oil prices jumped to a six week high midweek as tropical storm Barry meandered thru the Gulf and forced the shut in of over half of US offshore production....after falling 1.6% to $57.51 a barrel after the OPEC output cut extension disappointed oil traders last week, prices for US crude for August delivery initially jumped nearly 2% on Monday on confirmation that Iran had breached the limit on enriched uranium set by the 2015 accord that had been abrogated by the US, but later pulled back to end with an increase of only 15 cents at 57.66 a barrel, as gains were limited by renewed concerns about a slowing global economy...prices again rose to as high as $59.10 a barrel on Iran tensions early Tuesday, but again fell back to end with a gain of just 17 cents at $57.83 a barrel as concerns over a slowdown in energy demand again kept prices in check...oil prices again opened more than 1% higher on Wednesday after the API had reported that U.S. crude supplies had fallen for a fourth week in a row, but then extended those gains after the EIA confirmed an even larger oil inventory drop and as major producers cut nearly a third of offshore Gulf production, with oil prices finishing $2.60, or 4.5% higher at $60.43 a barrel...the Gulf of Mexico storm and Iran tensions pushed prices to another six-week high at $60.94 a barrel on Thursday before prices fell back to close 23 cents lower at $60.20 a barrel, as OPEC forecast lower demand for its crude oil next year as the U.S. & others lifted production...oil prices rose back to near six-week highs on Friday morning, as Gulf of Mexico oil producers cut more than half their output in the face of tropical storm Barry, but faded again in the afternoon to end just a penny higher at $60.21 a barrel, as concerns over a global crude surplus in the months ahead again limited gains...nonetheless, oil prices still ended nearly 5% higher for the week, as falling inventories, the tropical storm and geopolitical tensions all worked to push prices higher..
natural gas prices also ended higher, as weather forecasts shifted to show widespread heat dominating the Midwest and East over the next couple of weeks, and expectations that hurricane Barry would impact production also pushed prices higher...after finishing the prior week nearly 5% higher at $2.418 per mmBTU, natural gas for August delivery first slipped 1.5 cents on Monday, then rose 2.2 cents on Tuesday and 1.9 cents on Wednesday as the 8 to 14 day forecasts heated up, before falling 2.8 cents on Thursday after the EIA's natural gas storage report showed no surprises....prices then rose 3.7 cents on Friday with Barry bearing down to end the week at $2.453 per mmBTU, 1.4% higher than the prior week's close...
the natural gas storage report for the week ending July 5th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 81 billion cubic feet to 2,471 billion cubic feet by the end of the week, which meant our gas supplies were 275 billion cubic feet, or 12.5% more than the 2,196 billion cubic feet that were in storage on July 6th of last year, while still 142 billion cubic feet, or 5.4% below the five-year average of 2,613 billion cubic feet of natural gas that have been in storage as of the 5th of July in recent years....this week's 81 billion cubic feet injection into US natural gas storage was in line with expectations of an 80 billion cubic feet injection into storage, but was still higher than the average 71 billion cubic feet of natural gas that have been added to gas storage during the first week of July in recent years, the 17th consecutive such above average storage change....the 1,283 billion cubic feet of natural gas that have been added to storage over the past 15 weeks has been the largest injection of gas into storage on record for any similar period of the injection season, as the 1,128 billion cubic feet that were added during the same 15 weeks of 2014 (when June was also unusually cool) is the only year that's even close...
The Latest US Oil Supply and Disposition Data from the EIA
this week's US oil data from the US Energy Information Administration, reporting on changes over the week ending July 5th, indicated that a larger than expected withdrawal of oil from our stored crude supplies, the 7th withdrawal in 15 weeks, resulted in a major shift in unaccounted for crude from the supply side of the balance sheet to the demand side...our imports of crude oil fell by an average of 284,000 barrels per day to an average of 7,302,000 barrels per day, after rising by an average of 920,000 barrels per day over the prior week, while our exports of crude oil rose by an average of 58,000 barrels per day to 3,048,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,254,000 barrels of per day during the week ending July 5th, 342,000 fewer barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was reported to be 100,000 barrels per day higher at 12,300,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,554,000 barrels per day during this reporting week..
meanwhile, US oil refineries were reportedly using 17,438,000 barrels of crude per day during the week ending July 5th, 148,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that an average of 1,357,000 barrels of oil per day was being withdrawn from the supplies of oil stored in the US....hence, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 472,000 barrels per day more than what our oil refineries reported they used during the week...to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (-472,000) 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 fudge factor that they label in their footnotes as "unaccounted for crude oil"...since the prior week's unaccounted for crude was at +350,000 barrels per day, indicating unaccounted for supply, the week over week metrics we've just reported are undependable to the tune of 812,000 barrels per day..(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) indicated that the 4 week average of our oil imports fell to an average of 7,253,000 barrels per day last week, 12.3% less than the 8,271,000 barrel per day average that we were importing over the same four-week period last year...the 1,357,000 barrel per day decrease in our total crude inventories was all pulled out of our commercially available stocks of crude oil, while the amount of oil stored in our Strategic Petroleum Reserve remained unchanged...this week's crude oil production was reported to be 100,000 barrels per day higher at 12,200,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,900,000 barrels per day, while Alaska's oil production was statistically unchanged at 426,000 barrels per day....last year's US crude oil production for the week ending July 6th was rounded to 10,900,000 barrels per day, so this reporting week's rounded oil production figure was roughly 12.8% above that of a year ago, and 45.9% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...
meanwhile, US oil refineries were operating at 94.7% of their capacity in using 17,438,000 barrels of crude per day during the week ending July 5th, up from 94.2% of capacity the prior week, and a fairly normal refinery utilization rate for this time of year....however, the 17,438,000 barrels per day of oil that were refined this week were still 1.2% below the 17,652,000 barrels of crude per day that were being processed during the week ending July 6th, 2018, when US refineries were operating at 96.7% of capacity....
with the increase in the amount of oil being refined, gasoline output from our refineries was much higher, increasing by 470,000 barrels per day to 10,418,000 barrels per day during the week ending July 5th, after our refineries' gasoline output had inexplicably decreased by 564,000 barrels per day the prior week....but even with that large jump in gasoline output, this week's gasoline production was still 2.6% less than the record 10,699,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) rose by 22,000 barrels per day to 5,358,000 barrels per day, after our distillates output had increased by 31,000 barrels per day the prior week....and even with this week's increase, the week's distillates production was still 1.5% less than the 5,442,000 barrels of distillates per day that were being produced during the week ending July 6th, 2018....
even with the big increase in gasoline production, our supply of gasoline in storage at the end of the week fell for the 4th week in a row and for the 16th time in twenty weeks, decreasing by 1,455,000 barrels to 229,187,000 barrels over the week to July 5th, after our gasoline supplies had decreased by 1,583,000 barrels over the prior week....our gasoline supplies continued to fall because the amount of gasoline supplied to US markets increased by 262,000 barrels per day to 9,754,000 barrels per day, and because our exports of gasoline rose by 137,000 barrels per day to 700,000 barrels per day, even while our imports of gasoline rose by 335,000 barrels per day to 871,000 barrels per day...after our gasoline supplies had reached an all time record high twenty-two weeks ago, they then fell by nearly 13% over the next 10 weeks while US Gulf Coast refineries were crippled by the Venezuelan sanctions, and hence they are still 4.1% lower than last July 6th's inventory level of 238,997,000 barrels, while slumping back to near the five year average of our gasoline supplies at this time of the year...
