared with last year as newbuild facilities and capacity expansions come online in natural gas-intensive sectors such as petrochemicals. According to the NGSA, 22 major gas-intensive projects are planned from 2021 to 2024. “The fundamentals in NGSA’s outlook show strong demand for natural gas at home and globally,” said NGSAA Chairman David Attwood, who is a vice president at ExxonMobil. Including exports, customer demand for U.S. natural gas is expected to increase to 111.9 Bcf/d compared with 110.9 Bcf/d last winter. However, the domestic market is predicted to shrink by 1.4 Bcf/d compared with last winter, driven by a decline in electric demand. NGSA expects the that market for natural gas will shrink by 2 Bcf due to “less temporary ‘economic switching’ to natural gas-fired power.” Meanwhile, weather is not expected to be a huge factor this year. The report’s authors predict this winter will be 1% colder than last year, meaning residential and commercial demand will likely stay the same. On the supply side, production is expected to grow by a modest 4%, reflecting an increased rig count and well completion rate. NGSA is predicting a 3.7 Bcf/d increase in natural gas production over last winter. Overall supply, which also takes into account storage and LNG and Canadian pipeline imports, is expected to average just over 99 Bcf/d this winter. NGSA is also predicting higher Henry Hub prices this winter compared with last year’s $3.09/MMBtu average. The trade group credited “a combination of strong economic growth, growing demand for natural gas, resurgent production, and decreased storage inventory,” for the forecast.

LNG Freight Rates Move Higher as Winter Nears in an Already Volatile Market - Friday kicked off the heating season across the Northern Hemisphere and liquefied natural gas (LNG) freight rates also started their annual ascent. This year could be different. Europe and Asia are locked in a fierce battle for cargoes as inventories remain low and prices have hit new records with benchmarks soaring above $30/MMBtu in both regions. After a lull in activity on the shipping market, things are heating up. Given the upside seen for LNG this winter, freight rates could double by the end of the month, according to some analysts. “As we see the fixing window move out into November, charterers are seeing freight for winter now being priced into these discussions,” shipbroker Fearnleys AS said in a note to clients. “There is also a lack of visibility on winter tonnage, adding to the firmer outlook.” In the run-up to this winter, the chartering market has been dominated by traders looking to lock in vessels for longer, according to shipbroker Braemar ACM. Charterers have aimed to cover their shipping length for the winter, keeping term rates strong and above spot freight levels. Rates spiked significantly last winter when Asian and European demand jumped amid colder-than-normal weather, forcing buyers to secure vessels at the last minute for higher prices. Vessels were tied up for longer stretches as they moved between the Atlantic and Pacific basins to meet the unexpected increase in demand. Bloomberg New Energy Finance said in its winter outlook that fears over a similar jump in rates this year have pushed term charter rates up 83% since March. Fearnleys said spot rates could move higher in the coming weeks as prompt sublet tonnage moves back into longer-term schedules and “interest for spot cargoes for late November/December mature.” Spark Commodities on Friday assessed spot freight rates for a 160,000 cubic meter LNG vessel in the Atlantic Basin at $64,000/day, up 17% from its previous assessment on Sept. 28. Spot rates in the Pacific Basin were up 12% over the same time to $70,500. The front month assessments were also up to $83,000/day in the Atlantic and $86,750 in the Pacific. Delays at the Panama Canal last winter also left fewer ships available to serve booming exports in the United States as global demand increased. The same could happen this year and ship-tracking data already shows U.S. exporters using a longer route around the Cape of Good Hope more often year-to-date to bypass the ongoing congestion as demand has remained strong. Both the sixth train at Sabine Pass LNG and Calcasieu Pass LNG in Louisiana could begin commissioning before the year is over, further boosting U.S. exports and vessel demand in the Atlantic. For now, stable shipping rates have sweetened already lucrative LNG trades with prices booming. Shipowner Flex LNG Ltd. said in a recent presentation that a U.S. LNG cargo costs about $20 million at current rates, but is valued at $112 million in Europe and $128 million in Asia.

MidAmerican says soaring natural gas prices could raise winter heating bills -As temperatures begin to drop, MidAmerican Energy, Iowa's largest power provider, is warning thousands of residential natural gas customers their winter heating bills could jump 46% to 96% over last year's due to rising costs.Natural gas prices have more than doubled since this time last year because of reduced production and inventories and global demand, a news release from the Des Moines-based utility said Tuesday.The news affects MidAmerican Energy's 602,000 natural gas customers in Iowa. Geoff Greenwood, MidAmerican's spokesman, said it doesn't expect an increase in heating bills this winter for its 704,000 electric customers.The winter heating season typically runs from November through March. "People should brace themselves," said Stewart Glickman, energy equity analyst at CFRA Research, based in New York.Glickman said all types of heating fuels, including propane, will likely climb, although not at the pace of natural gas."On a percentage basis increase, natural gas is probably the worst case," he said.The COVID-19 pandemic probably had a role in the natural gas price increase, Glickman said. Companies stored less natural gas after the public health emergency shut down much of the country last year.Since then, though, the economy has picked up, both in the U.S. and globally, pushing energy prices higher, and the costs will trickle throughout the economy, from the gasoline pump to the grocery store, he said. "Those costs will get passed onto the customers," he said.

Gas heating bills could soar this winter in North Dakota - Montana-Dakota Utilities customers who use natural gas to heat their homes could end up paying on average $170 more than usual this winter due to rising natural gas prices, according to a projection from the company. Gas prices have increased globally in recent months, and the three members of the North Dakota Public Service Commission expect the trend will have a noticeable impact in the coming months on the heating bills of North Dakotans with gas furnaces. "Consumers need to prepare," Commissioner Brian Kroshus said. "It's going to potentially be a tough heating season." The U.S. Census Bureau estimates 40% of North Dakota homes have gas heat. MDU provides natural gas to about 115,000 customers in the state, including to homes in Bismarck and Mandan. North Dakota utilities such as MDU cannot profit on the cost of gas itself. They pass the price they pay for gas through to customers, and that cost is reflected on households' monthly statements in addition to a service charge and the volume of gas used. MDU says the gas supply has grown since 2020 but it has not met the demand, particularly from other countries seeking exports of liquefied natural gas from the United States. Drilling to bolster gas production has not kept pace with increased prices. That's playing out in natural gas-rich states such as Pennsylvania and Texas, and also in western North Dakota where gas is produced alongside oil in the Bakken. Oil prices are at a seven-year high, yet drilling is lagging for a number of reasons, including a shortage of frack crews, maintenance-related outages at processing plants and a focus by major producers on developing the Permian Basin of Texas and New Mexico.

Heating bills will jump as much as 54% because of natural gas prices -- With prices surging worldwide for heating oil, natural gas and other fuels, the U.S. government said Wednesday it expects households to see their heating bills jump as much as 54% compared to last winter. Nearly half the homes in the U.S. use natural gas for heat, and they could pay an average $746 this winter, 30% more than a year ago. Those in the Midwest could get particularly pinched, with bills up an estimated 49%, and this could be the most expensive winter for natural-gas heated homes since 2008-09, according to the forecast by the U.S. Energy Information Administration The federal estimate issued Wednesday follows a forecast issued this week by the state's largest utility, We Energies. That analysis assumes "average" winter weather compared with the federal forecast which says the winter will be slightly colder than normal. That analysis done by We Energies "predicts the typical residential customer will pay $25 more a month this winter compared to last year," assuming an average winter weather. That would increase the typical residential customer's bill about 30% from $80 last winter to around $105. "This increase is mainly due to tight supplies as well as a worldwide increase in demand for natural gas," We Energies said in a statement that was released with its analysis. We Energies serves 1.1 million natural gas customers in Wisconsin. "This forecast matches what we sent out on Monday, that we expect the natural gas price spike will impact customer heating bills this winter," We Energies spokesman Brendan Conway said Wednesday. Wisconsin Public Service Corp., which along with We Energies is owned by WEC Energy Group, said the typical residential customer will pay $40 more a month this winter compared to last winter, assuming average weather conditions. m

Kansas natural gas utility nears deal to pass on $100M in cold snap costs to wholesale customers - Kansas’ largest natural gas utility is close to reaching a deal to recoup more than $100 million from large-scale customers that failed to provide enough natural gas during a February cold snap that forced power outages across the Midwest.During the worst of the cold snap, which saw average temperatures in Kansas City fall below 15 degrees for 10 days, natural gas prices shot up to record levels and utilities scrambled to keep customers’ heat on.In some cases, natural gas marketers, companies that use Kansas Gas Service’s distribution system to provide natural gas to wholesale or transportation customers, failed to get enough gas for their customers into the system, meaning KGS had to supply gas or risk running out for its residential customers.State regulations require that KGS assess penalties, but because of the extraordinary cost of natural gas — which rose by 200 times in a matter of days — KGS asked to waive some of those penalties. Late Friday, the utility company, customer advocates, several natural gas marketers and staff of the Kansas Corporation Commission filed a plan with Kansas regulators to assess $105 million in penalties to marketers, which they say reflects just the amount of gas those companies used.In a statement, KGS spokeswoman Dawn Tripp said the utility was “not seeking a windfall recovery” from the storm. The company is trying to recover its own costs without adversely affecting marketers.“With this settlement agreement, residential and commercial customers are not subsidizing transportation customers’ gas costs during Winter Storm Uri,” she said. KGS has requested to pass along about $451 million in excess natural gas and carrying costs from the deep freeze to its residential and small commercial customers over five, seven or 10 years, increasing the average residential customer’s bill by anywhere from about $5 to $11 per month.

The price of oil and gas is the highest since 2014. Here's how that may impact Louisiana - The price of crude oil closed above $80 a barrel Monday, the first time it has hit that mark since 2014. But the rising prices aren't having much of an impact on Louisiana's oil and gas industry.Drillers are still hesitant to spend money on new wells and worried that the price hikes are temporary. The offshore oil industry was stalled after the Biden Administration enacted a moratorium on new leases in January. But U.S. District Judge Terry Doughty of Lafayette issued a preliminary injunction this summer against the federal government, clearing the way for a lease sale to happen in November. There were 34 oil and gas wells on land in north Louisiana and nine offshore wells as of early October, according to a rig count by Baker Hughes, an oil industry service company. By comparison, there were 26 rigs on land and 12 offshore in October 2020. "There’s little evidence yet of upstream investment perking up from a 15-year low," according to a report by energy industry consultancy firm Wood Mackenzie. "The mood will change if prices remain at these higher levels well into 2022 and show signs of sustained recovery."Wood Mackenzie predicts that by 2022 the price of oil per barrel will drop down to $66, so the price spike is temporary. Jim Justiss, the owner of an independent oil and gas drilling company in Jena, is pulling the trigger on a few new oil wells. Justiss said he is somewhat nervous about a big uptick in the price of fuel over the winter because it could be too expensive for consumers and lead to a contraction in the economy."We plan on drilling more wells," said Justiss, CEO of Justiss Oil. "Things don't move as quickly as they once did because a lot of people went out of business or downsized."Justiss Oil shrank from 40 employees to 17 in the past few years as oil prices fell. "We were treading water at $40 a barrel," Justiss said. When prices hit $60 per barrel, the company starting laying out its plans for exploration. Even then, the business didn't get many calls for services or quotes on rigs. "But it seems to have picked up now at $80," he said. Louisiana has a long history of oil and gas drilling so it's a mature market. Higher prices means companies can take more risk and target smaller reservoirs. Service companies in Louisiana continue to file for bankruptcy and employment tied to the industry has remained down. Statewide, mining and logging had 30,000 jobs in August. Of that, 5,700 were tied to oil and gas extraction while the remainder was support businesses. That's up slightly from a record low of 28,100 workers in 2020, but a far cry from 37,200 jobs in August 2019.The last time oil prices hit $100 per barrel, in 2013, there were more than 55,000 oil and gas jobs in Louisiana. Companies are reaping higher profits from the price hikes but not investing back into the field.“It was one thing when the business was run by crazy wildcatters. Now the oil industry is run by MBAs,” Companies are leery right now of making the big investment in drilling new offshore wells, a process that can take as long as four years. “Everybody is secretly holding the line on production,” he said. Ironically, the run up in oil prices could lead to more investment in renewable energy, such as wind or solar power, and alternative fuels, such as nuclear energy. “Those start to look much better on a cost comparison when it all shakes out,”

'Forever Chemicals' raising questions about fracking -The oil and natural gas industry is one of the leading industries in Louisiana in terms of economic impact, taxes paid and people employed. But there is some new information about certain chemicals being used in the fracking process that has some concerned. Most have probably heard of Teflon and Scotch Guard; some even have some waterproof rain gear in their closet. Those products and more are known to have a manmade chemical compound known as PFAS or what's called "forever chemicals." But what many may not know is these chemicals are being used in the fracking process. "We just learned that these are being used recently," said John Pardue, LSU environmental engineering department director. "We don't really have standards written for how much we should allow. We don't have any regulations requiring companies to disclose what they are using or regulations for them to be responsible for cleaning it up many years into the future," said Pardue. Caddo Parish District 12 map on car hood A map of District 12 in Caddo Parish sits on a car hood as residents of Twilight Meadows subdivision talk in the background. So, how powerful are these chemicals? According to a paper by Physicians for Social Responsibility, 8 ounces could contaminate 8 billion gallons of water. So, if a 16- ounce bottle and a half of another one filled with those chemicals leaked into Cross Lake it would contaminate the entire lake. There are scores of fracking operations in North Louisiana. In Caddo Parish Commission District 12 there are close to 10 oil and gas operations that Commissioner Ken Epperson has identified on a map. One is just across the street from the Twilight Meadows subdivision in west Shreveport. Pinewave Energy of Fort Worth runs it. "The chemicals they put down in the ground, we have people on my particular street that use their well water," said Glenn Moore, a resident of the Western Hills subdivision in west Shreveport."I'm on my own well here. The city of Greenwood has water, but when you start talking about if something was to happen. That's what we have to have more information on," said David Cox, a Greenwood resident.

Fracking noise irritating Caddo residents - The search for oil and gas is ever present in the state of Louisiana. In parts of Caddo Parish that search, and the unwanted side effects that go along with drilling and fracking, are becoming more common for some neighborhoods. "I've had to wear earmuffs inside of my house, in my bed to just get a little quiet time," said Pat Sepulvado, a Twilight Meadows subdivision resident who lives off of Jefferson Paige Road in west Shreveport. "When you go to people for help, all they want to tell you is about the rights of the oil companies. What about our rights as citizens and people living in the neighborhood? We have rights too," said Sepulvado. "The gas drilling has increased significantly. ... I've received so many complaints from a number of my citizens," said Ken Epperson, Caddo Commission District 12 commissioner. There are close to 10 drilling sites just in his district that he knows of right now. "At 11 o'clock at night people are sleeping, and from 11 to 4 every other hour it would kick off for like five days in a row," said Cox. This area has seen a lot of drilling in the more rural areas in recent years, because of the Haynesville shale. But much of what is happening in Caddo Parish would hardly be considered rural. For example, a drilling site that started in April of this year was directly across the street from the Twilight Meadows subdivision. "Since they want to come into a populated area now where people are residing, I don't think it's fair that we don't have a say-so in what goes on in our community," said Glenn Moore, a Western Hills subdivision resident. The say-so comes from Baton Rouge. While the Legislature and federal government create the laws and standards, the Louisiana Department of Natural Resources is charged with regulation. "We have had to breathe dust for four months," said Sepulvado. "If it causes your house to vibrate, that's an issue," said Moore. Making it worse, many feel powerless and helpless to get answers. "I called Pinewave Energy and told them the dust was affecting my eyes. I went to a commissioner meeting to complain. I've called the city," said Sepulvado.

Plastic production is a fossil fuel problem -Cancer Alley snakes 85 miles along both banks of the Mississippi, forming a patchwork of sugarcane plantations and petrochemical complexes, the former with a legacy of slavery and soil degradation and the latter with a legacy of spills, explosions, and widespread pollution. As industry has closed in, breathing room has been hard to come by. Many people who live on the industrial fenceline are fearful for their lives. At one fenceline, in Welcome, St. James Parish, Louisiana, I met Sharon Lavigne, who recently won a Goldman Environmental Prize for her environmental justice activism. Lavigne founded a Christian faith–based activist organization, called RISE St. James, in 2018 to stand against a $1.25 billion plastic plant proposed by Chinese chemical company Wanhua. RISE spoke out. The plant was never constructed. Most recently, Lavigne has spoken out against the planned construction of a $9.4 billion plastic and petrochemical complex in Welcome, a predominantly African American community. So far, she and RISE have succeeded in staving off the completion of this latest industrial development—owned by FG LA LLC, a company related to major Taiwanese manufacturing conglomerate Formosa Plastics—to buy up land in St. James Parish, through an assortment of justice-seeking community actions and other campaigns. Formosa Plastics is the world’s fourth-largest producer of petrochemicals and plastic. Earlier this year, United Nations human rights experts called for an end to racism in Cancer Alley, a place where communities of color bear disproportionate risk to industrial hazards. This month, a new report on Formosa Plastics runs through the company’s messy environmental, economic, and legal track records. One of experts’ top recommendations: rescind Formosa’s permits in St. James, Louisiana; get the company out. Some may believe that, in a region already replete with chemicals, stopping Formosa—one plastic plant—would provide only trivial benefits to public health. In reality, such a victory would not only spare the residents of St. James from additional exposure to pollutants but would also be a win in the fight against climate change—another massive crisis we are now facing. Scientists agree we must now wean ourselves off substances that contribute to climate change when extracted, processed, and burned—namely, oil shales, bitumens, tar sands, coal, petroleum, natural gas, and heavy oils—and we must stop continued industrial development.

Shale Oil Production Back Near Pre-Pandemic Levels in U.S. Permian Region - Oil prices above $80 a barrel are once again spurring a revival of shale drilling in America’s biggest oil field, where production is expected to return to pre-pandemic highs within weeks. Only this time, the surge is being driven by private operators, rather than the publicly traded companies that fueled the previous booms. And they see little reason to slow things down.

First Fully Automated Land Rig Drills First Well - Nabors Industries has announced that the world’s first fully automated land drilling rig has reached total depth on its first well, which was for ExxonMobil in the Permian basin.XTO Energy, a subsidiary of ExxonMobil, contracted the rig to drill three horizontal wells on a test pad in Midland County, Texas, as part of its own research and development efforts and commitment to safe, efficient and responsible operations, Nabors highlighted. The first well was drilled to a total measured depth of 19,917 feet, Nabors revealed, adding that the companies do not plan to publish performance data and results.Dubbed PACE®-R801, the rig combines Nabors proprietary Smart Suite of automated drilling software with Canrig® robotics, Nabors outlined. The crew size on the PACE®-R801 is said to be similar to other Nabors rigs, albeit with changed duties. One driller is required to supervise the operations of the rig while others continue to perform essential tasks, such as service, maintenance, inspections and rig moves, Nabors highlighted. The asset has an unmanned rig floor that removes crews from red zone areas and delivers consistent, predictable drilling performance, the company noted.A video of the PACE®-R801 rig in operation can be seen below.“There’s nothing else in the world like the PACE-R801 concept rig,” Anthony Petrello, the chairman, president and chief executive officer of Nabors, said in a company statement.“Its combination of advanced automation, digitalization and robotics represents a trifecta solution for an industry pursuing the highest levels of safety, efficiency and environmental performance in order to attain ESG goals. Thank you to all our employees, partners and stakeholders that helped make this a reality,” he added.“Successfully drilling with the world’s first fully automated land drilling rig marks the culmination of a five-year engineering journey for Nabors. The experience and insights gained from this concept rig will be used to forge the next generation of Nabors technology and to continuously improve the digital, automation and robotics solutions we already have in the field,”

Have truck, will haggle. Unlikely pipeline foe takes on FERC - — The bane of the pipeline industry is hurtling down the interstate at 81 mph behind the wheel of a black Ford Super Duty pickup, haggling over his smartphone with the Federal Energy Regulatory Commission. Meet Nate Laps, a former gas industry land agent who switched sides and now fights for landowners. He may well change how FERC and pipeline builders treat the people who live in the path of major energy projects. Laps, 38, is brawling with two multibillion-dollar natural gas companies — Cheniere Energy Inc. and Spire Inc. — along with FERC itself. Laps has bird-dogged Cheniere’s Midship pipeline through Oklahoma and Spire’s STL pipeline near St. Louis for years on behalf of his landowner clients. It’s no coincidence that both projects are in trouble with FERC for their treatment of landowners. He’s not a lawyer; he doesn’t have a college degree. He confronts the law firms and senior bureaucrats of the FERC pipeline world with a smash-mouth zeal. Sometimes he’s a happy warrior, chuckling over a tactical win. Other times he’s an avenger, brimming with outrage. "They condemn land for pennies on the dollar," he says. "And after they destroy the land, they try to walk away." He bounces his Ford from farm to farm along the pipeline routes with a drone in the flatbed, documenting damage he says inspectors missed and companies tried to conceal. On a recent Saturday, he put 1,000 miles on the Ford F-250. He’s inundated FERC with the drone photos, attached to sharply worded complaints on the letterhead of his three-person company, Central Land Consulting. He skips legalese in favor of words like "fraudulent" and "collusion." He’s even driven equipment out at night under floodlights to dig up debris buried by construction crews next to pipes. And he’s pressing FERC to shut down the pipelines until the companies fix his clients’ land. FERC hasn’t. The pipelines are still pumping gas. But Laps’ efforts appear to be changing how the agency treats landowners, said Carolyn Elefant, a former FERC lawyer who has been working with Laps on Spire and Midship. FERC issued two orders in March that "lit a fire" under the two companies, she said, and it wouldn’t have happened without Laps’ relentless documenting of the damage.

Chevron’s climate plan: Use wind and solar power to drill for oil - Earlier this year, Chevron faced a reckoning when 61 percent of the company’s shareholders backed a nonbinding resolution asking it to cut its emissions. The oil and gas giant had previously announced goals to make its operations less carbon-intensive, but at its annual general meeting in May, shareholders effectively crossed their arms and shook their heads, demanding that the company cut emissions from the use of its products, too. But even after the majority shareholder vote, Chevron is barely budging. On Monday, Chevron announced a new “aspiration” to reduce emissions from its upstream operations to net-zero by 2050, along with a separate target of reducing the carbon intensity of its products by 5 percent by 2028. That mouthful of words means the company plans to keep producing just as much oil as it always has, if not more, but emit less carbon per barrel. Activist shareholders were not impressed with the update. Shareholders voted for Chevron to reduce its so-called “scope 3 emissions,” the carbon released when customers burn its oil and gas in their cars and homes, which makes up about 90 percent of the company’s carbon footprint. The only way for Chevron to meaningfully reduce its scope 3 emissions would be to shift its business to produce different products that don’t emit carbon. Instead, the company is mostly doubling down on oil and gas, but committing to making its production processes cleaner, starting with its “upstream operations” — the industry term for activities associated with exploration and extraction. Chevron’s upstream operations include drilling for oil and natural gas, pumping it out, transporting it via pipeline, and in some cases, converting natural gas into a liquid. Most of the company’s upstream greenhouse gas emissions come from powering heavy machinery or from “flaring,” the practice of burning off excess gases that rise up out of wells. Ironically, Chevron plans to reduce upstream emissions in part by electrifying equipment and powering it with solar and wind farms. Instead of supporting an economy-wide transition to renewable electricity, which would lower emissions in an absolute sense, the plan aims to exploit renewables to produce more fossil fuels, potentially holding total emissions at a steady level. Chevron also plans to incorporate more carbon capture and storage technology into its operations, but the company has a poor track record on that front. Chevron’s Gorgon gas processing plant in Western Australia, which was supposed to be the largest carbon capture and storage project in the world, has so far failed to capture as much carbon as promised. And at the end of the day, none of these plans will make any difference for the climate if Chevron is still producing just as much oil and gas in 2050. Andrew Logan, director of oil and gas programs at Ceres, an investor advocacy group, said in a statement that the commitment was behind the times. “Net zero operational emissions targets are simply table stakes at this point — and a number of Chevron’s U.S. peers like ConocoPhillips made such a commitment some time ago,” he said.

Private Equity Funds Have Invested Billions In Fossil Fuels Since 2010 - These secretive investment companies have pumped billions of dollars into fossil fuel projects, buying up offshore platforms, building new pipelines and extending lifelines to coal power plants.As the oil and gas industry faces upheaval amid global price gyrations and catastrophic climate change, private equity firms — a class of investors with a hyper focus on maximizing profits — have stepped into the fray.Since 2010, the private equity industry has invested at least $1.1 trillion into the energy sector — double the combined market value of three of the world’s largest energy companies, Exxon, Chevron and Royal Dutch Shell — according to new research. The overwhelming majority of those investments was in fossil fuels, according to data from Pitchbook, a company that tracks investment, and a new analysis by the Private Equity Stakeholder Project, a nonprofit that pushes for more disclosure about private equity deals.Only about 12 percent of investment in the energy sector by private equity firms went into renewable power, like solar or wind, since 2010, though those investments have grown at a faster rate, according to Pitchbook data.Private equity investors are taking advantage of an oil industry facing heat from environmental groups, courts, and even their own shareholders to start shifting away from fossil fuels, the major force behind climate change. As a result, many oil companies have begun shedding some of their dirtiest assets, which have oftenended up in the hands of private equity-backed firms.By bottom-fishing for bargain prices — looking to pick up riskier, less desirable assets on the cheap — the buyers are keeping some of the most polluting wells, coal-burning plants and other inefficient properties in operation. That keeps greenhouse gases pumping into the atmosphere.At the same time banks, facing their own pressure to cut back on fossil fuel investments, have started to pull back from financing the industry, elevating the role of private equity.The fossil fuel investments have come at a time when climate experts, as well as the world’s most influential energy organization, the International Energy Agency, say that nations need to more aggressively move away from burning fossil fuels, said Alyssa Giachino of the Private Equity Stakeholder Project.“You see oil majors feeling the heat,” she said. “But private equity is quietly picking up the dregs, perpetuating operations of the least desirable assets.”In its report, the Private Equity Stakeholder Project examined the energy investments made by the top 10 private equity firms since 2010, including giants Blackstone, KKR and Carlyle. The report found that about 80 percent of current holdings are in oil, gas and coal. That was despite many of those firms touting their sustainable investments.Private equity firms have emerged as an increasingly powerful, yet secretive, investment force in recent decades. They typically assemble vast pools of money from wealthy or institutional investors in order to invest directly in companies, often those in distress and unable to raise capital in more traditional ways. Because the firms are required to disclose relatively limited information, it can be difficult to get a full view of their holdings or their climate or environmental practices.

Gretchen Whitmer’s Border War – WSJ --The Democratic Party’s hostility to oil and gas pipelines is now becoming an international problem, as Canada seeks a Biden Administration intervention over Michigan Gov. Gretchen Whitmer’s attempt to shut down Enbridge Energy’s Line 5. Ottawa last week formally invoked the dispute-resolution article of a 1977 treaty governing transit pipelines between the two nations. The treaty states that, except in an emergency, natural disaster or pressing safety concern, “no public authority in the territory of either” the U.S. or Canada may take measures “which are intended to, or which would have the effect of, impeding, diverting, redirecting or interfering with in any way the transmission of hydrocarbon in transit.” Yet Ms. Whitmer is acting like she’s her own sovereign nation. She moved last year to revoke and terminate an easement that allows Line 5 to operate in a 4.5-mile stretch in the Straits of Mackinac and ordered Enbridge to shut down and “permanently decommission” the pipeline within 180 days. Enbridge has defied Ms. Whitmer and continued operations, saying her unilateral actions lack legal authority. The Governor is seeking an injunction to close the pipeline.If Ms. Whitmer prevails, she’ll disrupt a major energy supply chain that moves more than half a million barrels of oil and natural gas liquids a day throughout the Great Lakes region. In an amicus brief filed in federal court in May, Canada said residents of Quebec and Ontario rely on Line 5 to fuel their cars and heat their homes. The Toronto Pearson International Airport depends on it for jet fuel. Line 5 is a critical supplier for the Sarnia-Lambton Petrochemical and Refining Complex in Ontario, which employs more than 4,900 people. If the pipeline shuts down, “up to 400,000 barrels per day of oil originating from western Canada (much of it destined for the United States)” would be stranded, the Canadian government said. “The shutdown would cause massive revenue losses and potentially significant job losses in the energy sector in western Canada, just as it is struggling to recover from the impacts of covid-19,” Canada warned. “Thus, the economic impacts of a shutdown would be immediate and severe both for fuel users in the east and for producers in the west.” Ms. Whitmer said in a statement that she is “profoundly disappointed” in Canada’s invocation of the treaty. “Rather than taking steps to diversify energy supply and ensure resilience, Canada has channeled its efforts into defending an oil company with an abysmal environmental track record,” she said. Canada is seeking a bilateral negotiation, but if that fails the dispute could end up in arbitration. In an email Thursday, a U.S. State Department spokesperson said “we expect that both the U.S. and Canada will engage constructively in those negotiations,” adding that “in addition to being one of our closest allies, Canada remains a key U.S. partner in energy trade as well as efforts to address climate change and protect the environment.”

Michigan tribes to Biden: Enbridge Line 5 threatens our treaty rights - As Canada leans on an international treaty to keep oil flowing through Line 5, Michigan Native American tribal leaders want the Biden administration to acknowledge that the pipeline’s fate affects their treaty rights, too.In a press conference Tuesday, Bay Mills Indian Community President Whitney Gravelle called upon the Biden administration to make “a serious commitment” to uphold the rights of Michigan tribes as the federal government faces increasingly complex diplomatic issues regarding Line 5.Gravelle’s comments come a week after Canadainvoked a 1977 treaty governing cross-border pipelines in an attempt to block Gov. Gretchen Whitmer’s efforts to shut down Line 5, which runs beneath the Straits of Mackinac. Canada argues that the treaty, part of which says that “no public authority” in either the U.S. or Canada can impede the flow of petroleum products through international pipelines, leaves Whitmer powerless to shut down Line 5.Lawyers for the state of Michigan dispute that interpretation, and a University of Michigan legal expert earlier told Bridge Michigan that other language in the 1977 treaty gives Michigan the power to regulate the pipeline.Calling efforts to keep Line 5 open a “direct attack on our sovereignty,” Gravelle argued at a virtual press conference Tuesday that “tribal nations’ treaty rights in this area predate and supersede any of Enbridge’s interests, including any rights the government of Canada or Enbridge may claim.”The Straits and much of Michigan’s landmass are protected by the 1836 Treaty of Washington, in which tribes ceded millions of acres to the U.S. government in exchange for permanent rights to hunt, fish and gather, among other rights. Michigan tribes have argued an oil spill from Line 5 could decimate fish populations, rendering their protected fishing rights meaningless.Enbridge is suing the state in hopes of keeping the pipeline open in response to Whitmer’s shutdown order. In a statement Tuesday, Enbridge spokesman Ryan Duffy said that Enbridge supports the tribes’ treaty rights, but declined to elaborate on whether those rights are germane to the Line 5 dispute.“We support the federal government upholding treaty rights,” Duffy said. “We support the restoration of treaty rights as well as the acknowledgment of historical reservation boundaries.”

The Mackinac Straits Corridor Authority discusses Enbridge Line 5 Pipeline Tunnel - Today, the Mackinac Straits Corridor Authority met with consultants and Michigan residents to consider the Enbridge Line 5 Pipeline Tunnel. If approved, the tunnel will enclose a replacement petroleum pipeline running through the Straits of Mackinac. The authority discussed a proposed tribal consultation policy, responded to a request for an internal investigation and touched on their achieved project milestones. M.S.C.A. and Enbridge officials are pushing forward even though some residents are disappointed with the project. “You cannot dispute these failures and faults in your whole plan,” John Paul, a Michigan resident opposed to the Line 5 Pipeline Tunnel, said. “Educate yourself to the whole story. Minnesota’s being polluted right this very moment, yet they’ll sit there and lie to you about how they’re going to produce documents. You can burn your documents. Actions speak, words lie. Paul is one of many Michigan residents who are unhappy with Enbridge’s plan. One attendee questioned Enbridge’s validity in light of recent misconduct claims. “You have a partner in Enbridge that I don’t think you can trust, and that you need to consider changing the paradigm,” Pat Egan, another Michigan resident unhappy with the Line 5 Tunnel project, said. “They were just fined $3.3 million in a project that they perverted in Northern Minnesota.”

Pipeline companies agree to $8.7 mln deal to settle spill claims -- Buckeye Pipe Line Co and West Shore Pipeline Co have agreed to pay nearly $9 million to settle allegations they violated the Oil Pollution Act and the Clean Water Act in connection with a 2010 oil spill near the city. The companies and state and federal officials on Wednesday agreed to a proposed consent decree in Chicago federal court to resolve claims arising from the December 2010 spill of more than 1,800 barrels of oil into wetlands near Lockport, a suburb of Chicago. The companies were accused of allowing injury to the Hine's emerald dragonfly, an endangered species, among other claims. Houston-based Buckeye and Lemont, Illinois-based West Shore do not admit to the allegations. The agreement is subject to final court approval.Line 257, a 3.5-mile crude-oil pipeline owned by West Shore and operated by Buckeye, leaked oil from an underground breach as it was being pumped from a terminal to a refinery, according to a complaint the Justice Department and the Illinois attorney general filed along with the consent decree.The spill resulted in the loss of more than 100 acres of wetland, the U.S. Army Corps of Engineers said in a statement.A Buckeye spokesperson said the company is pleased to have reached an agreement and "continues to work with the proper agencies and parties to ensure the ongoing ecological restoration of the affected site." Buckeye is represented by Gary Rovner of Foley & Lardner. West Shore did not immediately respond to a request for comment.Larry Starfield, an acting assistant administrator with the Environmental Protection Agency (EPA), said the settlement "marks the culmination of a 10-year project to clean up the spill and prepare the site for restoration activities."

Line 3 did something rare for a pipeline that exports Canadian crude: It got built | CBC News -A phenomenon recently unfolded that represents a rarity in this era of vocal opposition to Canadian fossil-fuel projects.A major pipeline project exporting oil from Canada was just completed and it began operating with relatively little national attention.The Line 3 project attracted much less scrutiny than Keystone XL from American protesters, media and politicians.It didn't even appear to be the top pipeline story in Canada last week — that distinction likely belonged to Line 5, which is escalating as a political irritant between Canada and the U.S.Yet Line 3 was up and running on Oct. 1, adding 370,000 barrels per day in new exports from Alberta to Wisconsin, which is more than half the output the scrapped Keystone XL project was supposed to achieve.As a result, Canadian oil exports to the United States just reached one of their highest-ever weekly volumes, according to the latest U.S. numbers.However, the process of getting the pipeline built through Minnesota illustrated the risks of completing such a project in this era. The project's legacyIts legacy includes an environmental disaster, a controversial arrangement with police, and legal fights and protests that are ongoing. So was it a game-changer — either for Alberta's oil sector or for the climate?An energy economist at the University of Alberta doubts it will have a significant impact on either oilsands investment or on greenhouse gas emissions.Andrew Leach has a new paper out in the Alberta Law Review that suggests we're unlikely to see any brand new oil export pipelines ever built from Canada. This particular project by Alberta-based Enbridge involved changes to a line built in 1968 that had seen its capacity erode over time. The renovation restored that original capacity, installed a slightly wider pipe and altered parts of the route. Leach said the project is unlikely to prompt a flood of new investment in Alberta.