with the increase in our distillates production, our supplies of distillate fuels rose for the 6th time in the past 17 weeks, increasing by 3,729,000 barrels to 130,517,000 barrels during the week ending July 5th, after our distillates supplies had increased by 1,408,000 barrels over the prior week...our distillates supplies jumped this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 277,000 barrels per day to 3,551,000 barrels per day, and because our imports of distillates rose by 83,000 barrels per day to 181,000 barrels per day, while our exports of distillates rose by 50,000 barrels per day to 1,455,000 barrels per day...after this week's inventory increase, our distillate supplies were 7.3% higher than the 121,682,000 barrels of distillate that we had stored on July 6th, 2018, even as they remained 5% below the five year average of distillates stocks for this time of the year...
finally, with lower oil imports and greater refinery throughput, our commercial supplies of crude oil in storage fell for a fourth week in a row and for the tenth time in 25 weeks, decreasing by 9,499,000 barrels, from 468,491,000 barrels on June 28th to 458,992,000 barrels on July 5th...but even with that decrease, our crude oil inventories remained roughly 4% above the recent five-year average of crude oil supplies for this time of year, and roughly 35% higher than the prior 5 year (2009 - 2013) average of crude oil stocks for the end of June, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories have generally been rising this year, & since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of July 5th were still 13.2% above the 405,248,000 barrels of oil we had stored on July 6th of 2018, but at the same time were 7.3% below the 495,350,000 barrels of oil that we had in storage on July 7th of 2017, and 7.0% below the 493,718,000 barrels of oil we had stored on July 8th of 2016...
OPEC's Monthly Oil Market Report
next we're going to review OPEC's July Oil Market Report (covering June OPEC & global oil data), which was released on Thursday of this past week and is available as a free download, and hence it's the report we check for monthly global oil supply and demand data...the first table from this monthly report that we'll look at is from the page numbered 63 of that report (pdf page 73), 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 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 thus avert any potential disputes that could arise if each member reported their own figures...
so, as we can see from this table of oil production data, OPEC's oil output fell by 68,000 barrels per day to 29,830,000 barrels per day in June, from their revised May production total of 29,898,000 barrels per day...however that May figure was originally reported as 29,876,000 barrels per day, so that means their production for June was really a 46,000 barrel per day decrease from the previously reported figures (for your reference, here is the table of the official May OPEC output figures as reported a month ago, before this month's revisions)...
the largely involuntary Iranian output reduction of 142,000 barrels per day due to US sanctions on their exports was the primary reason for the cartel's output cut in June, as relatively smaller production cuts by Angola, by Iraq, by Kuwait, by Algeria and by Libya were more than offset by increases in output from Nigeria and the Saudis...however, that 129,000 barrels per day increase in the output from Nigeria that you see above now puts them well over the output allocations originally determined for each member after their December 7th, 2018 meeting, when OPEC agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers, and which were extended at their July 1st meeting a few weeks back...in addition, despite the small June decrease in output from Iraq, their output also remains well above quota, as can be seen in the table of OPEC production allocations we've included below:
the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, and it shows average daily production quota in millions of barrels of oil per day for each of the OPEC members as was agreed to at their December 2018 meeting and has now been extended through March 2020...note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by a civil war, are exempt from any production quotas, and that only Libya has been producing more than they did in the 4th quarter of 2018, as you can see in the third column of the OPEC production table above...
the next graphic from the report that we'll include shows us both OPEC and world oil production monthly on the same graph, over the period from July 2017 to June 2019, and it comes from page 64 (pdf page 74) of the July OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC 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...
despite the decrease in OPEC's production from what they reported a month ago, their preliminary estimate indicates that total global oil production still rose by 0.47 million barrels per day to 98.56 million barrels per day in June, an increase that came after May's total global output figure was revised down by 170,000 barrels per day from the 98.26 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 540,000 barrels per day in June after that revision, with higher oil output from the US, Brazil, Kazakhstan, Russia and China the major reasons for the non-OPEC production increase.... the 98.56 million barrels per day produced globally in June was still 0.71 million barrels per day, or 0.7% higher than the revised 97.85 million barrels of oil per day that were being produced globally in June a year ago (see the July 2018 OPEC report (online pdf) for the originally reported June 2018 details)...with the decrease in OPEC's output, their June oil production of 29,830,000 barrels per day slipped to 30.3% of what was produced globally during the month, down from the revised 30.5% share they contributed in May....OPEC's June 2018 production was reported at 32,327,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year's total and new member Congo from this year's, are now producing 2,225,000 fewer barrels per day of oil than they were producing a year ago, when they accounted for 33.0% of global output, with a 1,575,000 barrel per day drop in output from Iran, a 607,000 barrel per day decrease in the output from Saudi Arabia, and a 606,000 barrel per day decrease in the output from Venezuela from that time more than offsetting the year over year production increases of 405,000 barrels per day from Libya, 185,000 barrels per day from Iraq, and 186,000 barrels per day from the Emirates...
despite the 470,000 barrels per day increase in global oil output that was seen during June, there was still a large shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...
the table above came from page 33 of the July OPEC Monthly Oil Market Report (pdf page 43), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2019 over the rest of the table...on the "Total world" line in the third column, we've circled in blue the figure that's relevant for June, which is their revised estimate of global oil demand during the second quarter of 2019...
OPEC has estimated that during the 2nd quarter of this year, all oil consuming regions of the globe have been using 99.24 million barrels of oil per day, which was unrevised from their estimate for the 2nd quarter a month ago....meanwhile, 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 still only producing 98.56 million barrels per day during June, which means that there was a shortfall of around 680,000 barrels per day in global oil production when compared to the demand estimated for the month...
in addition, the downward revision of 170,000 barrels per day to May's global output that's implied in this report means that the 980,000 barrels per day shortfall that we had originally figured for May based on last month's figures would now have to be revised to a deficit of 1,150,000 barrels per day during May....combined with the deficit of 1,020,000 barrels per day that we had previously figured for April, that means that for the 2nd quarter of 2019, global oil production has been running around 950,000 barrels per day short of what's need to cover demand....while those deficits follow a first quarter that saw surpluses of 550,000 barrels per day for January, 640,000 barrels per day in February, and 190,000 barrels per day for March, note that in the 4th column above, global demand during the 3rd quarter, or summertime in the northern hemisphere, is expected to increase by 1,370,000 barrels per day to 100.61 million barrels of oil per day...that means that unless there is an unexpected pickup in oil production from the non-OPEC countries, the third quarter will be seeing oil output deficits near or above 2 million barrels of oil per day, or roughly 2% of total demand....