Enbridge, Columbus, and the last tar sands pipeline - By Winona LaDuke - It's somehow fitting irony as Indigenous Day approaches on Oct. 11 — once known by another name — that a new Columbus is about to pump oil through Line 3, the last tar sands pipeline. That is the colonial-like corporation Enbridge.Maybe President Joe Biden will think about this one and stop the dirty oil from burning our rivers and air. The Indian wars could be over. After all, no one needs this pipeline, plus it's the dirtiest and most expensive oil in the world to extract and produce. In one narrative, the Canadian corporation won. Columbus conquered anew, proof that might and money remain the rulers. Then, there's another. That's the Ballad of the Water Protectors — a movement born in the battles in northern Minnesota and North Dakota, a movement that will grow and transform the economy of the future. How do we know this?Well, no one wants to finance more tar sands. Other telling signs, and some new red flags, include:The Canadian oil industry estimated that a lack of pipeline capacity reduced the industry's income by tens of billions of dollars before the pandemic started. The tar sands industry couldn't afford to approve and build new extraction facilities during the curtailment, and now, in part due to the pandemic, it still can't.Uncertainty about Line 3 caused by Indigenous people and water protectors encouraged massive divestment from the tar sands by non-Canadian investors. Everybody from Shell Oil to the Koch brothers bailed out. Last month, my alma mater, Harvard University, began divestment of fossil fuels. Harvard wouldn't even divest from South Africa, those stubborn old dudes. This is, well, monumental.A recent joint report by the Indigenous Environmental Network and Oil Change International, found that Indigenous resistance alone has stopped or delayed greenhouse gas pollution equivalent to at least 25% of annual U.S. and Canadian emissions.As a result of low oil prices, reduced income and divestment, tar sands industry capital expenditures crashed. Almost all its capital spending over the past five years was used for maintenance of existing extraction facilities, not development of new facilities. Put another way, the pipeline opposition campaign stopped the tar sands industry dead in its tracks.We all just recently learned two more blatant things about Enbridge that should give everyone pause — especially our government leaders like Gov. Tim Walz and U.S. Sens. Amy Klobuchar and Tina Smith, whose cowardly silence makes them complicit in this egregious crime.First, after piercing an aquifer in January — an aquifer that is still bleeding 100,000 gallons of water a day — Enbridge covered it up for as long as it could until it was caught and fined $3.3 million by the Department of Natural Resources. This is the kind of people we are dealing with.We also learned the pipeline isn't even adequately insured. The Minnesota Public Utilities Commission required Enbridge to obtain $200 million of "environmental impairment liability" insurance, in addition to general corporate liability coverage of $900 million, and to include the state of Minnesota and several American Indian tribes as additional insureds on its policies. But Enbridge recently submitted a report to the Public Utilities Commission saying it will likely not be able to obtain this insurance "in the near future." This new investigation is likely to expose again into the future what a truly rotten idea the escrow account established by Enbridge and the PUC to militarize the north in the name of defending Line 3 really was. Did we learn something from our whippings?Approaching this day for uplifting Indigenous peoples, here's a suggestion. It's time to end conquest and begin survival. Code Red for the environment means that we need to move away from fossil fuels and to organic agriculture, and to local and efficient energy. Fortunately, tribal nations are leading the way in the north. It's time to quit acting like Columbus.

How the Line 3 Fight Will Continue Against the Completed Pipeline - In September, Enbridge, the Canadian company behind the contested Line 3 project spanning northern Minnesota, announced that tar sands oil would start moving through the pipeline by October 1. However, the Indigenous-led resistance that has fought the pipeline since it was proposed seven years ago doesn’t intend to stop now.On the same day that oil was slated to start moving, Jaike Spotted Wolf joined other Indigenous leaders like Winona LaDuke and Tara Houska on a Zoom call with attorney general Keith Ellison to talk pipeline issues. Photographer Ron Turney presented pictures of cyst-spotted fish to Ellison, which he discovered recently near a pipeline construction site where drilling fluid spilled this summer. Though nontoxic, the fine particles in drilling fluid can negatively impact aquatic life and Enbridge inadvertently released the stuff into wetlands 13 times this summer.Spotted Wolf is a member of the Three Affiliated Tribes (Mandan, Hidatsa, Sahnish) of North Dakota and a leader at Camp Migizi, one of the Indigenous-led resistance camps that cropped up when pipeline construction started. Since January, protestors who call themselves water protectors have traveled there to organize protests, live communally, and learn about decolonization. “The Line 3 fight is very much ingrained in climate protection, but is also about Indigenous sovereignty,” says Spotted Wolf.Camp Migizi was established on nine wooded acres within the Fond du Lac reservation, right next to a Line 3 construction site. During the summer, flood lights and heavy machinery operated through the night, a continual reminder to those sleeping in tents scattered around the property. “It was just constantly get up and go fight the pipeline,” says Spotted Wolf, who arrived in May. The pipeline replaces Enbridge’s old eroding Line 3, built in the 1950s and infamous for spilling 1.7 million gallons of crude oil near Grand Rapids in 1991. The new pipeline will have twice the operating capacity, upping the flow to 760,000 barrels carried from Alberta, Canada to Superior, Wisconsin and across treaty lands every day.Some projections estimate the pipeline will produce more greenhouse gases annually than Minnesota's total emissions across every sector. Like other nearby tribal nations, the Fond du Lac Band opposed Enbridge's pipeline replacement proposal. Eventually, Minnesota’s Public Utilities Commission presented Fond du Lac with the choice between having the old Line 3 removed from the reservation and the replacement laid in its place or for the replacement pipeline to run just south of the reservation in treaty territory where tribal members hunt, fish and gather. "All remaining options threaten the environment for all and livelihood of the Indigenous people of Minnesota," said tribal council Chair Kevin Dupuis Sr. at the time.

As Tar Sands Flow Through Line 3, Water Protectors Fight Trumped-Up Felonies -- After nearly seven years of resistance from Indigenous communities and allied climate activists, Canadian tar sands began flowing through Alberta-based Enbridge Energy’s Line 3 pipeline this month. Native Anishinaabe leaders have nevertheless vowed to continue their struggle against the pipeline, a 1,097-mile, 36-inch diameter expansion and replacement to a 1960s-era line now bringing nearly 1 million barrels of tar sands per day from Edmonton, Canada, to Superior, Wisconsin.The fight is shifting to Washington, D.C., this week as Indigenous communities and climate activists escalate pressure on the Biden administration to declare a climate emergency, stop all new fossil fuel projects, and crack down on existing production and extraction, including Line 3 and the Dakota Access Pipeline, during the “People vs. Fossil Fuels” mobilization. More than 500 Indigenous leaders and climate activists marched from Freedom Plaza to the White House on Monday, where at least 135 were arrested and blasted with sound weaponry after sitting-in at the White House fence.On Tuesday, Native leaders delivered nearly 1 million petitions to the U.S. Army Corps of Engineers North Atlantic Division Office demanding Line 3 receive a full Environmental Impact Statement. Two Water Protectors climbed a flagpole outside the office and replaced its U.S. flag with a flag reading, “Consultation is not consent.” Native leaders willcontinue to risk arrest in D.C. throughout the week to call out President Joe Biden’s failure to stop the pipeline and respect Indigenous treaty rights.But one Water Protector from Minnesota who planned on attending this week’s events in D.C. is being forced to stay behind: Scout is one of more than 80 people facing at least 90 felony-level charges, with all but one stemming from protests against the pipeline over the course of the summer, according to the Line 3 legal support collective Pipeline Legal Action Network (PLAN). Scout, who asked to be identified with a pseudonym because of the legally sensitive nature of his case, is forbidden from traveling across state lines under the conditions of his release from a Northern Minnesota jail in June.Scout told Truthout that his charges may escalate even further, as the prosecuting attorney may seek to up his charge from felony second-degree assault to three charges of felony first-degree assault. The current second-degree charge stems from an alleged incident in July in which Scout allegedly drove through an Enbridge work site while scouting for drilling fluid spills called “frac outs” and sites where the company was actively drilling underneath water bodies. There at the work site, on a small dirt road, he says three Enbridge employees are alleging he swerved at them from behind the wheel of his SUV as they sat in two separate trucks. This, Scout says, simply never happened. About 20 minutes later, after he allegedly left the work site, he was pulled over by a sheriff’s deputy, who took down his driver’s license and insurance information but soon let him go.

Indigenous climate activists demand Biden end fossil fuel projects - The Washington Post - Casey Camp-Horinek, a tribal elder from White Eagle, Okla., and environmental ambassador for the Ponca Nation, marched in the front of a crowd of hundreds headed toward the White House on Monday and held up her fist.The 73-year-old — wearing a hat that said “Pipeline Fighter” — was among the leaders and members of Native American tribes from across the country who came to Washington for five days of protests that began Monday.The rallies are part of People vs. Fossil Fuels demonstrations by a coalition of groups known as Build Back Fossil Free, which is demanding that the Biden administration take more extreme actions to curb carbon-producing fossil fuel projects at a time when scientists say the world needs to sharply cut greenhouse gas emissions. The coalition’s name is a nod to President Biden’s “Build Back Better” agenda.“We are going to put our bodies on the line there. If we have to be arrested in order to call attention to what the crisis is and that we need a climate emergency declared, we’ll do that,” Camp-Horinek said. “There’s been 500 years of people coming into a territory where all things were interdependent and functioning to a time of crisis, where even Biden’s great-grandchildren won’t survive if something doesn’t change.”At times, tensions rose between protesters and police outside the White House, but the demonstration was largely peaceful. People sang, danced and prayed, holding signs that said, “Water is alive,” alongside cardboard cutouts of fish and birds on Pennsylvania Avenue.U.S. Park Police warned the demonstrators three times that they would risk being arrested if they did not disperse. Most of them moved into Lafayette Square, but about 156 remained, Sgt. Roselyn Norment, a U.S. Park Police spokesperson, said in a statement. Police escorted those protesters to a nearby tent. They were issued citations for obstructing traffic and then released, Norment wrote.

Line 3 opponents deliver letter to White House - A group of Indigenous and environmental organizations based in Minnesota and nationwide delivered a letter to the White House Tuesday urging President Joe Biden to take action on Enbridge’s Line 3 oil pipeline.The 337-mile Line 3 pipeline began carrying oil on Oct. 1. The letter from pipeline opponents comes the day after more than 100 people received citations for blocking traffic during a rally outside the White House as part of the weeklong “People vs. Fossil Fuels” campaign.Local letter signers include Honor the Earth, MN350, TakeAction Minnesota and CAIR-Minnesota. Cleaning product company Seventh Generation, Earthjustice and Indigenous Environmental Network also signed on.“You have declared a code red climate emergency, stating that ‘the nation and the world are in peril.’ We agree,” the letter to Biden says. “It is past time to act in accordance with your declaration.”Pipeline opponents are pushing for the U.S. Army Corps of Engineers — which issued a key permit for the project — to conduct its own environmental review, and to halt operation of the pipeline in the meantime.Opponents say the federal agency didn’t adequately consider the potential effects of leaks and the project’s effects on climate change; the U.S. Army Corps has argued its approval was the product of a yearslong process that met all review requirements.

Indigenous Leaders Among the 136 Arrested at White House Fossil Fuel Protest - On October 11, Indigenous People’s Day, 136 people, including many Indigenous leaders opposing fossil fuel projects, were arrested in front of the White House in Washington, D.C., while calling on President Biden to declare a climate emergency and to stop approving fossil fuel projects. The day marked the first in a five-day-long series of protests in the nation’s capitol organized by the Build Back Fossil Free coalition, which is made up of numerous environmental and social justice advocacy groups. Over the course of five days, thousands are expected to bring the message to Biden’s door that he must do more to protect the planet, and many demonstrators are coming prepared to participate in acts of civil disobedience, to make sure the President hears their message before next month’s COP26 climate summit in Glasgow, Scotland. These demonstrations, labeled People vs. Fossil Fuels, are being billed as a test for Biden. Pressure on Biden has been rising since he failed to acknowledge vocal, Indigenous-led protests to the Line 3 tar sands oil pipeline, which went online October 1 in Minnesota. As DeSmog recently reported, Indigenous peoples in North America have helped block at least eight major fossil fuel projects, from oil pipelines to LNG export terminals, keeping enormous volumes of carbon pollution out of the atmosphere. This morning, a few hundred activists marched from Freedom Square to the White House where Indigenous leaders spoke, mostly addressing President Biden, whom they called on to honor his campaign promises to protect the planet. “We are going to put our bodies on the line there. If we have to be arrested in order to call attention to what the crisis is and that we need a climate emergency declared, we’ll do that,” said Casey Camp Horinek, long-time activist and tribal elder and environmental ambassador for Ponca Nation, located in what’s now Oklahoma. “There’s been 500 years of people coming into a territory where all things were interdependent and functioning to a time of crisis, where even Biden’s great-grandchildren won’t survive if something doesn’t change.” “Joe Biden, you have been making false promises. You stopped Keystone XL — what about DAPL, Line 5, MVP?” Joye Braun, a member of the Cheyenne River Sioux and a national pipeline campaign organizer with the Indigenous Environmental Network, said following Horinek. “Biden has turned a fork tongue, and he needs to be held accountable to the promises he made to Indigenous nations when we helped elect him.” She added, “This is indigenous land. Indigenous peoples will be here for thousands of years. Biden, can you hear us now?” Both Horinek and Braun were among those arrested during a sit-in at the White House fence.

Northern Buys Stakes Across 400 Producing Wellbores - Northern Oil and Gas, Inc has announced that it has entered into a definitive agreement to buy non-operated interests across over 400 producing wellbores for $154 million in cash, subject to typical closing adjustments. The wellbores are located primarily in Williams, McKenzie, Mountrail and Dunn Counties, ND, the company revealed, adding that it expects to fund the acquisition with cash on hand, operating free cash flow and borrowings under its revolving credit facility. The effective date for the transaction is October 1 and Northern anticipates closing the deal within 40 days. October production on the assets is expected to be greater than 4,500 barrels of oil equivalent per day and average more than 4,100 barrels of oil equivalent per day in 2022. The assets, which are operated by multiple operators, include 65.9 net producing wells. Back in June, Northern Oil and Gas announced that it had entered into three definitive agreements to acquire non-operated interests across approximately 2,900 net acres located in the heart of Reeves County, Texas, and Lea and Eddy Counties, New Mexico, for a combined purchase price of $102.2 million. In April, the company revealed that that it had closed its previously announced acquisition of properties owned by Reliance Marcellus, LLC. When this deal was first announced in February, it was described as a transformational acquisition in the Marcellus shale.

North Dakota oil production sees slight uptick in August -New data shows that North Dakota's oil production rose slightly in August but didn't stray far from the level at which it seems to have plateaued this year. The state's oil output in August was 1.107 million barrels per day, a 2.8% increase over July production, according to figures released Wednesday by the North Dakota Oil and Gas Division. Production figures calculated by the state lag several months. Oil production this year hasn't strayed far from 1.1 million barrels per day as the industry slowly recovers from the coronavirus pandemic, which sent oil prices plummeting in 2020. Natural gas production increased to 2.96 billion cubic feet per day in August, also a 2.8% increase. Companies captured 92% of gas produced statewide, meeting the state's 91% target in place to reduce the amount of gas wastefully burned off in flares at well sites.

In this L.A. neighborhood surrounded by oil refineries, residents grapple with health issues— Magali Sanchez-Hall, 51, who's lived near Interstate 110 in the Wilmington neighborhood of Los Angeles for more than two decades, is used to the smell of rotting eggs wafting from the hundreds of oil wells operating in the neighborhood. She's used to her neighbors describing chronic coughs, skin rashes and cancer diagnoses, and to the asthma that affects her own family, who live only 1,500 feet from a refinery. "When people are getting sick with cancer or having asthma, they might think it's normal or blame genetics," she said. "We don't often look at the environment we're in and think — the chemicals we're breathing are the cause." Wilmington, a predominantly working-class and Latino immigrant community of more than 50,000 people, has some of the highest rates of asthma and cancer in the state, according to a report by the non-profit Communities for a Better Environment. It's surrounded by six oil refineries and wedged in by several freeways and the ports of L.A. and Long Beach. California, the seventh-largest oil-producing state in the U.S., has no rule or standard for the distance that active oil wells need to be from communities. For many Californians, especially Black and brown residents, acrid smells, noise and dirt from oil production is part of the neighborhood. At night, the sky is lit orange from refinery flares. In L.A. County, the industry employs about 37,000 people, according to a report by Capitol Matrix Consulting. More than 2 million California residents live within 2,500 feet of an operational oil and gas well and another 5 million — 14% of the state's population — are within 1 mile, according to an analysis by the non-profit FracTracker Alliance. Residents are especially vulnerable in L.A. County, which is home to the Inglewood Oil Field. The 1,000-acre site is one of the largest urban oil fields in the country. More than half a million people live within a quarter mile of active wells that release hazardous air pollutants like benzene, hydrogen sulfide, particulate matter and formaldehyde. Sanchez-Hall didn't understand the link between the nearby refineries and the health issues in her community until she left. She graduated college and pursued a masters degree at UCLA, where she took environmental law classes, and now advocates for clean air and energy in her neighborhood. "Now I understood why people were dying of cancer around me. We're not disposable people. There is a huge disadvantage because many of us don't know what's happening."