This Week's Rig Count
the US rig count fell for the 18th time in 21 weeks during the week ending July 12th, and is now down by 11.5% for the year....Baker Hughes reported that the total count of rotary rigs running in the US fell by 5 rigs to a 17 month low of 958 rigs this past week, which was also down by 96 rigs from the 1054 rigs that were in use as of the July 13th report of 2018, and quite a bit below the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...
the count of rigs drilling for oil fell by 4 rigs to 784 rigs this week, which was also 79 fewer oil rigs than were running a year ago, and less than half of the recent 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 decreased by 2 rigs to 172 natural gas rigs, which was also down by 17 rigs from the 189 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on August 29th, 2008...however, another rig classified as miscellaneous was began drilling this week and hence there are now two such active, matching the "miscellaneous rig" count of a year ago...
the rig count in the Gulf of Mexico increased by 2 to 26 rigs this week, as two more rigs began drilling off the coast of Louisiana...that means there are now 24 rigs drilling offshore from Louisiana and 2 rigs deployed offshore from Texas, an increase of 7 offshore rigs from the 19 rigs that were deployed in the Gulf in the same week a year ago, when 17 rigs were drilling in Louisiana waters and two were deployed offshore from Texas...on the other hand, one of the 3 platforms that had been drilling through inland waters in southern Louisiana was shut down this week, leaving two still active, down from the 5 "inland waters" rigs that were drilling in Louisiana on July 13th 2018...
the count of active horizontal drilling rigs was down by 8 to 831 horizontal rigs this week, which was the least horizontal rigs deployed since February 9th, 2018 and hence a new 17 month low for horizontal drilling...it was also 99 fewer horizontal rigs than the 930 horizontal rigs that were in use in the US on July 13th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the vertical rig count was down by 1 rig to 57 vertical rigs this week, but those were still up by 1 from the 56 vertical rigs that were operating during the same week of last year....on the other hand, the directional rig count was up by 4 rigs to 70 directional rigs this week, and those were also up from the 68 directional rigs that were in use on July 13th of 2018...
the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the second table 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 July 12th, the second column shows the change in the number of working rigs between last week's count (July 5th) and this week's (July 12th) count, the third column shows last week's July 5th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the equivalent 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 6th of July, 2018...
as you can see, this week's rig reductions were concentrated in Texas, in both the Eagle Ford and the Permian basins within Texas...in the Permian, 3 horizontal rigs were pulled out of Texas Oil District 8, which would be the core Permian Delaware, and 3 more were pulled out of Texas Oil District 7C, or the southern Permian Midland...meanwhile, 4 oil rigs and one targeting natural gas were pulled out of the Eagle Ford of southeast Texas, which left 60 oil rigs and 6 natural gas rigs still active in that basin...at the same time, oil targeting rigs were added in the Cana Woodford of central Oklahoma and the DJ Niobrara chalk of the Rockies front range, while a natural gas rig was added in the Haynesville on the Texas side of the border, as the northern Louisiana rig count was unchanged while Texas Oil District 6 saw a one rig increase...meanwhile, two more natural gas rigs were shut down in "other" basins not tracked separately by Baker Hughes...
Ohio reports quarterly increases in oil, natgas production - - First-quarter 2019 was very productive in Ohio in terms of crude oil and natural gas production, Kallanish Energy reports. Crude oil production jumped 28.7%, to more than 5.07 million barrels (Mmbbl). That’s up from 3.94 Mmbbl in the first quarter of 2018, according to production data released last Friday by the Ohio Department of Natural Resources. Natural gas production in Ohio also increased in Q1 2019, growing from 531.95 billion cubic feet (Bcf), to 609.45 Bcf, a 14.57% increase from Q1 2018. The data covers production from 2,277 horizontal shale wells in three Ohio rock formations. Of those wells, 2,228 reported production of oil and/or natural gas, the state said. The typical well produced 2,277 barrels (Bbls) of oil and 273.54 million cubic feet (Mmcf) of natural gas in Q1 2019. Ohio law does not require the separate reporting of condensate and natural gas liquids. They are included in the oil/natural gas totals. The results are available at https://oilandgas.ohiodnr.gov/production.
- DRILLED: 249 (240 as of last week)
- DRILLING: 165 (173)
- PERMITTED: 481 (481)
- PRODUCING: 2,225 (2,223)
- TOTAL: 3,120 (3,117)
- Three horizontal permits were issued during the week that ended July 6, and 17 rigs were operating in the Utica Shale.
Dominion Energy Pulls the Plug on Gas Pipeline Project in Ohio - Dominion Energy has decided not to push forward with its $48 million pipeline project bringing Marcellus Shale natural gas from Pennsylvania to market in Eastern Ohio. Dubbed "The Sweden Valley Project," the company cited a protracted approval process at the Federal Energy Regulatory Commission (FERC) as its reason for pulling the plug.In a letter to FERC, Dominion said that the environmental assessment issued last August concluded "if Dominion constructs and operates the proposed facilities in accordance with its application and supplements, and the staff's recommended mitigation measures below, approval of the Project would not constitute a major federal action significantly affecting the quality of the human environment."Nonetheless the positive assessment did not add any wind to Dominion sails, leading to a situation where the company will not be able to meet contractual demands for its gas.Don Santa, a former FERC commissioner, said in an email that "in many cases, pipeline applicants request decision dates in order to be able to meet construction schedules and fulfill contractual obligations to the shippers who will transport natural gas using the newly constructed pipeline capacity." Neil Chatterjee, FERC Chairman, reacted to the news on Twitter on Friday afternoon, saying he was "deeply disappointed that the unique circumstances of this case prevented the Commission from approving the project as quickly as the applicant had hoped, and that, as a result they are withdrawing the application."
Ask the Doctors: Study links fracking to low birth weight - Dear Doctor: Fracking just started near my Ohio hometown, and I remember reading about a connection to the risk of having a baby with low birth weight. I want to get pregnant, but now I'm worried. How close do you have to be to a site to be affected? Dear Reader: "Fracking" is the common term for hydraulic fracturing, a drilling process that pumps fluid at ultra-high pressure deep into the earth. There has been no end of controversy regarding the process in recent years, with vigorous debate over whether or not fracking causes air pollution, contaminates surface and groundwater, leads to earthquakes and plays a role in a range of health problems. Among the health questions that have been raised is whether the process affects birth weight among pregnant women who live near fracking sites.Your question refers to a study published a few years ago in the journal Science Advances. The researchers, including one from UCLA, analyzed the outcomes of 1.1 million live births in Pennsylvania between 2004 and 2013. They compared the birth weights of infants born to mothers living at varying distances from active fracking sites, both before the extraction operations had begun, and after the wells became active. They found that women who lived very close to an active fracking operation -- within one-half mile -- had a 25 percent higher risk of delivering a baby of low birth weight than did women who lived at a distance of 2 miles or more. The study found that babies born to women who lived more than one-half mile from a fracking site, but less than 2 miles away, were also adversely affected, but to a lesser degree. When researchers looked at women who lived at least 2 miles from a fracking operation, they found no signs of adverse health effects to newborns. Low birth weight occurs most often in premature births, when the infant doesn't have the full 37 weeks of gestation to grow and gain weight. Low birth weight is sometimes seen in full-term babies who failed to grow well during gestation due to issues with the mother's health, the placenta or the baby's condition.