California’s Dirty Little Secret: Oil Wells in the Backyard -- As a child, Ashley Hernandez remembers pretending that the oil pumpjacks that loomed over her neighborhood were dinosaurs. The strange metal animals pecked rhythmically at the earth, sandwiched between homes, next to playgrounds, in the parking lots of grocery stores, sucking the oil from the sediments beneath her neighborhood of Wilmington in southern Los Angeles. Hernandez also remembers the nosebleeds. She would get them at night, and they were intense — not a trickle of blood, but so heavy that her mom would often tell her to try not to bleed through her pillows. The nosebleeds weren’t the only thing. Kids and teachers at her school would get cancer diagnoses — a lot. She remembers being scared of the noise that was made by the strange device that her mom would use at night — a nebulizer, to treat her asthma. Adults would tell her not to drink the tap water. And there were periodic warnings to stay inside because of explosions at nearby refineries. It wasn’t until she was in high school that Hernandez started to learn about the possible connections between the nosebleeds, the cancer, the asthma, the undrinkable water, and the oil. Despite California’s reputation as an environmentally friendly state, neighborhood drilling is a distinctly Californian phenomenon. Wilmington and the neighboring community of Carson are home to five oil refineries, as well as the Wilmington Oil Field — the third-most productive patch in the United States. More than 3,400 onshore wells have been drilled in the field since oil was first discovered there in 1932; today, the site pumps out 46,000 barrels per day from 1,550 active wells. Wilmington is also home to more than 50,000 residents, more than 90 percent of whom are people of color. Due to the impact of the oil and gas drilling and refining, census tracts in Wilmington are exposed to more pollution than 80 to 90 percent of the state of California. Meanwhile, predominantly white Palos Verdes — some 12 miles west of Wilmington, on the other side of Interstate 110 — is exposed to less pollution than 85 percent of the state. Hernandez herself grew up only 600 feet from a drilling site run by a subsidiary of Warren Resources. The site has 90 active oil wells that operate 24 hours a day. The wells are loud and emit noxious odors — sometimes the smells evoke rotten eggs, she explained, other times they’re sickly sweet. “A lot of our experiences on the front line are a physical attack on our body,” said Hernandez. Hernandez is one of millions of Californians affected by neighborhood drilling — the practice of exploring for oil right in the middle of communities, next to the places where people live, study, and seek medical care. The phenomenon disproportionately impacts low-income communities and communities of color, and creates an environmental health nightmare for those living in its shadow.

Unified Command responds to oil spill in San Diego, Orange counties – Authorities continued to respond to coastal oil spills in Orange County and San Diego County on Saturday as officials said the offshore recovery team had not seen floating oil in the water for three consecutive days. .. The leak was reported on the morning of October 2, a few miles off the coast of Huntington Beach, but some boaters reported that the water smelled something on Friday. The evaluation team was scheduled to check these locations in San Diego County for visible signs of oil. The beach at Encinitas remained open on Saturday, despite reports of tar balls being washed ashore. Unified Command said on Saturday that civilians could encounter tarballs when visiting the beaches of San Diego. “Oil contains dangerous chemicals and for safety reasons, do not handle tar balls or oil,” the command warned. “If a beach enthusiast encounters tarball, we recommend sending an email to tarballreports@wildlife.ca.gov,” the group said. “If it gets on your skin, wash it with soap and water or baby oil. Avoid using solvents, gasoline, kerosene, diesel fuel, or similar products on your skin.” More than 1,300 people are working on it, with a total of 5,544 gallons of crude oil being recovered by the vessel and 13.5 barrels of tarball being recovered on Friday. Approximately 232,500 pounds of oily debris was recovered from the coastline, three flights were scheduled for Saturday, and an 11,400-foot containment boom was strategically deployed. In Carlsbad, one of San Diego County’s largest sources of locally produced drinking water was carefully monitoring the potential impact of oil spills on the region. The Carlsbad Desalination Plant supplies 10% of San Diego County’s drinking water and produces 50 million gallons of desalination per day. As of Friday morning, Sachin Chawla, president of Poseidon Resources Channelside, said there were no signs of oil near the plant. Authorities are aware that tarballs have been washed away on the beaches of North County, Chaura said. But he said they were not a threat to the plants.

California pipeline likely damaged up to a year before spill - (AP) — An underwater oil pipeline off the Southern California coast was likely damaged by a ship’s anchor several months to a year before it ruptured and sent oil spewing into the ocean and then onto some of the area’s best-known beaches, investigators said Friday. Coast Guard Capt. Jason Neubauer, chief of the office of investigations and analysis, said after the first strike it’s possible other ships’ anchors subsequently struck the steel pipe that brings oil to shore from three platforms out at sea. Investigators previously said a large section of the pipe was bowed after being struck and dragged along the seabed. It remains unknown when the slender, 13-inch (33-centimeter) crack began leaking oil, and investigators will pour over a year of data on ship movements near the area of the break. No ships have been identified as suspects at this point.“We’re going to be looking at every vessel movement over that pipeline, and every close encroachment from the anchorages for the entire course of the year,” Neubauer said.The accident scene is outside the Long Beach-Los Angeles port complex that is the largest in the country and handles some 4,000 vessels a year. Many of them are from overseas and that could complicate the process of boarding ships of interest in the investigation to get information. The disclosure that the damage to the pipe could have occurred so long ago dramatically reshaped what was known about the leak that sent tens of thousands of gallons of crude into the Pacific. A search that initially appeared to focus on the hunt for one vessel now could send investigators to ports around the country to inspect many ships. It now appears many factors played a role in the pipe’s failure – possible repeated anchor strikes, stresses from being dragged along the seafloor and the corrosive forces of seawater.

U.S. Coast Guard monitoring San Diego coastline for signs of oil spill More than a week after an undersea pipeline leaked thousands of gallons of crude oil into the ocean, the beaches of Huntington Beach reopened Monday after water quality testing has shown no detectable amounts of oil toxins in the water. News 8 rode along Monday with the U.S. Coast Guard on one of their daily oversight missions in an MH-60 Jayhawk helicopter as they continued to monitor the San Diego coastline for any signs of oil spill remnants drifting south to our area. “We’re looking for areas of interest where oil may be congregating together,” said Commander Seth Parker of the U.S. Coast Guard. They’ve been monitoring closely for over a week since the oil spill was discovered in Orange County. Since last Thursday, they’ve had five shoreline assessment teams staged throughout San Diego County, ready to respond to any reports of oil slicks in the area. “Over the last four days, I would say we have not seen any on-water sheening,” said Parker. “That’s a tribute to all the response efforts.” As for San Diego county, they’re seeing about three tar balls per mile of beachline, which they say is minimal. “We’ve noticed very, very light,” said Parker. “Not really much more than what naturally occurs on the San Diego beaches.” If anyone sees tar balls wash up onshore, the Coast Guard is advising people not to touch them, but to report them instead by notifying Unified Command with an email message at tarballreports@wildlife.ca.gov. “It’s a petroleum-based product,” said Parker. “It’s a very hazardous substance that could irritate the skin and really cause a lot more damage to yourself and to the environment if handled without proper protective equipment.” All in all, our San Diego coastline has seen minimal impact so far, and Commander Seth Parker hopes it stays that way. “All the recovery efforts have been very successful to date and we’ve had very minimal impact,” said Parker.

New details emerge of attempted cover-up in investigation of Southern California oil spill - The investigation into the October 1 oil spill off of the coast of Southern California is now in its second week while cleanup efforts are still only in their earliest stages. Booms used to control the ingress of the oil slick into sensitive wetlands have mostly failed, putting many species of migratory birds and other wildlife at risk. According to official estimates, the spill led to up to 131,000 gallons of oil seeping into the Pacific Ocean. Oil has been spotted from the port city of Long Beach just south of Los Angeles all the way down to San Diego. Investigators now believe a ship’s anchor struck a portion of the 18-mile pipeline from where the spill originated, displacing it by 105 feet and ripping off a portion of the pipeline’s concrete casing. While this event by itself likely happened weeks and even months before the pipeline ruptured, it led to that section being dangerously exposed to future natural or manmade events ultimately leading to the 13-inch rupture last Friday causing the spill. However, the total length of the displaced pipeline was nearly 4,000 feet leading to questions about why the pipeline operators either never noticed or reported the issue.The pipeline ends at the BETA pump station in Long Beach and originates at the Elly oil rig owned by Amplify Energy Corporation. Based out of Houston, Texas, Amplify Energy owns approximately 1,000 oil wells and 1,500 natural gas wells across the US. The Beta Offshore company has been cited a total of 125 times for safety and environmental violations over the course of the last 40 years but has only paid a total of $85,000 in fines involving three particular safety incidents. Inspections of the sites, moreover, are typically carried out by third party outfits contracted by Amplify itself.Establishing a timeline of events around last week’s spill, investigators found that a low-pressure alarm went off on the Elly oil rig at 2:30 a.m. on Saturday morning, October 2. At 8:55 a.m. the same day, an employee at a firm used by Amplify Energy for crisis management reported an oil spill to federal authorities with the Office of Emergency Services.However, multiple reports of foul-smelling air had been made by residents of coastal Orange County the previous day and the first report of a spill did not originate from the rig operators but from a ship that reported a large oil slick on the surface of the water 4.5 nautical miles west of Huntington Beach at 6 p.m. on Friday.That same evening, satellite imagery which was used to further examine the spill showed a total surface area for the spill of 2.8 by 0.7 nautical miles. An emergency response command center comprised of federal and state environment authorities was then formed to investigate. However, it was already after dark by that time, hampering further investigations until the following morning.Richard Charter, a senior fellow for the Ocean Foundation, said to the Los Angeles Times of the timing of the response, “You don’t have pressure drop in a pipeline and not know about it. And that raises the question, ‘Why did the response kick in a day late?’ Somebody did nothing. You shouldn’t have to wait until the oil’s lapping up on the shoreline to find out that you’ve had an oil spill.”

Southern California oil spill now being investigated by state Department of Justice – California’s Department of Justice has launched an investigation into what caused the oil spill off the coast of Huntington Beach, with both civil and criminal charges possible, Attorney General Rob Bonta announced during a press conference Monday with U.S. Sen. Alex Padilla. “We are working in coordination with federal, state and local authorities to determine the cause of spill and what if anything could have been done to prevent or minimize this disaster,” Bonta said as he stood just off the sand of Huntington State Beach, with the outline of the oil platform connected to the damaged pipeline barely visible offshore through the afternoon haze. “If our laws were violated, we will hold those responsible accountable.” The news came the same day Huntington Beach reopened to visitors for the first time since a pipeline spill dumped up to 131,000 gallons of oil in the ocean off Orange County on Oct. 1 and 2, killing wildlife and hurting area businesses. City officials said Sunday that water quality tests showed “non-detectable” amounts of oil-associated toxins in ocean water. Padilla and Bonta said they were encouraged by what they saw during a flyover of the spil

Democrats Begin Scrutiny of Abandoned Offshore Oil Equipment - House Democrats began Thursday making the case for stricter regulation of thousands of abandoned wells, platforms and pipelines off the U.S. coasts following one of the biggest off-shore spills in California in nearly 30 years. A hearing by a sub panel of the House Natural Resources Committee comes as anger over oil fouling Huntington Beach has renewed demands for offshore oil drilling bans and led to bills mandating expensive leak detection equipment and new spill reporting requirements. “Stronger federal regulation of this offshore infrastructure is essential to reduce future spills and other impacts and protect taxpayers from shouldering the cleanup costs,” said Representative Alan Lowenthal, a California Democrat who chairs the Subcommittee on Energy and Mineral Resources. It’s also leading to fresh scrutiny of aging offshore oil and gas infrastructure. Of 55,000 oil and gas wells drilled in federal waters off the U.S. coast, 59% or roughly 32,000, have been abandoned, according to prepared testimony by Donald F. Boesch, a University of Maryland Center for Environmental Science professor. In addition, 18,000 miles (29,000 kilometers) of decommissioned pipelines snake the ocean floor in the Gulf of Mexico “and we do not know where all of them are or the companies that put them in place,” Boesch said in his written testimony. One such pipeline, a 12-inch pipeline that still held oil, was damaged earlier this fall by Hurricane Ida, and created a miles long oil spill off the coast of Louisiana. “Leaving oil and gas infrastructure in place can be a ticking time bomb, with the potential for damage from storms, accidents and corrosion all leading to more costly decommissioning efforts,” said Rob Schuwerk, North American executive director of the Carbon Tracker Initiative, an independent financial think tank. Committee Republicans, for their part, asserted that the benefits of offshore oil and gas production include domestic energy security, jobs and federal revenue. And used the hearing as a chance to blast President Joe Biden for rising gasoline prices. “Joe Biden seems hell bent on creating his own energy crisis,” Representative Pete Stauber, a Minnesota Republican, said during the hearing. Decommissioning offshore oil and gas infrastructure could cost the industry as much as $50 billion, Schuwerk said in his written testimony, citing estimates from the Interior Department’s Bureau of Safety and Environmental Enforcement. While Interior Department rules require the removal of offshore oil and gas equipment, companies have been able to avoid permanently plugging old wells and federal rules do not require companies to provide adequate bonds to cover full decommissioning costs, according to committee Democrats.

What happens after an oil spill? -Marine oil spills have plagued the fossil fuels industry since the introduction of offshore extraction and transport. The current spill in Southern California is just the latest episode.Before touching upon the actions of spilled oil on impacted ecosystems, it is important to review its fate. First, oil is a mixture of both large and small carbon compounds; larger ones form relatively inert tar while the smaller ones tend to be more mobile. We also know that while oil and water do not mix, they do interact — immediately upon release oil begins to spread, disperse and evaporate; it also simultaneously degrades via the actions of both sunlight and bacteria. Thus, an oil spill breaks into smaller and smaller patches until it completely disperses. Toxic impacts to marine organisms may be most apparent near the point of release as the oil is most concentrated, and over time impacted ecosystems recover as it dissipates. This process, known as “weathering,” can be assisted by response techniques such as the use of booms, skimmers and detergent-based dispersants. However, ultimately it is the environment that “cleans up” a spill. Upon release, oil coats the organisms it comes in contact with. With birds and mammals, it can mat fur and feathers such that they no longer efficiently trap air. This results in a loss of both insulation and buoyancy, and often results in death due to hypothermia. Both birds and mammals may attempt to remove the oil through preening. However, the ingested oil can cause both vomiting and neurological effects in the short term, and tumor formation over time. Again, death is often the end result.Other marine organisms can also be significantly impacted by spilled oil. Plankton and algae, at the base of the marine food web, are often heavily impacted due to coating. Most invertebrates, such as clams and mussels, as well as fishes rely on external fertilization for reproduction. Thus, their reproductive cells and larvae are also directly subject to the toxicity of oil. In fact, they tend to be much more sensitive than adults and can be heavily impacted (thus they are referred to as “sensitive life stages”). This can result in reproductive failure and ultimately population declines that may last for years.Both invertebrates and fishes also take up the smaller carbon compounds by way of both ingestion and respiration (via their gills). Similar to birds and mammals this can lead to neurological effects and tumor formation over time. However, they are also capable of excreting residues. Thus, once an oil spill dissipates their tissue concentrations also tend to decline. This is important when considering seafood species and human consumption, and tissue levels are usually monitored over time to determine when they are again safe to eat.Humans are primarily affected by spilled oil in two ways: inhalation and skin contact. As mentioned above, the smaller carbon compounds which tend to be most toxic usually evaporate quickly. If inhaled, they can cause lung irritation, nausea and vomiting; if exposure persists over time, cancer risk may be elevated. Skin contact, usually from tar that washes ashore, can cause irritation and rash.Over time ecosystems can recover, as spilled oil dissipates and decimated populations recover. Bear in mind that petroleum has been present in our environment for millions of years via seeps and pools, a good example being the La Brea Tar Pits near Los Angeles, Calif.. The discovery of seeps likely led to the first use of oil by humans. It is possible that in areas rich in oil from natural seeps, such as the Gulf of Mexico and the Santa Barbara Channel, bacteria have evolved the capability of not only degrading oil but using it as an energy source. Otherwise, it would likely have accumulated over time. Thus, the good news is the environment is resilient and capable of recovering after a spill, though it may take time.

Report released on the Alaska LNG Project - In a new report, the Alaska Gasline Development Corporation (AGDC) detailed the significant environmental and climate benefits achieved by developing the Alaska LNG Project, which will utilise North Slope natural gas to replace high-emissions coal in heavily polluted Asian markets and substantially reduce global greenhouse gas emissions. Alaska Governor Mike Dunleavy said, “Alaska has some of the world’s strictest environmental laws, and Alaska natural gas should be a key component of any realistic energy roadmap to a cleaner climate. This report documents the substantial climate benefits that clean-burning Alaska natural gas has for our environment here at home and around the world.” AGDC President Frank Richards added, “The world is increasingly focused on the climate impact of new high-volume, reliable energy projects. This timely assessment uses respected and transparent methodologies to quantify the value of replacing high-emissions energy sources in foreign markets with low-emissions Alaska LNG. The justification for Alaska LNG is compelling.” The report, Greenhouse Gas Lifecycle Assessment: Alaska LNG Project, documents how Alaska LNG reduces annual carbon dioxide equivalent emissions generated by a representative Asian regional coal supply chain by 77 million t, a 50% reduction. According to data from the US Environmental Protection Agency, eliminating 77 million t of carbon emissions is the annual equivalent of taking 19 coal-fired power plants offline or 16.8 million passenger cars off the road for a year, or eliminating the emissions generated by powering 9.3 million homes or the emissions from burning 8.7 billion gal. of gasoline. The report also compares Alaska LNG emissions to equivalent LNG projects in Louisiana and Australia that have undergone similar lifecycle analyses, and documents that the production and delivery of Alaska LNG provides 50% lower greenhouse gas intensity compared to these projects. Alaska LNG’s relative emissions efficiencies reflect Alaska’s close proximity to target Asian markets, which reduce round-trip shipping times by about a month, efficiencies resulting from shared facilities for North Slope oil production, the utilisation of a single pipeline and compressor system, and fewer gathering and boosting emissions required by the North Slope’s compact production footprint.

LNG Canada Construction Hits Halfway Point - Construction on the first phase of the Royal Dutch Shell plc-led liquefied natural gas (LNG) export facility in British Columbia, known as LNG Canada, has hit the halfway point, with activity to accelerate in the coming months. In a notice posted on the LNG Canada website Wednesday, management said the project had “just surpassed the 50% completion mark,” adding things were “moving swiftly” toward commissioning and start-up.Management also noted the project has been able to reach major milestones “safely and on schedule” despite the Covid-19 pandemic. Those milestones include raising the roof on its LNG tank and the arrival of its main cryogenic heat exchanger and two precooler units.Looking ahead, the first liquefaction module is expected to arrive on-site in the next six-to-12 months, staff said in a video. “It’s going to be fast and furious from then on,” senior contract manager Spenser Heard said in the video.The first phase comprises two trains capable of producing 14 million tons/year combined. A second phase, which has not been sanctioned, could expand the facility by two additional trains.The project is expected to ship its first cargo around the middle of the decade.The LNG Canada consortium has recently been involved in a dispute with Canadian pipeline giant TC Energy Corp. over increased costs and delays on the TC-led Coastal GasLink system, which would supply feed gas to the facility. In August, TC Executive Vice President Tracy Robinson said discussions with LNG Canada were continuing. During the 2Q2021 earnings call, she said TC and its Coastal GasLink partners were focused on commercial conversations “as a mechanism” to resolve the disagreement. Around the same time, LNG Canada President Peter Zebedee said progress on Coastal GasLink was encouraging, but the consortium remained “concerned” about the increased cost estimates and schedule delay.Shell holds a 40% interest in LNG Canada. Its partners are Malaysia’s Petroliam Nasional Berhad, aka Petronas, with 25%, PetroChina Co. Ltd. and Japan’s Mitsubishi Corp. with 15% each, and Korea Gas Corp. with 5%.

Gasoline Suspected in Water Supply of Canada’s Northernmost Capital --Canada's northernmost capital has declared a local state of emergency because of suspected gasoline contamination in the water supply. Residents of Iqaluit, the capital of the Arctic territory of Nunavut, have been warned not to drink, boil or cook with the city's water. "Due to the possibility of petroleum hydrocarbons at the Iqaluit water treatment plant, the Department of Health is advising Iqalummiut not to consume tap water for drinking or cooking, until further notice," the territory's government wrote in a public health advisory published Tuesday. https://t.co/3hdvDvzWfl An investigation into the city's water supply began late last week, when residents complained that their tap water smelled like gasoline, The Guardian reported. At first, tests suggested the water was safe. But a more recent test conducted in Ottawa turned up evidence of microbes in the water. In a city council meeting Tuesday evening, chief administrative officer Amy Elgersma also said that staff had located "concentrated odors" in the city's water treatment plant, CBC News reported."We suspect there is some type of petroleum product that has entered the water system," Elgersma said at the meeting.Samples from the treatment plant have been sent in for testing, and results should be due in five business days. The health advisory said that the city's tap water could be used for laundry, cleaning and showers. However, pregnant women, newborns and infants should not bathe in the water, and it should not be added to infant formulae. Iqaluit Mayor Kenny Bell further warned that all residents were impacted, no matter how they received their water."It's everything. Any treated water," Bell told Nunatsiaq News.This means the city's more than 7,000 residents will all need alternative water sources, CBC News noted.This is occurring in a remote area where food and bottled water costs are extremely high, The Guardian reported. A liter bottle of water costs around $7.25 and a pack of a dozen smaller bottles costs $24."It is extremely expensive, everything is extremely expensive here," Bell told CBC North, as The Guardian reported. "Right now, we're in limbo because there is not enough jugs to fill with water to give to people."

Sharp surge in energy prices threatens economic recovery and is already slowing growth Energy prices are surging, and the economy is already feeling the pinch of higher fuel costs though it is far from stalling out. There is an unusual coincidence of much higher oil, natural gas and coal prices, combined with other rising commodities and supply chain disruptions. That perfect storm of shortages and higher prices begs the question of whether the economy could go into a serious tailspin or even a recession. Economists say, for now, the jump in prices is not the type of oil shock that will turn U.S. growth negative, but there will be economic consequences of higher energy costs, particularly in places like Europe where natural gas prices have skyrocketed. "Periods of trending oil prices tend not to be a problem," JPMorgan chief economist Bruce Kasman said. "The periods of spiking oil prices tend to be what gets you into trouble. They tend to be largely supply driven, and they tend to have disruptive elements that are more broad in terms of their potential drags on growth." "We do have a rise in energy that will be a drag on fourth quarter growth," he added. "It's not at a point where we're warning about recession, but it's at the point where you have to worry about it hurting growth in a material way." American consumers have already been paying up for gasoline, and heating and electricity costs could rise more this winter. Oil prices are up more than 65% this year so far, while natural gas prices have jumped more than 112% since January. "We're looking at GDP growth in the 4% to 6% range ... We would have to see massive doubling and tripling of oil prices for it to have such a bad effect that we go ... to negative growth," . Since last October, gasoline prices have risen about $1.10 per gallon, and are now at $3.27 per gallon of unleaded, according to AAA. Oil prices were depressed and even turned negative when the pandemic shut down the economy in 2020. Now, forecasts for $100 oil are getting more common, as West Texas Intermediate oil futures trade above $80 per barrel for the first time since 2014. "What's different about this is normally it's oil that leads an energy crisis, but in this case it's the tail that's being wagged by natural gas, coal and renewables," said Daniel Yergin, vice chairman of IHS Markit. "Oil is filling in to make up for the fact that [liquified natural gas] is maxed out and wind in Europe has been a lot lower than normal." Yergin said oil will likely remain under pressure, and within several months about 600,000 to 800,000 barrels a day could be used as a substitute for natural gas in Europe and Asia, where supplies are short. Oil can be substituted for electricity generation and in some manufacturing. Citigroup forecasts a winter price shock that could see natural gas prices in Europe average over $30 per one million British thermal unit in the fourth quarter and over $32 in Asia. But Citi energy analysts also say if there is a very cold winter that could spike as high as $100 mmBtus, the equivalent of about a $580 barrel of oil. By comparison, U.S. natural gas futures are currently trading at $5.25 per mmBtu.

Sky’s the Limit for European Natural Gas Prices this Winter, Wood Mackenzie Says - European natural gas stockpiles could be completely drained over the next few months, leaving the continent wholly dependent on Russian pipeline imports if this winter turns out to be unseasonably cold in both Europe and Asia, according to an analysis from Wood Mackenzie. Colder winter weather across the globe could raise European heating demand to 20 billion cubic meters (Bcm) and redirect up to 10.5 Bcm of cargoes from the continent to Asia. Combined, that would be greater than the 29 Bcm Wood Mackenzie anticipates would be in European storage at the end of March. “There is a risk storage levels could drop to zero,” said Wood Mackenzie Vice President of Gas and LNG Research Massimo Di Odoardo. If that happens, Europe would have to rely on “timely approval” of the Nord Stream 2 pipeline (NS2) or increased Russian flows through Ukraine to avoid demand curtailments, according to Di Odoardo. NS2 could deliver up to 12.5 Bcm through the winter, but it is so far unclear whether the project would move forward in time. Meanwhile, Russia has shown some reluctance to provide additional pipeline shipments via Ukraine. However, Wood Mackenzie noted President Vladimir Putin has promised to stabilize the market, which could result in increased volumes on that route. Goldman Sachs Commodities Research analysts led by Samantha Dart said the remarks by Putin and other Russian officials reiterated statements made over the past few months. “In our view, uncertainty remains regarding potential Russian gas flows to Northwest Europe this winter,” the analysts said in a recent note to clients. Goldman expects shipments from existing pipelines to normalize from reduced levels starting in November, and NS2 will come online this winter, adding 10 Bcm of supply to the continent. “We see symmetrical risks to both these assumptions, as the recent decline in flows to Europe could reflect the lack of enough supply to feed both European and Russian gas storage sites and with the potential for the NS2 pipeline to bring additional volumes once approved,” the analysts said. “Until there is greater clarity on Russia’s gas send-outs to Europe, we expect European Union gas prices to remain volatile and skewed to the upside given the need for industrial user gas demand rationing if Russian flows remain low in November and December.” Wood Mackenzie also expects prices to ease under normal weather conditions. The consultancy predicts European storage would reach a record low 78% of capacity, or 87 Bcm by the end of October. To meet demand, the continent would likely need around 58 Bcm of storage, leaving about 29 Bcm stockpiled by the end of March. That is below the five-year average, but “comfortably above” record lows, according to Wood Mackenzie. And while LNG imports are likely to be limited this winter as demand remains strong in Asia, rebounds in UK and Norwegian production as well as stronger exports from Algeria and Azerbaijan are forecast to increase pipeline supply compared to summer. Still, whether prices go up or down would depend largely on the weather. “The sky could be the limit for European gas prices this winter,” Wood Mackenzie said.

Nord Stream 2: Vladimir Putin accused of ‘choking’ gas supply to push up price - The UK has accused Russian president Vladimir Putin of “choking off” the supply of gas to Europe to increase energy prices and win approval for its Nord Stream 2 gas pipeline, the Times reports. It continues: “Ministers believe Russia is deliberately restricting gas exports as part of a strategy to force European Union nations into approving Nord Stream 2, a pipeline under the Baltic Sea.” UK prime minister Boris Johnson warned last night that approval of the pipeline by the EU would have “significant security implications”, the paper notes, and a No 10 spokesman said: “Although Nord Stream 2 will not directly impact the UK’s energy security, it could have serious implications for central and eastern European countries. Some European countries are nearly wholly dependent on Russian gas, which raises serious concerns about energy security.” US national security adviser Jake Sullivan – who met with European Commission president Ursula von der Leyen and other officials in Brussels yesterday – “said he would not speculate on whether Russia was manipulating gas prices”, reports Politico. “Russia has a history of using energy as a tool of coercion, as a political weapon,” Sullivan told journalists, adding: “Whether that’s what’s happening here now is something I will leave to others.” Speaking to the Financial Times, Fatih Birol – executive director of the International Energy Agency – urged Russia to prove it is a “reliable supplier” by helping alleviate the supply crunch. he said: “If Russia does what it indicated yesterday and increases the volumes to Europe, this would have a calming effect on the market…I don’t say they will do it but if they wish so, they have the capacity to do it.” Peter Apps – a writer on international affairs, globalisation, conflict and other issues – has a Reuters column on why “Europe’s gas crisis comes at perfect moment for Moscow”. Meanwhile, the UK has enough gas supply capacity to meet demand this winter, grid operator National Grid said in its winter gas outlook yesterday, reports Reuters. The gas outlook report comes after UK wholesale gas prices “exceeded £3 ($4) per therm for the first time this week, having surged by about 500% since the start of the year along with soaring global energy prices”, the newswire says. Ian Radley, director of gas system operations, said: “We have a positive gas supply margin in all of our supply and demand scenarios, and there is a positive storage position as we enter the winter.“ At the same time, the National Grid Electricity System Operator (ESO) said the electricity system’s capacity should also cope with the winter, reports the Press Association. ESO boss Fintan Slye: “Margins are well within the reliability standard and, therefore, we are confident that there will be enough capacity available to keep Britain’s lights on.” However, the Guardian notes that the “risk of power cuts…has increased…with the key ‘margin’ figure falling to its lowest in five years”. The paper reports that the amount of reserve electricity supply that could be called upon was expected to be 6.6% of demand, but could fall as low as 4.2%. Reuters reports that “soaring gas prices are forecast to drive a switch to oil and put more energy suppliers in Britain out of business”. Business and energy secretary Kwasi Kwarteng has said that by decarbonising the UK’s power supply, the government would ensure that households are less vulnerable to swings in fossil fuel markets, the Press Association reports. Speaking at a conference organised by trade body Energy UK, he said: “Relying on homegrown power generation will protect consumers from gas price fluctuations…And it will, in the long run, bring down bills. We will use the wealth of Britain’s natural resources to deliver cleaner, cheaper power.”

Moscow’s EU envoy urges Europe to fix ties to avoid gas shortages - The Kremlin’s ambassador to the EU has called on Europe to mend ties with Moscow in order to avoid future gas shortages, but insisted that Russia had nothing to do with the recent jump in prices. Vladimir Chizhov, Russia’s permanent representative to the EU, said he expected Gazprom, the state-controlled exporter that supplies 35 per cent of European gas needs, to respond swiftly to instructions from president Vladimir Putin to adjust output.Action, which would help curb skyrocketing wholesale prices, was likely to come “sooner rather than later,” he said. Putin “gave some advice to Gazprom, to be more flexible. And something makes me think that Gazprom will listen,” Chizhov told the Financial Times.While rejecting assertions from European lawmakers that Russia had played a role in Europe’s gas crunch, Chizhov said Europe’s choice to treat Moscow as a geopolitical “adversary” had not helped.“The crux of the matter is only a matter of phraseology,” he said. “Change adversary to partner and things get resolved easier . . . when the EU finds enough political will to do this, they will know where to find us.” Natural gas prices in Europe have been surging, raising fears of a winter fuel crisis and putting the economic recovery in jeopardy. At one point last week spot gas prices reached nearly 10 times their level from the beginning of the year, before abruptly dropping after Putin hinted that Gazprom might increase supplies.Chizhov insisted Moscow had no interest in gas price surges. “This does not promote stability,” he said. “People will start looking around, turning back from gas to coal, which some are already doing.”Record high prices and low reserves have spooked EU governments fearful of a winter shortage and led to demands from some member states for Brussels to consider emergency remedies or new reforms. But energy commissioner Kadri Simson told the FT last week that the roots of the crisis were “not created here in Europe”.Cold winters in Europe and Asia drained gas in storage while the economic rebound from the pandemic has pushed up demand and lower wind speeds in Europe this summer have reduced renewable energy generation.Russian officials have said that regulatory approval to permit gas flows through the controversial Nord Stream 2 pipeline to Germany would help solve the crisis. Some analysts have suggested Moscow is exacerbating the price squeeze to force such an outcome. The US and many eastern EU states oppose the pipeline, which they say was designed to circumvent gas transit through Ukraine.Chizhov said the EU’s own energy policies had worsened the bloc’s woes as well as a reluctance among European energy companies to pay more to replenish their reserves. “All the problems that are arising have been created artificially. Primarily for political reasons,” he said. However, Klaus-Dieter Maubach, chief executive of German gas company Uniper, a Gazprom client, suggested last week that supplies were the issue. Uniper “would be happy if Gazprom . . . delivered more volumes to cool down the situation and lower the gas price,” he said at a conference in Russia.Chizhov also said the crisis had been aggravated by EU regulations that force Gazprom to supply a proportion of gas to Europe on the freely-traded spot market terms, rather than through long-term contracts, which Brussels has argued are uncompetitive. “Long-term contracts . . . provided security of supply and stability of volumes and prices. Then came this idea, emanating from Brussels, that the system should be changed,” he said.

Putin says Russia is not using gas as a weapon, stands ready to aid Europe -Russian President Vladimir Putin said Wednesday that his country is not using energy as a weapon a gainst Europe and that Russia stands ready to help the region as its energy crisis continues."We are not using any weapons," Putin told CNBC in Moscow on Wednesday, according to a translation. "Even during the hardest parts of the Cold War Russia regularly has fulfilled its contractual obligations and supplies gas to Europe," he said.Describing reports that Russia has withheld gas supplies to Europe, Putin called such accusations "politically motivated blather" and there was "nothing to support it [the idea] that we use energy as a kind of weapon." On the contrary, he said, Russia was "expanding its supplies to Europe."Putin's comments came as he participated in a panel moderated by CNBC's Hadley Gamble at Russian Energy Week, an annual event in Moscow which is now in its 20th year. Speaking ahead of the panel, which included the CEOs ofExxonMobil, BP, TotalEnergies and Mercedez-Benz, Putin said that Europe should "not deal in blame-shifting" over the energy crisis in the region and that European countries had not done enough to replenish gas reserves in the summer."Higher gas prices in Europe are a consequence of a deficit of energy and not vice versa and that's why we should not deal in blame shifting, this is what our partners are trying to do," he told delegates at the event."The European gas market does not look to be well-balanced and predictable" he said, with the main reason being, he added "that not everything in this market depends on the producers, no lesser role is played by the consumers of gas."Nonetheless, Russia said it was ready to meet its contractual supply obligations and to discuss additional actions and cooperation with its European partners, Putin said, stating that Russia had already increased its gas supplies to Europe by 15% so far this year.Putin laid the blame for Europe's gas shortages at its own door, as well as blaming a lack of renewable energy generation this summer and reduced supplies from other partners, including the U.S."You see the problem does not consist in us, it consists in the European side, because, first, we know that the wind farms did not work during summer because of the weather, everyone knows that. Moreover, the Europeans did not pump enough gas into their underground gas facilities ... and the supplies to Europe have decreased from other regions of the world."

Putin Blasts Accusations Russia Is Weaponizing Natural Gas As "Politically Motivated Blather" In Wednesday remarks aimed at Western press, President Vladimir Putin shot down accusations that Russia weaponizing its supplies of natural gas in order to pressure German regulators to quickly approve switching on the taps for the recently completed Nord Stream 2 pipeline. He dismissed recent reports accusing the Kremlin of withholding gas supplies to Europe as "politically motivated blatherwith nothing to support it". The statements were given to CNBC in Moscow as part of the annual Russian Energy Week major industry event, with Putin bluntly saying in response, "We are not using any weapons." The Russian leader added that "Even during the hardest parts of the Cold War Russia regularly has fulfilled its contractual obligations and supplies gas to Europe," according to the US news network's translation. Last week as Nord Stream 2 critics led by US officials alleged that the Russia-to-Germany pipeline will essentially hold Europe's energy needs hostage to Russian geopolitical whims, Putin instead pointed to Europe's ongoing energy market "hysteria" and crisis as being fundamentally a result of the 'green transition' coupled with corresponding low investment in the extraction industries.In the Wednesday remarks he re-emphasized that there's "nothing to support it [the idea] that we use energy as a kind of weapon," but instead the reality is that Russia is busy "expanding its supplies to Europe." In support of this statement he alluded to state-run Gazprom actually increasing its natural gas flow to Europe by 15% over the first nine months of this year. He added that Russia stands ready to increase its supply if that's what Europe needs and asks for."Higher gas prices in Europe are a consequence of a deficit of energy and not vice versa and that’s why we should not deal in blame shifting, this is what our partners are trying to do," Putin said during the panel conversation. He again invoked Europe's green agenda as playing a big part in its energy costs soaring just ahead of winter:"You see the problem does not consist in us, it consists in the European side, because, first, we know that the wind farms did not work during summer because of the weather, everyone knows that. Moreover, the Europeans did not pump enough gas into their underground gas facilities... and the supplies to Europe have decreased from other regions of the world."