Analysts say Philadelphia refinery, shut down after fire, unlikely to find a willing buyer -- More than 1,000 people will be out of work once Philadelphia Energy Solutions’ refinery closes its doors this month. The closure comes in the wake of an explosion and fire that destroyed a crucial part of the plant. But despite pleas from the union, and comments from former Congressman Bob Brady, who told Plan Philly he thought the plant was “too big to fail,” industry analysts say finding a buyer who will keep it as a refinery will be next to impossible.“This facility was significantly less sophisticated than the other East Coast refineries,” said Phil Verleger, an economist and industry consultant. “It could barely hang on in a strong market. Once the export ban was gone, it couldn’t survive.”When the shuttered Sunoco refinery was revived in 2012 with the help of Brady, the Obama Administration and state grants, its new owner The Carlyle Group took advantage of cheap North Dakota crude oil traveling to Philadelphia by rail. One reason the Bakken crude was so cheap, Verleger said, is because an export ban meant producers couldn’t fetch a better price overseas. When that was lifted, he said, the PES refinery’s days were numbered.PES filed for bankruptcy in early 2018, citing the rising costs of the Renewable Fuel Standard, a program that forces refiners that don’t blend ethanol to buy credits on the open market.Verleger calls that claim a “fraud.” Nevertheless, the bankruptcy judge allowed the company to retire 138 million outstanding RFS credits.This February, six months after exiting bankruptcy, Reuters reported the plant was again in bad financial shape. In just three months, its cash balance had fallen from $148 million to $87.7 million by the end of 2018. In May, Reuters reportedthe company had deferred payments into employee retirement accounts.Verleger said it doesn’t help that investors aren’t eager to buy refineries these days, let alone one that had already fallen on hard times before the fire and explosion. “Nobody’s going to find the money any place,” Verleger said. “The energy sector right now represents 5 percent of the S&P 500. In 1980 it was at its peak at 20 percent of the S&P 500. Essentially the energy sector is being shunned by investors.”
Philadelphia Explosion One in String of ‘Near Miss’ Accidents at Refineries Using Deadly Chemical - Next Friday, July 12, the Philadelphia Energy Solutions (PES) refinery in south Philadelphia is slated to close its doors, marking the end of an era that began in 1866, one year after the Civil War ended, when 50,000 barrels of kerosene and chemicals were first stored on site.The plant — which continued to struggle financially after emerging from bankruptcy in August 2018 — experienced a major industrial accident on June 21. That morning, a massive fireball lit up the pre-dawn sky over Philadelphia after leaking hydrocarbon gas had ignited. Five workers were injured, all treated on site. Three explosions shook walls in Philadelphia and the blast was reportedly felt as far away as South Jersey. Emerging evidence suggests that the disaster could have been far more severe — in large part due to a deadly chemical used at the PES refinery and roughly 50 others nationwide.Hydrogen fluoride (HF) is one of the most dangerous chemicals used by industry. When released, it forms rolling clouds that cling low to the ground and can spread rapidly over long distances. On the skin, HF burns and causes ulcers. Mixed with water, it forms hydrofluoric acid. Inhaled into the lungs, it can cause a range of harms, from cough to lung collapse to the deadly destruction of organs and bones. Breathing the gas for as little as five minutes can cause death within “a couple of hours,” according to the University of North Carolina at Chapel Hill. Symptoms can be immediate or delayed for days.“Aging refineries are playing Russian roulette with American population centers,” said Tim Whitehouse, a former enforcement attorney with the U.S. Environmental Protection Agency (EPA), in a statement, noting that more than 22 million people in the U.S. live near sites usingHF. “Counting Philadelphia, three refineries using HF have had major explosions just since 2015, hardly cause for continued complacency.”
Report: Pennsylvania had record year for natural gas production - Pennsylvania had a record year for natural gas production in 2018, the state Department of Environmental Protection said on Wednesday.Unconventional well operators produced 6.1 trillion cubic feet of natural gas in 2018 — an increase of .8 trillion cubic feet over 2017 and the largest volume of natural gas produced in Pennsylvania in a single year, according to DEP’s 2018 Oil & Gas Annual Report.Pennsylvania is the second-largest natural gas producer in the United States, after Texas.Unconventional wells are those that access large reservoirs of underground natural gas through hydraulic fracturing, or fracking. The first unconventional natural gas well was drilled in Pennsylvania in 2004, according to DEP.Since then, production levels have steadily risen, requiring more permitting and inspection activities from DEP.DEP Secretary Patrick McDonnell said Wednesday that the agency’s internal restructuring and continued expansion of electronic tools has increased permitting and inspection efficiency, shortened waiting periods and improved oversight of natural gas producers. “Gov. (Tom) Wolf and DEP have made permitting and inspection efficiency a priority — reducing overall permit backlog by more than 90% since 2016 and improving inspection efficiency while ensuring compliance with our environmental regulations,”
The “Beast” is back, baby! -- Rig counts have doubled in Pennsylvania — up from about 30 at the beginning of the year to 61 in June. Gas production in the basin has jumped from hundreds of millions of units per well a few years ago to billions of units of gas per well this year. With gas production rising to over 18 Bcf/d, Pennsylvania now produces over 20% of the natural gas in the U.S., second only to Texas, which tops out at 22 Bcf/d. In the 10 years since a shale boom skyrocketed in the Marcellus shale play, Pennsylvania’s natural gas production has increased by a monstrous 32-fold. Part of the “uproar” in gas production can be attributed to cost-saving innovations and greater efficiencies in drilling and in the technology being deployed down hole, which helps operators improve their margins and pull a lot more gas out of the well bores with each individual rig. Some of these advancements include: more wells per pad; drilling longer laterals — up to three miles long; sensors that determine how far hydrofracturing is penetrating the shale for more accurate well spacing; sensors that track temperatures, pressure and vibration on equipment down hole; and advanced software that can predict when equipment needs servicing before it breaks down. Another important factor driving the production of natural gas is its increasing use for power generation — the chief use of natural gas in the U.S. In 2018, natural gas-fired power plants surpassed coal-fired plants across the country. The Energy Information Administration forecast the share of U.S. total utility-scale electricity generation from natural gas-fired power plants to rise from 35% in 2018 to 38% in 2020. Nearly 30 new power plants, each with a capacity of 475-megawatts or more, are now in operation, under construction or in the permitting process in Ohio, Pennsylvania and West Virginia.
Trespass Charges Dropped Against Atlantic Sunrise Pipeline Protesters | WSKG – A Lancaster County judge on Monday dismissed trespassing charges against seven protesters who blocked construction of the Atlantic Sunrise natural gas pipeline almost two years ago. Judge Howard Knisely of the Lancaster County Court of Common Pleas released the defendants without charge after the district attorney dropped the misdemeanors in exchange for community service. Marie Cusick/StateImpact Pennsylvania The judge welcomed the agreement and said peaceful, nonviolent protest is protected, albeit with limitations, by state and federal law. Legislatures, not the courts, are the proper place to protect the natural environment and public safety, he said. But he urged citizens to elect lawmakers who truly represent public interests rather than their own. “We must all be more vigilant to elect to those legislative positions persons who are highly concerned with their local constituents and local problems, and not those who merely look for personal advancement or who look to industry to fill their coffers for re-election,” he said in court Monday. The pipeline, which went into service in September 2018, carries natural gas south from the Marcellus Shale through 10 Pennsylvania counties. It has stirred significant opposition in Lancaster County.