Why the UK is producing half its electricity from gas - Unplanned maintenance at nuclear plants and lower than average wind speeds mean the country is currently relying on gas-powered stations to generate about half its electricity. The eyewatering spike in the cost of gas is painful for domestic consumers and businesses.The wholesale price last week was 500% higher than it was at the start of the year. It's a global price of course, so all countries are affected. But when it comes to generating electricity some are better insulated against the impact.Let's start by looking at the UK.Data from the National Grid shows that at lunchtime on Monday 51% of electricity was generated using gas.Wind, solar and hydroelectric accounted for 25%, nuclear just under 12% and coal a little over 1%.We're burning a lot more gas now than last October, when it was used to generate 38% of electricity.The sharp rise has been just as prices have surged.We've had to turn to gas because the amount generated by nuclear has almost halved since this time last year - several reactors are currently offline because of unplanned maintenance.So how does the UK compare to Germany and France?Well, France is heavily reliant on nuclear energy, which generated 71% of its electricity at lunchtime on Monday.Gas accounted for just 10%, so the direct impact of the price spike on consumers is much lower.Germany turned off much of its nuclear capacity after the Fukushima accident, but replaced it with coal. The dirtiest of all the fossil fuels was used to generate 32% of its electricity at lunchtime.Such heavy use of coal comes with a huge climate cost.According to a report for the UK parliament, coal produces the equivalent of around 800g of carbon dioxide per kilowatt of energy.That's twice as much as gas.Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit, said it would be wrong for the UK to follow Germany's lead and fire up coal plants."Coal just does not fit inside the carbon budgets that we have, nor the international commitments that we are signing up to," he told Sky News."And on the economics point it is cheaper than gas at the minute, but the lesson from the gas crisis is that fossil fuel prices are very volatile - so coal could become very expensive another time.

LNG Growth Said Creating Competitive Global Natural Gas Markets -Turbulence in natural gas pricing facing buyers across the globe is not a sign of an energy system breakdown but rather is a part of the ongoing creation of competitive markets, according to Carina Energy Consulting’s Sam Andrus. The United States is not only exporting LNG, “but also competitive markets,” Andrus said. “We have connected North America to global markets, and North America-based participants now have to take note of global markets.”LNG ships are “akin to pipelines. And a constraint in a pipeline is a disconnect in prices.” Still, “shipping is a pipeline without line pack,” and a tight market is going to be a reality “for some time until sufficient storage can be built in Asian markets.” Andrus highlighted the fact that Mexico lacked storage, hindering its development of pricing indexes. “Indexes work if traders are willing to trade at that spot. You don’t get trading unless you have an out, which is storage. This is a problem with Mexico. Storage is a key for competitive markets.”Mexico’s natural gas system operator Cenagas has said it is prioritizing the development of underground storage. Meanwhile, state utility Comisión Federal de Electricidad (CFE) is assuming operatorship of the Altamira LNG terminal to ensure backup supply.As a global natural gas market forms, Henry Hub and the Dutch Title Transfer Facility (TTF) are emerging as the key global benchmarks. This is because of their levels of liquidity and the nearby storage options available, Andrus said.He stressed that “competition works,” and high Japan-Korea Marker (JKM) prices last winter stimulated supply and curtailed demand. Additionally, he said U.S. natural gas production would likely respond to price signals next year. “Producers will come back next year. This year, they are forced to sit on the sidelines. There just is no cash to ramp up significantly. As they get their balance sheet fixed, they will start to come back.”

PETRONAS Marine conducts first LNG bunkering operation in Sabah - PETRONAS has conducted its first LNG bunkering operation in Sabah via its dedicated LNG bunker vessel, MV Avenir Advantage. The LNG bunkering for HL Green, the world’s largest 180 000 t LNG-powered vessel, was carried out 12 nautical miles from Sandakan Port. The successful operation was an internal collaborative effort between PETRONAS Marine, PETRONAS Energy & Gas Trading Sdn Bhd and PETRONAS Dagangan Berhad, and their external partner Sabah Ports Sdn Bhd. The Sandakan Port is strategically positioned at the international maritime trade route between Australia and Asia’s leading manufacturing hubs such as Japan, South Korea and China, making it an ideal location for PETRONAS to provide LNG bunkering to the trading vessels plying this route. Commenting on the milestone, Head of PETRONAS Marine, Emry Mohd Tamrin said, “Along with our previous operations at Port Klang in Selangor and Sungai Udang Port in Melaka, this latest effort signifies a major step towards developing Malaysia as an LNG bunkering hub. It also further solidifies PETRONAS Marine’s presence as a one-stop marine solutions partner providing cost-competitive cleaner fuels and reliable services to meet the energy demands of its customers sustainably.” He added that this LNG bunkering solution underscores PETRONAS' efforts to drive greater use of LNG as a cleaner and economically competitive source of energy in the marine industry, as well as to support concerted efforts by the International Maritime Organization in reducing greenhouse gas emissions from shipping activities.

Asia LNG price soars on China power crunch, European demand - Asia liquefied natural gas (LNG) prices soared this week, as the world’s top buyer China faced an ongoing power crunch and low inventory in Europe drove up competition for the super-chilled fuel. The average LNG price for November delivery into Northeast Asia LNG-AS was estimated at about $37 per metric million British thermal units (mmBtu), up nearly 16% from the previous week, industry sources said. December delivery prices were estimated to be about $38 per mmBtu, they added. Price agency S&P Global Platts’ Japan-Korea-Marker (JKM), which is widely used as a benchmark in the spot market, had surged to a record high of $56.326 per mmBtu on Wednesday, before easing later in the week. “The market is still very bullish for winter and any piece of headline is driving up sentiment,” a Singapore-based trader said. Gazprom’s China-focused Amur gas processing plant in Russia’s Far East has halted operations after a fire early on Friday, a spokesman for the plant told Reuters. The broader implications were not immediately clear, but the plant plays an important part in Russian gas exports to China, which has been hit by electricity shortages that have led to power rationing across the country. Bangladesh bought on LNG cargo from Vitol for delivery in mid-October at $35.89 per mmBtu and another from Gunvor for late October delivery at $36.95 per mmBtu, which are the highest prices paid by the country for spot cargoes, an official of state-run Petrobangla said. Freight rates to ship LNG rose this week and are at multi-month highs as the increase in LNG demand has driven up the need for vessels to move supplies, sources said. Production issues at Sakhalin and Indonesia are also supporting prices, a Singapore-based source said. Pakistan may consider only relying on term supplies should current spot prices remain elevated, an industry source said.

Longboat Energy Strikes Oil, Starts Drilling For More - Longboat Energy, a company created by former Faroe Petroleum management, has struck oil in a well located in the Norwegian part of the North Sea and started drilling another. Longboat Energy said that it made a discovery at the Rødhette exploration well. Production license 901 where the well is located is operated by Var Energi with a 50 percent stake while partners Longboat and Concedo hold 20 percent each. Equinor holds the remaining 10 percent. The exploration well, designated 7122/6-3 S, encountered a 95-foot hydrocarbon column in the primary target in the Middle Jurassic Stø Formation. The top of the reservoir was reached close to prognosis containing high net-to-gross, moderate to good quality sandstone. Data acquisition indicates a gas column of around 60 feet in the well over an oil rim. Preliminary estimates by the operator place the size of the discovery between 9 and 12 mmboe recoverable. The well was drilled on time and on budget and will now be plugged and abandoned as planned. As the Rødhette volumes are at the lower end of pre-drill expectations, both existing discoveries and additional prospectivity in the area will be considered in the evaluation of the commercial development potential of Rødhette through existing regional infrastructure. The well was drilled around 18 miles north of the Goliat field. To get in on the action in a seven-well exploration program in Norway, the company entered into agreements with three separate companies structured as three farm-in transactions. Rødhette, already announced as a discovery was agreed as a farm-in with Var Energi. The second one, Egyptian Vulture, is operated by Equinor and spud last month. Longboat also announced the spud of the third well – Mugnetind – with the Maersk Integrator jack-up rig, located in production license 906, which is operated by Aker BP with a 60 percent stake. DNO and Longboat are partners and hold a 20 percent stake each. The Mugnetind prospect is estimated to contain gross mean prospective resources of 24 mmboe with further potential upside estimated at 47 mmboe. The chance of success associated with the Mugnetind prospect is 51 percent with the key risks being reservoir presence and quality. The well is expected to take approximately five to seven weeks to drill with an estimated net cost to Longboat of around $7 million.

As Western Oil Giants Cut Production, State-Owned Companies Step Up - — After years of pumping more oil and gas, Western energy giants like BP, Royal Dutch Shell, Exxon Mobil and Chevron are slowing down production as they switch to renewable energy or cut costs after being bruised by the pandemic. But that doesn’t mean the world will have less oil. That’s because state-owned oil companies in the Middle East, North Africa and Latin America are taking advantage of the cutbacks by investor-owned oil companies by cranking up their production. This massive shift could reverse a decade-long trend of rising domestic oil and gas production that turned the United States into a net exporter of oil, gasoline, natural gas and other petroleum products, and make America more dependent on the Organization of the Petroleum Exporting Countries, authoritarian leaders and politically unstable countries. The push by governments to increase oil and gas production means it could take decades for global fossil fuel supplies to decline unless there is a sharp drop in demand for such fuels. President Biden has effectively accepted the idea that the United States will rely more on foreign oil, at least for the next few years. His administration has been calling on OPEC and its allies to boost production to help bring down rising oil and gasoline prices, even as it seeks to limit the growth of oil and gas production on federal lands and waters. The administration’s approach is a function of two conflicting priorities: Mr. Biden wants to get the world to move away from fossil fuels while protecting Americans from a spike in energy prices. In the short run, it is hard to achieve both goals because most people cannot easily replace internal-combustion engine cars, gas furnaces and other fossil fuel-based products with versions that run on electricity generated from wind turbines, solar panels and other renewable sources of energy. Western oil companies are also under pressure from investors and environmental activists who are demanding a rapid transition to clean energy. Some U.S. producers have said they are reluctant to invest more because they fear oil prices will fall again or because banks and investors are less willing to finance their operations. As a result, some are selling off parts of their fossil fuel empires or are simply spending less on new oil and gas fields. That has created a big opportunity for state-owned oil companies that are not under as much pressure to reduce emissions, though some are also investing in renewable energy. In fact, their political masters often want these oil companies to increase production to help pay down debt, finance government programs and create jobs. Saudi Aramco, the world’s leading oil producer, has announced that it plans to increase oil production capacity by at least a million barrels a day, to 13 million, by the 2030s. Aramco increased its exploration and production investments by $8 billion this year, to $35 billion. “We are capitalizing on the opportunity,” Aramco’s chief executive, Amin H. Nasser, recently told financial analysts. “Of course we are trying to benefit from the lack of investments by major players in the market.” Aramco not only has vast reserves but it can also produce oil much more cheaply than Western companies because its crude is relatively easy to pump out of the ground. So even if demand declines because of a rapid shift to electric cars and trucks, Aramco will most likely be able to pump oil for years or decades longer than many Western energy companies. “The state companies are going their own way,” said René Ortiz, a former OPEC secretary general and a former energy minister in Ecuador. “They don’t care about the political pressure worldwide to control emissions.” State-owned oil companies in Kuwait, the United Arab Emirates, Iraq, Libya, Argentina, Colombia and Brazil are also planning to increase production. Should oil and natural gas prices stay high or rise further, energy experts say, more oil-producing nations will be tempted to crank up supply.M

'Massive Floating Time Bomb': Decaying Tanker in Red Sea Holds 4x the Oil Spilled by Exxon Valdez - An abandoned supertanker holding more than one million barrels of crude oil has been slowly corroding off Yemen's coast, and a new study out Monday warns that the consequences of an "imminent" spill in the Red Sea could be graver than initially thought — cutting off access to clean water and food aid for millions of people in a matter of days and completely decimating the region's fishing stocks within three weeks."The possibility of a massive oil spill in the Red Sea is increasingly likely," write the authors of the peer-reviewed paper, published in the journal Nature Sustainability. "The Safer, a deteriorating oil tanker containing 1.1 million barrels of oil, has been deserted near the coast of Yemen since 2015 and threatens environmental catastrophe to a country presently in a humanitarian crisis."In their analysis of "the immediate public health impacts of a simulated spill," the scholars estimate that "all of Yemen's imported fuel through its key Red Sea ports would be disrupted and that the anticipated spill could disrupt clean-water supply equivalent to the daily use of 9.0–9.9 million people, food supply for 5.7–8.4 million people, and 93–100% of Yemen's Red Sea fisheries."The new study models the anticipated health effects of a spill — under various seasonal conditions and cleanup scenarios — over the course of three weeks.The researchers write that "ports and desalination plants, crucial for providing fuel, food, and water, stand to be disrupted by the spill. We estimate that two weeks after a spill, Yemen's key ports of Hudaydah and Salif will likely be directly impacted.""The spill and subsequent port closures will disrupt maritime transport across the Red Sea, rerouting many shipments around Africa," the paper says. "We expect fuel prices in Yemen to spike as a consequence."The daily clean water supply for an estimated 1.0-1.9 million people would be threatened if desalination plants are contaminated, while another eight million people could lose access to running water if the spill closes ports, causing fuel shortages that shut down fuel-powered pumps or water trucks.Moreover, hunger would be exacerbated by food aid disruptions and fishery closures."In the event of Yemen's Red Sea ports closing within two weeks of the spill, food aid will be disrupted for an estimated 5.7 (3.7–8.1) million people who currently require food assistance," according to researchers, who estimate that "if Aden's port also closes, a total of 8.4 (5.4–11.9) million people will not receive food aid."Within one week, two-thirds to 85% of Yemen's Red Sea fisheries would be jeopardized, and within three weeks, that figure would surge to 93% to 100%, "depending on the season," the paper states.The researchers "also estimate an increased risk of cardiovascular hospitalization from pollution ranging from 5.8 to 42.0% over the duration of the spill." "The public health impacts of a spill from the oil tanker Safer are expected to be catastrophic, particularly for Yemen," the scholars write.

Brent Crude Nears $85 As Global Energy Crisis Worsens - Oil prices extended Friday’s rally into Monday, with the U.S. benchmark topping $81 and trading just shy of $82 a barrel as Europe and Asia continue to struggle to secure energy supply for the winter.As of 8:21 a.m. EDT on Monday, the front-month WTI Crude contract traded at $81.75, up by 3.00%. The international benchmark, Brent Crude, was up 2.35% at $84.34.Oil extended the rally from last week, which saw the U.S. benchmark topping the $80 per barrel for the first time since 2014.China’s coal and power crisis worsened over the weekend, with coal futures in China closing at a new record high on Monday after sixty coal mines in the country’s top coal-producing region were forced to shut amid heavy rain, flooding, and landslides. The weather-related setbacks for Chinese coal production come at a time when the world’s second-largest economy is grappling with a shortage of coal supply and a power crisis, which threaten to slow economic growth.Europe’s natural gas prices rose on Monday, after the softness seen at the end of last week, following forecasts of colder weather. Gas prices in the UK and at the Dutch TTF hub, the European gas price benchmark, were off the record highs from last week. Yet, the latest data from Gas Infrastructure Europe (GIE), cited by ING, shows that gas storage sites across Europe are just over 76 percent full at the moment, compared to a five-year average of nearly 91 percent.The tighter coal and natural gas markets globally raise the outlook for gas-to-oil switch, which is set to boost oil demand.Crude oil “started the week on a strong footing as the global power crunch continues to raise expectations for higher gas-to-oil switching demand at a time where OPEC+ maintains its modest pace of oil monthly oil production increases,” Saxo Bank’s strategy team said in note on Monday. “With WTI already trading at seven-year high, Brent may now target the 2018 high at $86.74,” the bank’s analysts added.

Oil trades above $80 a barrel, hitting a 7-year high -- U.S. oil prices hit a seven-year high Monday, marking an increase of more than 120 percent from just under a year ago.On Monday morning, American crude prices increased 2 percent to hit $81.50 a barrel, dropping slightly to $81.15 by midday before closing at $80.49, the first time since October 2014 that U.S. crude closed at more than $80 a barrel.An international natural-gas shortage could soon extend to the oil market, according to The Wall Street Journal. American natural-gas futures reached $6.31 per million British thermal units last Tuesday, the highest in nearly 13 years, and the shortage has affected households across Europe. If the shortage persists as temperatures turn colder, some power plants may rely on oil to make up for the shortfall, boosting the demand for crude oil. Shortly after taking office, President Biden signed a temporary freeze on leasing for new oil and gas drilling on federal lands, but over the summer a federal court placed a temporary injunction on the order. The administration is appealing the decision but has resumed leasing during the appeals process. The Energy Information Administrationsaid in March that the pause would likely not affect production until 2022.Energy Secretary Jennifer Granholm said at a Financial Times conference that the administration is considering further releases of oil from the Strategic Petroleum Reserves, according to the Journal, while earlier this year Biden called on the Organization of Petroleum-Exporting Countries to step up production. OPEC announced in August that it would begin a series of coordinated supply increases in August, upping production by 400,000 barrels a day each month thereafter.In response to the European crunch, Russian President Vladimir Putin has suggested increasing the supply of natural gas from Russia to Europe could ease the shortage. Russia recently put finishing touches on the Nord Stream 2 pipeline, a joint arrangement with German entities. The completion came after the U.S. eased sanctions on people and companies involved in its construction, arguing it could not prevent the pipeline’s construction without imposing sanctions on German officials as well.

Oil Bull Continues Run with WTI Closing Above $80 | Rigzone - West Texas Intermediate crude closed above $80 a barrel for the first time since late 2014 as a growing power crisis from Europe to Asia boosts demand for oil ahead of winter. U.S. crude futures advanced 1.5% on Monday in New York, while its global counterpart Brent rose closer to the $85-a-barrel mark. Prices of coal and natural gas have surged globally with stockpiles running low before the Northern Hemisphere winter, prompting some switching to oil products such as diesel and fuel oil. It is quickly tightening the market as the Organization of Petroleum Exporting Countries and its allies are sticking with their plan to only gradually roll back production cuts. The oil market’s price structure is flashing bullishness, with the difference between New York crude’s front two contracts hit the widest in more than two years, indicating shrinking supplies in the U.S. storage hub of Cushing, Oklahoma. “There is definitely this fear of the supply side going to dry up,” said Fiona Cincotta, senior financial markets analyst at City Index. Even OPEC adding back supply to the market is not “necessarily going to have a massive impact on cooling the price of oil. Oil to $90 is clearly in sight.” Crude futures have advanced about 20% since mid-August as the energy crisis has intensified. Saudi Aramco estimates the gas shortage has already increased oil demand by around 500,000 barrels a day, while Citigroup estimates it could reach about 1 million a day in a bullish case. Citi raised its Brent price estimate for this quarter to $85 a barrel, potentially increasing to as high as $90 at times, on “higher demand, lost supply, gas-to-oil switching and price contagion this winter,” according to a report. If prices continue to rise, the U.S. is likely to ask OPEC member states to pump more crude to help ease a surge the energy prices, said Daniel Yergin, vice chairman of IHS Markit, in a Bloomberg Television interview. Over the past few months, the White House has been in communication with OPEC, pushing them to boost their output while stressing the importance of affordable energy. Prices: West Texas Intermediate for November delivery rose $1.17 to settle at $80.52 a barrel in New York, the highest since 2014. Brent for December settlement climbed $1.26 to end the session at $83.65 a barrel. Various underlying oil market gauges are showing signs of strength. WTI crude’s nearest contract traded at the biggest premium to second-month futures since September 2019 on Monday, in a sign of tighter supplies. The so-called prompt spread has increased as more of the world attempts to substitute fuel oil for natural gas as quickly as possible.

Crude Futures Extend Higher Amid EU, China's Power Crisis - Following another explosive rally on Monday, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange wobbled in early trade Tuesday, with November West Texas Intermediate higher, trading near $81 per barrel (bbl), propelled by concerns over a quickly tightening global oil market as Organization of Petroleum Exporting Countries and Russia-led partners stick with their agreement to gradually roll back production cuts next month, with global stockpiles of coal and natural gas running low before the winter season in the Northern Hemisphere. Near 7:30 a.m. ET, November WTI futures were $0.41 higher near $80.96 bbl, and the international crude benchmark Brent contract advanced $0.30 to $83.93 bbl. NYMEX November ULSD futures softened 0.31 cents to $2.5119 gallon, and front-month RBOB futures added 0.52 cents to $2.3831 gallon. WTI settled above $80 bbl on Monday for the first time since November 2014 as a growing power crisis in European Union and Asia boosted demand for gas-to-oil substitution. Bank of America commodity team estimates that in a sustained switching scenario, a global oil market supply deficit this winter could easily exceed 2 million bpd with top line demand pushed up by 1 to 2 million barrels per day (bpd), driven primarily by Asian fuel burning capacity. Despite promised production increases, market participants doubt the capacity of Russia's Gazprom to rapidly increase gas flows into both the EU and China, with the country's gas production in September having reached a decade-high. Furthermore, structural constraints including domestic storage needs and a fire at Gazprom's Urengoy processing facility have further undermined the outlook for increased gas exports. There are some signs that OPEC+ could increase production faster-than-expected this winter, with private surveys showing that countries that were unable to meet their quotas in the previous months, namely Kazakhstan, Nigeria, and Angola, compensated for supply shortfalls in September. According to private surveys, 23-nation coalition raised crude production by 650,000 bpd in September to 36.51 million bpd, driven by a rebound in Nigeria's output after resumption of loading activities at the Forcados terminal on Sept. 8. The Forcados terminal's export outlet was under force majeure in August, limiting supply. Even so, analysts estimate Nigeria is pumping almost 100,000 bpd less than its OPEC target as underinvestment restrains output.

OPEC trims 2021 demand forecast but says gas price surge could help - (Reuters) - OPEC has trimmed its world oil demand growth forecast for 2021 while maintaining its 2022 view, its monthly report showed on Wednesday, but it said surging natural gas prices could boost demand for oil products as end users switch. The Organization of the Petroleum Exporting Countries (OPEC) now expects oil demand to grow by 5.82 million barrels per day, (bpd), down from 5.96 million bpd in its previous forecast, saying that the downward revision was mainly driven by data for the first three quarters of the year. It maintained a growth forecast of 4.2 million bpd for next year. The group of oil-producing countries said, however, that natural gas prices at record highs could provide a potential boost to oil demand growth as industrial users switch to oil products instead. "Should this trend continue, fuels such as fuel oil, diesel, and naphtha could see support, driven by higher demand for power generation, refining and petrochemical use," OPEC said. European gas at the Dutch TTF hub on Wednesday stood at a crude oil equivalent of about $177 a barrel, based on the relative value of the same amount of energy from each source, Reuters calculations based on Eikon data showed – higher than the record high Brent crude price of $147 in 2008. Brent crude prices stood at about $83 a barrel by 1500 GMT. At an industry event on Tuesday Russian President Vladimir Putin said oil prices could reach $100 a barrel but added that OPEC+ was doing its utmost to stabilise the global market. Saudi Aramco CEO Amin Nasser last week put the demand boost from the gas-to-oil switch at about 500,000 bpd. OPEC+, an alliance between OPEC and other producers led by Russia, this month agreed to stick with its plan for a 400,000 bpd production increase for November as it gradually unwinds output cuts it made to support previously low prices. In its report, OPEC raised its forecast for 2021 demand for OPEC crude oil by 100,000 bpd to 27.8 million bpd and by another 100,000 bpd for 2022 to 28.8 million bpd. It said that OPEC's output in September rose by about 490,000 bpd to 27.33 million bpd, according to secondary sources. In a sign of a tightening oil market, OPEC said that OECD commercial oil inventories fell by 19.5 million barrels in August from the previous month to 2.855 billion barrels, according to preliminary data. This figure is 183 million barrels below the latest five-year average and 131 million barrels below the 2015-2019 average, OPEC said.

Oil prices settle mixed as IMF trims global growth outlook (Xinhua) -- Oil prices ended mixed on Tuesday as the International Monetary Fund ((IMF) cut its outlook for global growth. The West Texas Intermediate (WTI) for November delivery added 12 cents to settle at 80.64 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for December delivery decreased 23 cents to close at 83.42 dollars a barrel on the London ICE Futures Exchange.The above moves came as the IMF on Tuesday projected that the global economy would grow by 5.9 percent in 2021, down by 0.1 percentage point from July's forecast, according to the latest World Economic Outlook.Meanwhile, tight market situation brought about by robust demand and limited supply continue to lend buoyancy to oil prices.The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, last week decided to step up its oil production only gradually."For as long as OPEC+ appears unwilling to counter this by expanding its oil production to a greater extent, this is unlikely to change, and oil prices are likely to continue rising," Carsten Fritsch, energy analyst at Commerzbank Research, said Tuesday in a note.

WTI Shrugs At Mixed Inventory Data: Crude Build, Gasoline Draw - Oil prices were flat today after accelerating up to multi-year highs late last week and early this week as OPEC sounded a cautious note on the strength of oil demand (trimming its forecast for 2021 demand growth to 5.8mm b/d, down from its previous projection of 5.96mm b/d), while EIA raised its price forecasts for 2022.“Despite positive assumptions on oil demand going into the final quarter of the year, supported by seasonal petrochemical and heating fuel demand as well as the potential of switching from natural gas to oil,” actual data on consumption earlier in the year was weaker than expected, OPEC’s Vienna-based secretariat said in the report.It advised producers “to maintain a vigilant watch over market fundamentals.”However, the next leg one way or the other will likely be triggered by the latest inventory data as analysts expected a 3rd weekly build in a row for crude, throwing some cold water on the recovery/demand hype.API

  • Crude +5.213mm (+900k exp)
  • Cushing -2.275mm
  • Gasoline -4.575mm (+600k exp)
  • Distillates -2.707mm (-1.1mm exp)

A big build in crude stocks was offset from a market perspective by the big gasoline draw in the prior week...

$100 oil is 'quite possible,' Russia's Putin says- Russian President Vladimir Putin said Wednesday that oil prices could well reach $100 per barrel as demand for all energy commodities grows. Energy prices have soared across the board as economies reopen after months of Covid pandemic-induced lockdowns and supply remains tight. West Texas Intermediate crude futures, the U.S. oil benchmark, crossed $80 per barrel last week for the first time since November 2014. But Putin, leader of one of the world's biggest oil-producing nations, believes it can go even higher. When asked if WTI could reach $100 per barrel, he said, "That is quite possible." Speaking to CNBC's Hadley Gamble at an event in Moscow, Putin, however, said that Russia and other oil-producing countries are doing their utmost to bring some stabilization to the market. "Russia and our partners and OPEC+ group, I would say we are doing everything possible to make sure the oil market stabilizes. We are trying not to allow any shock peaks in prices. We certainly do not want to have that — it is not in our interests," he said, according to a translation. Earlier this month, OPEC and allied nonmember nations, known as OPEC+, decided to keep their stance by not stepping up production, despite pressure from other nations. The OPEC+ group is meeting regularly to discuss its policies amid a volatile energy market.

Oil Futures Ease on Weak Eurozone Industrials Ahead of CPI -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange declined in early trade Wednesday after data from European Union showed industrial production in the single-currency area fell sharply at the end of the third quarter, pressured by supply-chain bottlenecks and a record run in electricity prices, while investors turned cautious ahead of a key reading on U.S. inflation that could provide additional clues on the economy's growth rate in September.U.S. consumer price index for September will likely show rising energy and food costs have pushed up the headline inflation reading to 0.4% last month, a slightly faster pace than core CPI at 0.3%. Global supply shortages and surging commodity prices are seen lifting inflation across all sectors of the economy.Ahead of the data's release later Wednesday morning, U.S. dollar weakened 0.26% against a basket of foreign currencies to trade near 94.265, although failed to lift front-month West Texas Intermediate futures in overnight trading. November WTI declined $0.53 from a seven-year high $80.64 per barrel (bbl) settlement on Tuesday, and the international crude benchmark Brent contract for December delivery eased $0.56 to trade just below $83 bbl. NYMEX ULSD November contract fell 1.37 cents to $2.4964 gallon, and front-month RBOB eased 1.4 cents to $2.3689 gallon. Internationally, industrial production in the euro area slid 1.6% in August after a 1.5% surge in July pressured by supply-chain bottlenecks and record run in electricity prices, according to Eurostat data released early morning Wednesday. Details of the report show that production of capital goods fell 3.9%, durable consumer goods by 3.4%, intermediate goods by 1.5% and nondurable consumer goods by 0.8%, while production of energy rose by 0.5% in the month of August. The readings show supply and capacity constraints are weighing on factory output, so analysts expect more sluggishness to follow in the months ahead. The International Monetary Fund on Tuesday cut its global growth forecast, citing supply chain challenges and a persistent COVID-19 pandemic in parts of the global economy. "We're seeing major supply disruptions around the world that are also feeding inflationary pressures, which are quite high and financial risk taking also is increasing, which poses an additional risk to the outlook," IMF economist Gita Gopinath said in a releasing the assessment. According to Goldman Sachs analysts, labor shortages, production bottlenecks and ongoing COVID-19 pandemic will shave 0.2% off U.S. growth this year for a 5.6% growth rate, with the investment bank projecting the U.S. economy to expand by 4% in 2022. Separately, Organization of the Petroleum Exporting Countries released their Monthly Oil Market Report this morning estimating global oil demand growth this year slowed to 5.8 million barrels per day (bpd) from 5.96 million bpd. The downward revision is mainly driven by lower-than-expected data for the first three quarters of this year, despite healthy oil demand assumptions for the fourth quarter, which OPEC assumes will be supported by a seasonal uptick in petrochemical and heating fuel demand and the potential switch from natural gas to petroleum products due to high gas prices.

WTI Slides After Biggest Crude Build Since March - Oil prices are higher this morning after a mixed picture from API (big crude build offset by big gasoline draw) and helped by comments from IEA that shortages of natural gas in Europe and Asia are boosting demand for crude. DOE:

  • Crude +6.008mm (+900k exp)
  • Cushing -1.968mm
  • Gasoline -1.958mm (+600k exp)
  • Distillates -24k (-1.1mm exp)

Crude stocks rose by the most since March last week - the 3rd weekly build in a row - but the draw in gasoline and distillates was modest...(see graphs) National crude inventories are now sitting at the highest since August. US Crude production continued to rebound, almost back to pre-IDA levels... WTI hovered around $81.20 ahead of the official DOE print but slid back below $81 on the big crude build...

Oil Futures Down In Steady Trading On OPEC Demand Concerns | Rigzone - Oil closed lower as traders assessed OPEC’s skepticism around the strength of crude demand even after prices hit the highest since 2014. Futures in New York fell 0.3% on Wednesday after trading little changed for most of the afternoon. OPEC revised down its estimate for 2021 global oil consumption in its monthly market report. The group said that while the spike in natural gas prices could boost petroleum use in some areas, such as power generation, it could potentially curb demand in other areas, such as refining. Meanwhile, the U.S. government boosted its crude price forecasts for next year by nearly $6 a barrel. While crude futures have shown some signs of fatigue, “the trend is still clearly bullish and requires a macro driver to turn the tide,” said Fawad Razaqzada, financial market analyst at ThinkMarkets. Crude has surged this year as a rebound in activity from the pandemic has boosted consumption, depleting inventories. In addition, shortages of natural gas and coal have driven rising demand for alternative power generation and heating fuels in Asia and Europe ahead of the winter. In fact, oil prices may even spike to over $100 a barrel because of fuel switching, according to Bank of America’s Francisco Blanch. However, in the near-term, West Texas Intermediate crude may see some selling pressure if prices fall below $79.30 a barrel. Any dips in price until crude hits the $76.50-a-barrel level will likely be viewed as a buying opportunity by traders, according to Razaqzada. West Texas Intermediate for November delivery fell 20 cents to settle at $80.44 a barrel in New York. Brent for December settlement dropped 24 cents to end the session at $83.18 a barrel. The Energy Information Administration boosted its forecast for annual average WTI and Brent prices in 2022 by $5.87 to $68.24/bbl and $71.91 a barrel, respectively, according to the agency’s monthly Short-Term Energy Outlook on Wednesday. The agency also warned that spending on energy for those households primarily using heating oil will rise 43% compared with last winter, according to its Winter Fuels Outlook report. Meanwhile, OPEC’s estimate for global oil demand growth this year was reduced to 5.8 million barrels a day, down from 5.96 million barrels a day previously. The change was due to lower consumption data in the first nine months of the year, while total fourth-quarter demand was revised up by 120,000 barrels a day to 99.82 million barrels a day.

IEA Says Gas Crisis Spilling Over Into Oil Markets - Shortages of natural gas in Europe and Asia are boosting demand for oil, deepening what was already a sizable supply deficit in crude markets, the International Energy Agency said. Crude has surged above $80 a barrel, the highest in three years, as traders anticipated that record gas prices would stimulate consumption of other fuels, particularly for power generation. That’s already happening and could add about 500,000 barrels a day to oil use on average over the coming six months, the IEA said on Thursday. “An acute shortage of natural gas, LNG and coal supplies stemming from the gathering global economic recovery has sparked a precipitous run-up in prices for energy supplies and is triggering a massive switch to oil products,” the IEA said. “Provisional August data already indicates that there is some unseasonably high demand for fuel oil, crude and middle distillates for power plants across a number of countries, including China.” The latest analysis from the agency, which advises industrialized countries on energy policy, shows how the acute shortage of natural gas is spilling over into other markets and the broader economy. The crisis is deepening the current oil-supply deficit, potentially disrupting OPEC’s careful plan to gradually revive idle production. It’s roiling energy-intensive industries and threatens to curb GDP growth and boost inflation. Brent crude rose 0.9% to $83.95 a barrel as of 9:21 a.m. in London, bringing the increase for the week to almost 2%. The IEA raised its estimate for demand growth this year by 300,000 barrels a day to 5.5 million barrels a day, and increased it slightly for 2022 to 3.3 million barrels a day. The effect of oil-gas switching will mostly be felt this quarter and next, the agency said. The gas crisis isn’t entirely a net positive for oil consumption. The increase in the IEA’s demand estimates was tempered by a weaker outlook for GDP resulting mainly from supply-chain issues and rising energy costs. “The surge in prices has swept through the entire global energy chain,” the IEA said. “Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery.” The agency noted that the Organization of Petroleum Exporting Countries and its allies stuck to their plan to boost production by 400,000 barrels a day “despite calls from major consuming countries for a more substantial increase.” OPEC+ showed no signs of deviating from its plan. Speaking at Russian Energy Week in Moscow, Saudi Energy Minister Prince Abdulaziz bin Salman reiterated his commitment to a gradual and phased revival of idle supply. The crisis engulfing other energy markets shows what a good job the group has done in regulating oil, he said. Global oil production will rise by about 2.7 million barrels a day from September to the end of the year as OPEC+ continues to unwind its cuts and U.S. output recovers from the damage caused by Hurricane Ida, the IEA said. Even with those additions, the market will be in a supply deficit of about 700,000 barrels a day for the rest of this year, before flipping back into surplus in early 2022, the IEA said.