Should We Be Afraid of the Mariner East Pipeline? -- Neighbors described it like this: a loud hissing noise. A massive ball of fire. A jet, or a meteor, crashing into the earth. Night turning into day. On September 10, 2018, a section of the Revolution Pipeline — which had begun carrying natural gas just a week earlier — leaked and ignited in rural Beaver County, Pennsylvania, northwest of Pittsburgh. The rupture shot flames 150 feet into the air, destroying one house, collapsing several overhead power lines, and forcing the evacuation of nearly 50 residents.Fortunately, no one was injured; the couple who lost their home had fled in the nick of time.But for residents living along the thousands of miles of natural gas pipelines in Pennsylvania — second only to Texas as the nation’s largest producer of the fossil fuel and home to the newly booming, energy-rich Marcellus Shale region — the fire and the charred earth it left behind serve as a haunting reminder: Something like this could happen in our backyards. That dread is perhaps nowhere more evident than 300 miles southeast of Beaver County, in the dense suburban neighborhoods west of Philadelphia, a city that energy industry leaders have, in the past decade, eyed as a global processing and trading hub. Here, tensions surrounding the cross-state Mariner East pipelines — a project much larger than Revolution and owned by the same parent company, Dallas-based Energy Transfer — are only intensifying. The pipelines (Mariner East 1 and 2 and the not-yet-completed 2x) carry highly compressed natural gas liquids. Once they are fully operational along a 350-mile route from their Marcellus Shale source to a revitalized former oil refinery in Marcus Hook, they promise to be vastly lucrative for Energy Transfer — and for the state, which, the company boasts, could see an economic impact of more than $9 billion from the project. But since work began in February 2017, Mariner East has been plagued by nearly 100 state Department of Environmental Protection violations, multiple sinkholes, service shutdowns and construction chaos. Glaring gaps in state regulatory oversight have been exposed, and opposition has grown into significant pushback from neighbors and a bipartisan group of lawmakers who say Pennsylvania communities are at risk of — and unprepared for — a potential pipeline disaster. In the meantime, those at the heart of the Mariner East conflict zone live in fear of an incident like Beaver County’s — or worse.’
Manchin asks DOE officials for update on Appalachian Storage Hub - U.S. Senator Joe Manchin questioned officials from the U.S. Department of Energy for an update on theAppalachian Storage Hub on Tuesday.Manchin, a Ranking Member of the Senate Energy and Natural Resources Committee, heard testimony on eleven bipartisan bills before the Committee including one that would require a study by the DOE on the benefits of the hub. Manchin is the sponsor of the proposedAppalachian Energy for National Security Act, S. 1064, which would require the study and report on the national security benefits of the proposed natural gas liquids storage hub in Appalachia. During questioning, Manchin said he has been in talks with U.S. Secretary of Energy Rick Perry about his bill and the hub. “I’ve talked with Secretary Perry and he’s seen the model of a class 5 hurricane coming up the Houston Channel and what it can do to cripple the energy of our country and the dependency we have,” he said.“So we are looking for a backup. West Virginia, Pennsylvania, Ohio, with all of the energy we have stored there and the protection of the mountains among everything else – it’s a natural hub.” Shawn Bennett, Deputy Assistant Secretary for Oil and Gas, Office of Fossil Energy at the U.S. Department of Energy, answered Manchin’s question about President Trump’s Executive Order to examine the Appalachian region as a candidate for economic development in the nation’s petrochemical sector.“Secretary Perry has been very fond of talking about creating a petrochemical complex storage hub in the region because he recognizes the importance from an economic security standpoint,” Bennett said. Manchin also stressed to the entire room just how large of a role that West Virginia plays in the energy industry. “We are heavily coal industry. We have an ocean of natural gas under us with properties in propane, ethane, and butane. We have been blessed but also we have a lot of wind which we are taking advantage of and solar is coming in,” Manchin said.
Standing Their Ground in the Path of the MVP - Construction continues on the Mountain Valley Pipeline in southwest Virginia, but several challenges to it remain unresolved. One that is still up in the air-- tree sitting protestors in Elliston. They’ve managed to hold their ground in an encampment along its route for almost a year, preventing construction, at least for now, in one small mountain hollow. There’s been a loud silence since last winter when the Mountain Valley Pipeline company asked federal Judge Elizbeth Dillon to remove protestors camping out on a steep ravine in the path of the pipeline. Tammy Belinski is an environmental lawyer who has been following the legal challenges. “The absence of a ruling so far, in my view, means that she doesn’t have a way to rule in Mountain Valley Pipelines’ favor.” Belinksy points out Judge Dillon has consistently ruled in favor of the pipeline companies on eminent domain cases, that’s when the government can legally take people’s private land for public use and must compensate landowners when they do. Belinksy believes the laws have long been written to favor pipeline companies. “I have incredible respect for the young people who are taking this matter into their own hands because they see the regulatory system isn’t working," Belinsky says. "They see that no one is protecting their future, no one is protecting their water, no one is protecting their air, so, they’re doing it.” Higher up on the mountain, tree sitters have been taking turns at the site known as ‘Yellow Finch,’ standing, sitting and sleeping in the trees. “It's one thing to walk in a protest line,” says Crystal Mello. She spent a weekend in the tree to give the long-haul sitter a break. She enjoyed it. The experience gave Mello a perspective on what the long-time sitters go through. “It was hot the day I went up but, (over the past year) there’s been snowstorms and floods and a lot of wild weather. These tree sitters are very resilient.” Mello lives nearby and helps support the sitters, as do a couple dozen or more people from the region. They say they’ve had visitors from all over the country, and beyond. But the hardcore live-ins, the ones who have given up their ‘other lives’ to live on-site, are a dedicated, determined, and quiet crowd. Most don’t want to call attention to themselves, only their cause.
Powerless: The high cost of cheap gas - CBS News (documentary from ProPublica) When the U.S. declared the discovery of natural gas reserves large enough to propel the country to energy independence, property owners in West Virginia could never have imagined how that discovery might affect them. CBSN Originals and ProPublica traveled to West Virginia's "gas patch" to meet landowners Beth Crowder and David Wentz, a once-married couple who found themselves in the crosshairs of Big Gas and joined forces to fight back.
A resolution condemning pipeline challengers passed easily in the WV House. A pipeline lobbyist wrote it. - It was getting late on March 7 in the West Virginia House of Delegates chamber.There were only two days left in the 60-day legislative session, and lawmakers had been voting for hours. By 8:30 p.m., delegates had moved past bills and onto resolutions — measures that don’t become law but express the legislative body’s sentiment. But one resolution seemed different from the others, Delegate Evan Hansen, D-Monongalia, said. He asked that House Resolution 11, titled “Recognizing the importance of the Atlantic Coast Pipeline,” be read and voted on separately. House Resolution 11, sponsored by nearly half the delegates, praised the Atlantic Coast Pipeline, a major natural gas project. Then, the resolution sharply condemned the citizens’ groups that challenged the project in court, calling their legal challenge an “all-out assault” with the goal of “forcing its cancelation.”The resolution passed 80-17.What wasn’t mentioned on the House floor that night was that the resolution was drafted by the pipeline company itself. Bob Orndorff, a lobbyist for Dominion Energy, wrote the resolution and sent it to the House of Delegates, according to documents obtained through a public records request filed by the Charleston Gazette-Mail with the clerk of the House of Delegates. At the end of January, as the resolution was being drafted, Orndorff took five Republican delegates -- Eric Nelson, R-Kanawha; Jason Harshbarger, R-Ritchie, who works for Dominion Energy; Scott Cadle, R-Mason; John Hott, R-Grant; and Chris Phillips, R-Barbour -- out to dinner at Fazio’s, an old-style Italian restaurant in Charleston, according to a disclosure filed with the West Virginia Ethics Commission. The bill: $575. All of those delegates would sponsor House Resolution 11, which was introduced one week later. Then, the day before the resolution passed on the floor, Orndorff, the West Virginia Oil and Natural Gas Association, and Antero Resources, the state’s largest gas producer, hosted a luncheon that cost $830 for the House Energy Committee, in the office of Delegate Bill Anderson, R-Wood, the resolution’s lead sponsor and chairman of the committee, another disclosure filing shows. On the floor the night the resolution passed, Anderson called natural gas pipelines “absolutely necessary.” It’s not abnormal for a lobbyist to provide insight or help draft legislation. But Orndorff’s resolution was different from other pieces of legislation because it singled out a specific group. It sheds light on the close relationship between West Virginia’s growing natural gas industry and its legislative branch, as the Gazette-Mail and ProPublica chronicled last year.
Regulators ask Mountain Valley Pipeline developers about the safety about the safety of pipe's coating - A federal agency is asking Mountain Valley Pipeline officials about the safety of a protective coating on the 42-inch diameter steel pipe being buried through West Virginia and Southwest Virginia. Delays in construction of the natural gas pipeline have led to some sections of pipe being stored above ground for more than a year, generating concerns that the coating could degrade over time and contaminate nearby air, soil and water. In a letter Wednesday to Mountain Valley’s corporate attorney, the Federal Energy Regulatory Commission requested “toxicological, environmental and health information” on a coating used to prevent corrosion of the pipe. Tina Smusz, a retired physician from Montgomery County, has been sounding the alarm on what she calls “serious unanswered questions” about the coating, 3M Scotchkote Fusion Bonded Epoxy 6233. “The health and lives of citizens in Virginia and West Virginia, and those yet to be born, depend on your conscientious oversight of energy projects,” Smusz wrote in a Jan. 23 letter to FERC. In March, State Health Commissioner Norman Oliver and Department of Environmental Quality director David Paylor wrote a joint letter to the commission, citing concerns from the public in requesting information about any hazards posed by the coating. That in turn led FERC, the lead agency overseeing construction of the 303-mile pipeline, to ask Mountain Valley for a report on “the toxicity of the FBE [fusion-bonded epoxy] from all potential exposure pathways.” Concerns about the coating are twofold: Exposure to the elements could cause the substance to break down in a process called “chalking,” releasing harmful toxins into the air. And once the pipe is buried, some say, the material could leach into nearby ground water and be spread to streams or private wells. Smusz has cited the product’s safety data sheet, which says the coating contains carcinogens. But according to its maker, 3M Manufacturing Co., the coating is safe if applied properly and allowed to fully cure.
A church is fighting back against the Atlantic Coast Pipeline - John Laury, Union Grove Missionary Baptist Church, and their neighbors in Union Hill, Virginia—which was settled by freed slaves 150 years ago—are on the front lines of the climate struggle. They’re vying to preserve the health of their community and the health of the planet. They’re aware that over the years communities of color have been disproportionately afflicted with the consequences of environmental degradation. A landmark report commissioned by the United Church of Christ in 1987 showed that 60 percent of African Americans and Latinos in the United States lived near a toxic waste site. The UCC report, titled Toxic Wastes and Race in the United States, is often credited with raising the issue of environmental justice to public consciousness. The term environmental racism, in fact, was coined by Ben Chavis, a protégé of Martin Luther King Jr. As a UCC pastor and field officer for the denomination’s Commission for Racial Justice, Chavis was among 500 arrested while protesting a chemical waste dump in Warren County, North Carolina, which is often cited as the birth of the environmental justice movement. From higher asthma rates in Philadelphia and Milwaukee, to dirty drinking water in San Joaquin Valley, California, and Flint, Michigan, to oil spills and deadly hurricanes along the Gulf shore, to urban landfills in Houston and Harlem, minority populations have been more likely to suffer the consequences of industrial pollution. The Atlantic Coast Pipeline would move up to 1.5 billion cubic feet of fuel per day along a 600-mile route from West Virginia to eastern North Carolina. With that kind of capacity, an $8 billion financial investment, and the potential to export liquefied natural gas from terminals in Maryland and Georgia, the ACP would cement its lead developers, Duke Energy and Dominion Energy, into a long-term commitment to shale gas just at the time when scientists and most world leaders recognize the urgent need to phase out fossil fuels and turn to clean energy. “We’re supposed to leave this earth in the shape we found it or better,” said Laury. “That’s why we’re fighting this monster.”
Brothers Lead Showdown With US Gas Giant -- The nine-month battle for control of America’s largest natural gas producer has come down to a choice: The old guard, or the “shalennials.” Absent a settlement before EQT Corp.’s annual meeting in Pittsburgh on Wednesday, shareholders will decide between competing rosters of candidates for the board of directors. One slate was nominated by EQT, while the other is backed by Toby and Derek Rice, the thirtysomething brothers leading a group of dissident investors who want to overhaul the company. Less than two years after EQT took the top spot among U.S. gas producers with its $6 billion purchase of the Rices’ former company, Rice Energy Inc., the two sides are locked in a bitter dispute. The brothers, who say EQT has underperformed since the acquisition, want a board majority and aim to install Toby Rice as chief executive officer. Though activists rarely grab a board majority through a proxy battle, the Rices’ push may be an exception: They’ve already won the backing of several large investors and two shareholder advisory firms. The brothers, who have used the term “shalennial” to describe their management style, own about 3% of EQT. The conflict between the Rices and EQT hinges on a wider issue for the industry. While U.S. gas drillers have been remarkably successful at ramping up output and turning the country into a net exporter, their track record of doing so profitably has been mixed at best, causing many investors to sour on the sector. The Rices say they’ll implement better technology and revamp EQT’s organizational structure to drill wells more efficiently.
They've drilled a well on my property, but never finished it. Why?— There are lots of reasons why a well may be drilled, but not finished and producing: The operator could be waiting for a pipeline to be connected, a crew to complete the fracking, or the markets to improve, Or it could be a well drilled to hold a lease, or a test well, and never put into production. A drilled but uncompleted well (DUC) is a new well that has been drilled, but has not been fracked for the first time and put into production. There is also casing, cementing and other steps that need to be done before a well can start producing. When producers are under stress, or when the market prices drops, there’s a slowdown in drilling and completion activity. An uncompleted well could also be waiting for a missing piece of the infrastructure puzzle, like an adjoining pipeline. When prices improve or other market triggers change, operators turn to DUC wells to be able to put them more quickly into production. There will always be some DUCs, and the U.S. Energy Information Administration says one long-term benchmark is the ratio of DUCs to completions of 2:1 for oil regions and just over 4:1 for gas regions.The recent high in the Appalachian region was 1,256 drilled but uncompleted wells in February 2014, and the number remained above 1,000 wells nearly 2 1/2 years later. But since July 2016, operators have been chipping away at that total, completing 95 wells in the second half of 2016; 121 wells in 2017; 212 wells in 2018, and 63 wells in the first five months of 2019, according to the EIA.As of the end of May 2019, there are still 437 drilled, but uncompleted wells in the Appalachian basin of eastern Ohio, West Virginia and Pennsylvania. As of June 15, 2019, Ohio has permitted 3,113 horizontal wells in the Utica and Point Pleasant shale plays, of which 2,626 have been drilled and 2,222 are producing. That means there are 234 drilled wells that are not currently producing. Another 67 permits have been granted in the Marcellus Shale in Ohio, and 44 of those have been drilled, but only 21 are producing. Of the 44, 23 have been drilled but aren’t producing.