Oil prices climb on upgrade to IEA demand forecast (Reuters) - Oil prices rose by about 1% on Thursday after the International Energy Agency said that record natural gas prices would boost demand for oil and top oil producer Saudi Arabia dismissed calls for additional OPEC+ supply. Brent crude futures gained 89 cents, or 1.1%, to $84.07 a barrel by 1204 GMT after falling 0.3% on Wednesday. U.S. West Texas Intermediate (WTI) crude futures climbed 87 cents, or 1.1%, to $81.31, more than recouping the previous day's 0.3% decline. Oil demand is set to jump by half a million barrels per day (bpd) as the power sector and heavy industries switch from other more expensive sources of energy, the IEA said, warning that the energy crunch could stoke inflation and slow the world's economic recovery from the COVID-19 pandemic. read more In its monthly report, the IEA increased its global oil demand growth forecast by 170,000 bpd to 5.5 million bpd for 2021 and by 210,000 bpd to 3.3 million bpd for 2022. The agency now expects total oil demand in 2022 to reach 99.6 million bpd, slightly above pre-pandemic levels. Meanwhile, Saudi Arabia dismissed calls for additional OPEC+ production increases, saying its efforts with allies are sufficient and serving to protect the oil market from the wild price swings seen in natural gas and coal markets. read more The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, have done a "remarkable" job acting as so-called regulator of the oil market, Saudi Arabia's energy minister Prince Abdulaziz bin Salman told a forum in Moscow on Thursday. At its meeting earlier this month, OPEC+ stuck to its previous agreement to increase output by 400,000 bpd a month as it unwinds production cuts. A larger than expected fall in U.S. fuel stocks also boosted prices on Thursday. The American Petroleum Institute (API) said on Wednesday that U.S. crude stockpiles rose by 5.2 million barrels for the week ended Oct. 8, but gasoline inventories fell by 4.6 million barrels and distillate stocks declined by 2.7 million barrels, according to market sources who saw the API data.

Goldman Sachs says oil prices could be higher for much longer - Oil prices could stay at higher levels in the years to come as demand rebounds while supply remains tight, according to Goldman Sachs' head of energy research. Damien Courvalin, who is also a senior commodity strategist, said the market fundamentals warrant higher prices and that the bank's forecast for Brent crude is $85 per barrel for the next several years. "This is not a transient winter shock like it could be for gas. This is actually the beginning of a material repricing higher for oil," he told CNBC's "Street Signs Asia" on Thursday. Goldman Sachs' base case is for Brent to hit $90 per barrel by the end of the year. U.S. crude futures were up 1.26% at $81.45 per barrel, while international benchmark Brent crude futures gained 1.24% to trade at $84.21 per barrel on Thursday afternoon in Asia. The oil market is in "the longest deficit we've seen in decades," and demand will continue to outstrip supply in winter, said Courvalin. The lack of upstream investment in oil supply while demand grows points to "sustained high prices" at least in the year ahead, he added. What's happening in the coal market — where prices are at record highs because supply shrank faster than demand — is a "warning sign" for oil, Courvalin said. Oil drilling activity hasn't recovered much on the supply side, while demand is growing, he said, describing the market as being in an "entrenched deficit." "We're facing potential multi-year deficits and the risk of significantly higher prices," he said. There needs to be a realization that the transition to cleaner energy will take a long time, and that calls to stop investing in hydrocarbon supply will only create "much higher energy prices in the coming years," he said. Despite oil futures climbing more than 60% this year and hitting multi-year highs, Courvalin said oil producers haven't increased supply. "Demand is rebounding further and we need to really start to see that investment," he said. Shale producers, however, are focused on returning cash to shareholders. "That's the key of the sustainability of higher prices," he said, adding that he sees oil demand hitting new record highs in 2022 and 2023. "The fundamentals actually very much support the view of higher prices than we've seen, pretty much since 2014," he said.

Oil Futures Gain as Demand Outlook Counters Inflation Worry-- In early trading during the last session of the week, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange are again rallying on shortages of natural gas and coal supplies globally that could add 500,000 barrels per day (bpd) to global oil demand over the coming months, while accelerating inflation signals out of China, European Union, and the United States capped market upside ahead of the release of key economic data domestically. China's producers price index rose 10.7% from a year earlier in September, according to the National Bureau of Statistics, the biggest rise since the agency started compiling the data in 1996. That follows a 9.5% increase in August and 9% hike in July, suggesting consistent inflationary pressures from rising commodity prices and production curbs. Consumer inflation eased in September to 0.7% from 0.8% in August amid signs of weakening domestic demand and decline in volatile food prices. The divergence between the two inflation gauges presents a policy dilemma for Beijing that must balance propping up consumer demand against rising producer prices. Domestically, there are signs a tightening labor market is putting upward pressure on wages, as employers try to hang onto current employees or bring in new staff, adding to immediate inflationary pressures in the broader economy. In the latest employment report, U.S. Labor Department said wages increased by an average 19 cents to $30.85 in September, following large gains in the prior five months. Meanwhile, job growth has slowed notably during that month to just 194,000 compared with at least 450,000 new jobs expected. U.S. consumer price index -- a gauge for inflation -- rose 5.4% in September from a year earlier, the same rate as in June and July, and slightly higher than in August. The so-called core price index, which excludes the often-volatile categories of food and energy, in September climbed 4% from a year earlier, the same rate as in August. St. Louis Federal Reserve President James Bullard said in a recent interview that the case for inflation to dissipate over the next six months has weakened considerably, adding that current high levels of core CPI is "concerning." His comments were echoed by Philadelphia Federal Reserve official Patrick Harker who suggested the central bank to start tapering its $120 billion a month in asset purchases as early as next month. Federal Open Market Committee will next meet on Nov. 2-3, with consensus among officials growing for the central bank to make its tapering announcement.

Oil prices rise to three-year high on back of supply deficit forecasts – CNA - Oil prices settled at a three-year high above US$85 a barrel on Friday, boosted by forecasts of a supply deficit in the next few months as the easing of coronavirus-related travel restrictions spurs demand. Brent crude futures settled up 86 cents, or 1per cent, at US$84.86 a barrel. Front-month prices, which touched their highest level since October 2018 at US$85.10, hit a weekly rise of 3per cent, its sixth straight weekly gain. U.S. West Texas Intermediate (WTI) crude futures rose 97 cents, or 1.2per cent, to US$82.28 a barrel. The was up 3.5per cent on the week in an eighth consecutive weekly rise. Demand has picked up with the recovery from the COVID-19 pandemic, with a further boost from power generators who have been turning away from expensive gas and coal to fuel oil and diesel. The White House said it will lift COVID-19 travel restrictions for fully vaccinated foreign nationals effective Nov. 8, which should boost jet fuel demand. Meanwhile, a sharp drop in oil stockpiles in the United States and the member countries of the Organisation of Economic Co-operation and Development is expected to keep global supply tight. "It will take a trifecta of events to derail this oil price rally: OPEC+ unexpectedly boosts output, warm weather hits the Northern Hemisphere, and if the Biden administration taps the strategic petroleum reserves," said Edward Moya, senior market analyst at OANDA. U.S. energy firms this week added oil and natural gas rigs for a sixth week in a row as soaring crude oil prices prompted drillers to return to the wellpad. The U.S. oil and gas rig count, an early indicator of future output, rose 10 to 543 in the week to Oct. 15, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday. The International Energy Agency on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day (bpd). That would result in a supply gap of around 700,000 bpd through the end of this year, until the Organization of the Petroleum Countries and allies, together called OPEC+, add more supply, as planned in January.

Oil futures finish higher, with prices up an 8th straight week - Oil prices extended their rise to multiyear highs on Friday, with U.S. and global benchmark crude scoring an eighth weekly gain in a row -- the longest such streak of gains for a front-month Brent contract in over two decades. Prices found support from expectations that global power producers will look to use oil, in place of natural gas and coal, amid shortages. Natural-gas futures, meanwhile, gave back Thursday's gain and then some, with prices down by nearly 5% Friday -- pulling prices lower for the week. "A massive shortage of coal and natural gas in Asia and Europe has left the power plants reluctantly having to choose crude oil over natural gas -- a pattern not seen for at least a decade," "This is a stark reversal of the foregone conclusion of natural gas being the preferred fuel for power generation worldwide," he said. "The current trend is so astonishing that energy analysts had even stopped modeling the possibility of using crude oil for power generation; yet here we are amidst this energy crisis." And "the increased oil demand from power producers further squeezes the already tight crude supplies," said Raj. West Texas Intermediate crude for November delivery rose 97 cents, or 1.2%, to settle at $82.28 a barrel, with front-month prices marking their highest finish since Oct. 21, 2014, according to Dow Jones Market Data. December Brent, the global benchmark, rose 86 cents, or 1%, to $84.86 a barrel on ICE Futures Europe after hitting a session high above $85. Prices ended the session at their highest since Oct. 9, 2018. Brent crude saw a weekly rise of 3%, up an eighth week in a row. That was the longest weekly streak of gains since the week ended April 30, 1999, according to Dow Jones Market Data. WTI, the U.S. benchmark, was up about 3.7% for the week, also up an eighth straight week -- the longest weekly winning streak since the week ended Aug. 20, 2004. . "So long as coal and natural gas shortage persists in Europe and Asia, crude oil prices have nowhere else to go but up." Even if oil prices climb over $100, "crude oil would be more economical than [natural] gas, therefore exerting upward pressure to oil prices," he said. Oil prices surged Thursday after the International Energy Agency noted a "massive" switch to crude by power generators as natural gas, liquefied natural gas and coal supplies shortages drag on. Prices finished below the session's best levels after U.S. government data showed a third-straight weekly rise in domestic crude inventories, the biggest since March. On Friday, data from Baker Hughes (BKR) suggested that increases in U.S. oil production are ahead, with the number of active U.S. oil drilling rigs up 12 at 445 this week, climbing for a sixth consecutive week. Meanwhile, November gasoline edged up by 2.1% to $2.486 a gallon, gaining 5.1% for the week, while November heating oil added 0.5% to $2.574 a gallon, for a weekly rise of 4%. November natural gas declined by 4.9% to $5.41 per million British thermal units, sending prices down 2.8% for the week.

Saudi Arabia .. “Bikini” and dance parties on a beach in Jeddah - Saudi young woman Asma can now spend the weekend with her boyfriend at a beach on the Red Sea coast in Jeddah, and even dance with him to the tunes of music at a night party on the sand that provides a “fun” time for the goers. “I am glad that I can come to a nearby beach and enjoy my time with various games and activities,” the 32-year-old told AFP, who wore a blue shirt over her wet swimsuit. Asma, who has dyed part of her hair yellow, said the experience provides “the ultimate in fun…a dream that we come here for a beautiful weekend” in the city that she knows is the most open in the country. Since Mohammed bin Salman, son of Saudi King Salman, became crown prince in 2017, the wealthy kingdom has undergone radical economic, social and religious reforms. Women were allowed to drive, music concerts were allowed, and the ban on mixing between men and women was ended. The powers of the Commission for the Promotion of Virtue and the Prevention of Vice were reduced and the Mutawwa’in disappeared from the streets. But these changes were also accompanied by a crackdown on critics, journalists, and opponents, especially human rights activists. The “Pure Beach” beach in King Abdullah Economic City (about 125 km south of Jeddah in the west of the country), which opened last August, provides a new and only experience in the kingdom, which has been known for decades to be very conservative. By day, patrons use the beach with unrestricted turquoise water and white sand, with women allowed to wear bikinis, smoke shisha, and have pets. Dance parties on Pure Beach in King Abdullah Economic City After sunset, Western music blares loudly from a stage set in the sand. In front of the stage, two lovers were dancing quietly, not caring about those dancing around them, among them a young man dancing topless, and another dancing in a short blue dress. Beach officials are not sure of the existence of a marriage relationship between every couple of the visitors, but they confiscate mobile phones and put them in plastic stockings to preserve the “privacy” of the visitors of the place, according to an official at the place. Asma stressed that “life has become normal” in Saudi Arabia because “it was not like that before.”

Lebanon suffers 24-hour blackout, food poisoning, business closures amid fuel crisis -- Lebanon suffered a total power outage over the weekend, leaving its population of 6 million without centrally generated electricity for 24 hours. The state electricity company said in a statement that the shutdown of the country's two main power stations, due to fuel shortages, had "directly affected the stability of the power network and led to its complete outage, with no possibility of resuming operations in the meantime." Power returned late Sunday after the central bank granted the energy ministry $100 million in credit to buy fuel and keep its plants operating. Officials had warned the outage was likely to last several days. The crisis is creating a nightmare for the country's residents, but has been a long time in the making. Gas shortages might sound familiar — the U.K. and the rest of Europe are in the throes of a mounting fuel crisis, which has induced panic-buying and erratic behavior among many who had never imagined facing such shortages. But for Lebanon, the same problem has been a reality for months — it's just another battle in the long list of crises that have left the country with multiple daily power outages, a banking and economic crisis, food shortages, overwhelmed hospitals, and a spiraling currency relying on volatile black market exchange rates. Walking through the capital Beirut — a once-thriving city often called the "Paris of the Middle East" — at any time of day, one can see shopfronts closed or operating in darkness, with those lucky enough to have access to fuel relying on backup generators to keep the lights on. When the power is out, many shopkeepers will refuse to sell anything but water, as the volatile minute-by-minute changes in the value of the Lebanese lira mean the price of goods can shift from one period of power to the next. And hundreds of businesses destroyed in the devastating Beirut Port explosion of August 2020 are permanently gone. With little help from the state, gutted bars and other businesses with their entrances blown open and innards full of debris remain fixtures on streets all over the city. "It's catastrophic," Rabih Daou, a small grocery store owner in Beirut's Geitawy district, told CNBC in late September from his shop, darkened during one of the country's many daily power outages. He pointed to empty refrigerator shelves, where only one small fridge was running, holding a few dairy products. "We cannot buy a lot of things. We cannot buy cheese and ham, we have to buy them by small pieces, because we don't always have electricity, and the people are always afraid," he added.

US to give humanitarian aid to Afghanistan, Taliban say - The United States has agreed to provide humanitarian aid to a desperately poor Afghanistan on the brink of an economic disaster, but refused to give political recognition to the country’s new rulers, the Taliban said on Sunday. The statement came at the end of the first direct talks between the former foes since the chaotic withdrawal of US troops at the end of August. The US statement was less definitive, saying only that the two sides “discussed the United States’ provision of robust humanitarian assistance, directly to the Afghan people”. The talks came as the US and Britain warned their citizens on Sunday night to stay away from hotels in the capital, Kabul, particularly the well-known Serena. “US citizens who are at or near the Serena hotel should leave immediately,” the US State Department said, citing security threats in the area. In an update to its advice not to travel to Afghanistan, the UK Foreign Office said: “In light of the increased risks you are advised not to stay in hotels, particularly in Kabul (such as the Serena Hotel).” The Serena is the best-known luxury hotel in Kabul, popular with foreign visitors before the city fell to the Taliban eight weeks ago. Australian soldiers Sapper James Martin, Lance Corporal Stjepan Milosevic, and Private Robert were killed as they played cards at a patrol base north of Tarin Kowt in August 2012. The Taliban said the talks held in Doha, Qatar, “went well”, with Washington freeing up humanitarian aid to Afghanistan after agreeing not to link such assistance to formal recognition of the Taliban. The United States made it clear that the talks were in no way a preamble to recognition of the Taliban, which swept into power on 15 August after the US-allied government collapsed. State department spokesman Ned Price called the discussions “candid and professional”, with the US reiterating that the Taliban would be judged on their actions rather than their words.

Soaring Prices of Imported LNG Threaten Pakistan's Economic Recovery --Soaring LNG prices are adversely affecting Pakistan's balance of payments and threatening the nation's post-COVID economic recovery. Pakistan's trade deficit has widened to nearly $12 billion in July-September 2021 quarter, up more than 100% from the same period last year. The nation's heavy reliance on expensive imported energy has been the main cause of prior balance of payments crises that have forced it to seek IMF bailouts more than a dozen times in the last 70 years. The average LNG price for November delivery into Northeast Asia was estimated at about $32 per metric million British thermal units (mmBtu), up nearly 20 percent from the previous week, according to the Peninsula Qatar publication. Price agency S&P Global Platts said on Thursday that its Japan-Korea-Marker, which is widely used as a benchmark for spot LNG contracts, rose to $34.47 per mmBtu. Rising LNG prices have forced power generating companies in Pakistan, Bangladesh and the Middle East to start switching fuels pushing oil prices higher. US crude closed above $80 for the first time since late in 2014, bringing its climb since the end of last October to 125%, according to the Wall Street Journal. The key to Pakistan managing its current accounts lies in reducing reliance on imported energy and dramatically increasing its exports. Pakistan already faces climate change pressures forcing it to change its energy mix to reduce the use of fossil fuels. Malik Amin Aslam, Pakistan Prime Minister Imran Khan's special assistant on climate change, said recently in an interview with CNN that his country is seeking to change its energy mix to favor green. He said Pakistan's 60% renewable energy target would to be based on solar, wind and hydro power projects, and 40% would come from hydrocarbon and nuclear which is also low-carbon. “Nuclear power has to be part of the country’s energy mix for future as a zero energy emission source for clean and green future,” he concluded