Study Finds Thousands Live Near Underground Natural Gas Storage Wells - Thousands of Ohio, Pennsylvania and West Virginia residents live within one city block of highly pressurized underground natural gas storage wells, according to a new research from Harvard University. The study, published this week in the journal Environmental Health, found more than 20,000 homes and an estimated 53,000 people across six states are living within 650 feet of an underground gas storage well. “Our results were somewhat surprising in that a lot of these wells are in residential suburban areas, which in terms of the entire natural gas supply chain is definitely a unique kind of land use conflict,” said Drew Michanowicz, a research associate at the Center for Climate, Health and Global Environment at the Harvard T.H. Chan School of Public Health and lead author of the study. To store natural gas, companies often inject natural gas into repurposed decades-old oil and gas wells. The practice gained national attention in 2015, when a well in Aliso Canyon, California failed, leaking natural gas for 118 days. Nearby residents were evacuated and reported suffering from headaches, nosebleeds and rashes. The leak released almost 100,000 metric tons of the potent greenhouse gas methane into the atmosphere, equivalent to the emissions created by 530,000 cars in a year. Following the Aliso Canyon disaster, the Harvard team in 2017 set out to map the location of natural gas storage wells. Researchers used a combination of census data, satellite data, land use data and addresses to pinpoint homes located near more than 9,000 underground gas storage wells in Ohio, Pennsylvania, West Virginia, New York, Michigan and California. Their mapping model estimates 10,000 more people live near underground natural gas storage wells than previous models found. Companies often use older wells built before setback laws were put in place to store natural gas. In West Virginia, the study found half of the state’s underground storage facilities have at least one well that is near at least one home within the state’s 200-foot setback zone. Overall, the researchers found across the six states that 41 percent of underground storage wells are located within one city block of at least one home. In Ohio, more than half of the state’s underground storage wells are located within one block of a residence affected an estimated 12,000 Ohio homes and over 30,000 residents.
50,000 People Live Within a Block of Natural Gas Storage, Harvard Says - About 65% of natural gas storage facilities like the one that sprung a massive leak outside Los Angeles four years ago are in suburban neighborhoods from New York to California, according to a Harvard University study. More than 50,000 people live within a city block of an active gas storage well, researchers at Harvard’s Center for Climate, Health and the Global Environment found. That’s in contrast to shale wells, which are mostly located in rural areas. A 2015 rupture at Sempra Energy’s Aliso Canyon storage facility near Los Angeles forced thousands of residents to evacuate for months and cost the company more than $1 billion. Most of the storage facilities -- used by utilities to stock gas for heating and power generation -- are more than 50 years old and weren’t in populated areas when they were built, according to Harvard. They may also carry safety risks because they weren’t designed for storage, Harvard said. Previous studies using U.S. census data underestimated the number of people living near gas storage wells, according to the study. The new research, published Monday in the Journal of Environmental Health, combines census records with land use and satellite data. The study examined the locations of more than 9,000 wells in Pennsylvania, Ohio, West Virginia, Michigan, New York and California.
The Toxic-Gas Catastrophe Hiding Beneath Your Home - In October 2015, a fragile well casing ruptured at the Aliso Canyon natural gas storage field in Los Angeles, California—and no one could figure out how to stop it. For 118 days, 100,000 metric tons of methane and other hazardous pollutants seeped into the atmosphere. The single worst natural gas leak in American history was not only a disaster for the climate; it displaced thousands of nearby residents for months. Even after returning home, many complained of headaches, rashes, nosebleeds, and other symptoms they blamed on the lingering airborne chemicals. And most of these people didn’t see it coming. The majority of residents near Aliso Canyon claimed they had no idea they lived near a natural gas storage field until the 2015 blowout happened. They didn’t know that if any of the wells ruptured, they were at risk of exposure to a host of toxic chemicals, which could cause serious neurological and respiratory problems and even certain kinds of cancer. They could also be at risk of death from a pipeline explosion, like the victims of the Colorado blast in 2017. The massive Aliso Canyon storage field, which contained more than 110 underground wells, is just a small part of America’s much larger natural gas infrastructure. Approximately 15,000 such wells are active across the United States, and nearly half of them are concentrated in six states: Pennsylvania, Ohio, West Virginia, Michigan, New York, and California. For the many thousands of Americans who live near these wells, as well as federal regulators who are tasked with keeping the public safe, these wells are out of sight, out of mind. And a new study shows their dangers to be far greater than previously believed. Published Monday in the journal Environmental Health, Drew Michanowicz’s study was directly inspired by Aliso Canyon. After surveying the surroundings of more than 9,000 active wells in those six states, they found 6,000 located in suburban areas. Some 53,000 people live within 650 feetof a well, about 10,000 more people than previously estimated. The researchers found that most of those people had no idea about the threat lurking sometimes directly under their homes. “Because of suburban encroachment, some of these homes are sitting literally on top of these storage fields, especially in Ohio and Pennsylvania,” Michanowicz said. (For context, the closest home to the Aliso Canyon disaster was a mile away.) “Tens of thousands of people don’t realize that they’re one corroded steel casing away from disaster.” This is especially worrying because most wells at underground storage facilities are more than 50 years old, and most were not even designed to store natural gas,Michanowicz said; his 2017 study estimated that one in five of these wells were built for gas production, not storage, and are thus likely to be missing subsurface safety valves and other equipment needed to store gas under high pressure. (Federal data released after that study also showed Michanowicz’s number was too conservative; two-thirds of these wells are being used in ways they were not intended decades ago.)
The Natural Gas Industry Has a Methane Problem - Natural Resources Defense Council - Just because something is better than something else doesn’t necessarily make it good. This seems like an obvious enough point, yet it often manages to get lost in discussions about natural gas. Ever since certain advances in drilling and extraction technology—especially the technique of hydraulic fracturing, or fracking—ushered in the domestic natural gas boom 15 years ago, much of the conversation regarding this hydrocarbon has been about how much better it is than other fossil fuels. According to the Union of Concerned Scientists, when burned under optimal conditions, natural gas typically emits between 50 and 60 percent less CO2 than coal does, and as an automobile fuel, between 15 and 20 percent less of the greenhouse gases than gasoline. Natural gas also generates far less in the way of harmful pollutants like mercury and nitrogen oxide than do coal, gasoline, and diesel. But the fact that natural gas burns cleaner than other combustible fuels doesn’t mean that it’s clean. The reason why can largely be summed up in one word: methane. Methane leaks go hand in hand with our processes for extracting, storing, and burning natural gas. They’re a big reason that methane accounts for nearly 15 percent of greenhouse gas emissions. Last summer, a study published in the journal Science found that U.S. oil and gas operations are leaking 60 percent more methane than the U.S. Environmental Protection Agency had previously calculated: about 13 million tons more each year. And just last week, thanks to a journalistic collaboration between E&E News, the Center for Public Integrity, and the Houston Chronicle, we learned that Cheniere Energy’s 1,000-acre Sabine Pass terminal in Louisiana has been plagued by dangerous leaks for the past decade. A leak last year resulted from “gashes up to six feet long” in the steel tanks that store super-chilled liquid natural gas (LNG), the stuff that the Trump administration recently and ridiculously rechristened “freedom gas.” The released LNG “quickly vaporized into a cloud of flammable gas” with the potential to ignite and set off “an uncontrollable fire.” One LNG expert proffered a worst-case scenario: a series of “cascading explosions that could destroy a plant and possibly extend damages to the public beyond the facility boundary.” Whether or not these leaks ever catch fire and explode, such methane emissions are still doing substantial harm in the atmosphere. Practically everyone recognizes this—including some of the country’s biggest oil and gas companies, which have called for a tightening of federal rules designed to plug methane leaks connected to fossil fuel production.
Why Natural Gas Prices Collapsed - U.S. natural gas prices have collapsed since the end of winter, even as inventory levels remain below average levels for this time of year. Henry Hub prices spiked in the fourth quarter of 2018 due to record levels of demand, cold weather, and historically low inventories. But prices remained elevated, over $4/MMBtu, for only a brief period of time. Production continued to soar, so traders were not overly concerned about market tightness.As peak winter demand season drew to a close in March, prices continued to ease, and prices have eroded steadily in the last few months. Prices dipped below $2.30/MMBtu recently, hovering in that range for the first time in roughly three years. As recently as December, prices were twice as high as they are now. What’s going on? The main driver of the bearish market is production, which continues to ratchet higher, even as shale gas drillers are suffering from financial strain. Production from the Marcellus shale alone was up about 15 percent in May from the same period a year earlier.Gas markets also go through seasonal swings, seeing a peak in demand in winter and to a lesser degree in summer, while consumption falls sharply in spring and fall. But swings in temperatures from year to year can lead to significant disruption. A cool start to the summer this year led to lower demand than otherwise would be the case, allowing inventories to build back up.In the last week in June, U.S. natural gas storage levels stood at 2,390 billion cubic feet (Bcf), up 89 Bcf from a week earlier. Storage was still 152 Bcf below the five-year average but 249 Bcf higher than last year, which helps explain why prices recently fell off a cliff. Stocks have replenished, at least relative to last year.The multi-year low for natural gas prices are likely to deal a further blow to the coal industry, already caught in a death spiral. At least three coal companies have filed for bankruptcy since May, potentially putting 2,000 mining jobs at risk. Coal has a hard time competing with natural gas prices this low. But low gas prices is also bad news for the gas industry itself. Recently, a former executive at EQT, one of the country’s largest shale gas producers, said that fracking has been an “unmitigated disaster” for the industry, depressing prices and leading to consistent losses. “And at $2 even the mighty Marcellus does not make economic sense,” Steve Schlotterbeck, the former EQT executive said at an industry conference last month. “There will be a reckoning and the only questions is whether it happens in a controlled manner or whether it comes as an unexpected shock to the system.”
Gas Storage Injection In-Line with Expectations, Hurricane Barry Ahead --Natural gas storage inventories increased 81 Bcf for the week ending July 5, according to the EIA’s weekly report. This is in line with the expected injection, which was 80 Bcf.Working gas storage inventories now sit at 2.471 Tcf, which is 275 Bcf above inventories at the same time last year and 142 Bcf below the five-year average.At the time of writing, the August 2019 contract was trading at $2.466 MMBtu, roughly $0.022 higher than yesterday’s close and $0.20 higher than last week. Natural gas prices have been gaining traction over the past couple of weeks as weather forecasts have started to show warming temperatures across the lower-48. Prices rallied during expiration of the July contract, as expiration typically does, but then took a downturn to start the month, dropping as low as $2.24/MMBtu. However, the above-average weather forecasts have garnered support for prices, and prices are now trading in the $2.45 to $2.50 range as power demand is expected to increase. Tropical Storm Barry is now expected to become Hurricane Barry by tomorrow and could have a bearish impact on prices during the next couple of days should LNG terminals are shut in, leaving an over-supplied market. The storm will also likely decrease power burn for southern states (Texas and Louisiana) adding additional bearish sentiment to the market in the very short term. See the chart below for projections of the end-of-season storage inventories as of November 1, the end of the injection season. Dry gas production saw a decrease of 0.7 Bcf/d. The South Central region saw the largest move, decreasing by 0.47 Bcf/d as production is being shut down ahead of the tropical storm in the Gulf.Canadian net imports also decline this week, down 0.1 Bcf/d. Domestic natural gas demand increased 1.1 Bcf/d week over week. Power demand accounted for nearly all the domestic demand increase again this week, gaining 1.4 Bcf/d as temperatures started heating up. Res/Com demand decreased slightly, losing 0.15 Bcf/d, and Industrial demand fell 0.1 Bcf/d. LNG exports were flat week on week, while Mexican exports gained 0.18 Bcf/d.
Rural Macomb County residents plead for better safety from proposed gas compressor - A group of northern Macomb residents are bracing for the construction of a new gas compressor station, saying it lacks a safety feature that could protect them in the event of an explosion. The community near the site on Omo Road in Ray Township is about a mile from the Consumers Energy gas compressor station that was shut down temporarily in January when a fire broke out. Advocates say that's made residents even more fearful than they were before, and that the company that plans to build the new station, Bluewater Gas Storage, has a bad track record in the area. Valerie Brader of Rivenoak Consulting says there were explosions in 2011 and 2014 at Bluewater-operated compressor stations in the area. "These are folks whose homes shook in the Consumers explosion and whose homes shook in the 2014 explosion, so these are folks who have been personally affected," says Brader. Brader says there's a common-sense solution that would add very little to the $40 million dollar cost of the project. She says an earthen berm around the compressor station would protect residents from an explosion or fire that starts at the station - and also prevent drivers from accidentally piling into the station and causing an explosion.
He was calling the gas company when the mall exploded, ‘but by then it was too late’ - The roads were clear, the cleanup had begun and most nearby businesses had opened their doors Sunday. But the mystery behind the explosion that leveled a Plantation strip mall and injured 23 people remains. “The investigation is going to take awhile,” said Plantation Fire Rescue’s deputy chief, Joel Gordon. “There’s so many things that can cause an explosion.” Fire rescue officials have walked back from initial reports Saturday that it was a gas leak that caused a blast heard for miles around. The force blew out windows of shops and cars, ripped brick from buildings, caved in ceilings and left the dust-hazed scene looking like “a war zone,” as some witnesses called it.In a Saturday statement, TECO Peoples Gas said technicians “found no natural gas leaks” in their system, although firefighters did report a ruptured natural gas pipe. But tenants of nearby buildings distinctly remember smelling a strong odor of gas Saturday morning. Graig Foulks, the 36-year-old manager of the Total Nutrition store next door to the assumed ground zero of the blast — a vacant store that used to be a pizza place — said he checked with the restaurant next door, Pho Brothers, to find the source of the smell. Foulks warned Hiep Van, the Pho Brothers cook also known as “Chef Mo,” about the gas smell around 11 a.m. Van, 35, smelled the gas, too, and called his gas company right away. “I was on the phone with TECO when it happened,” he said of the gas company. “I’m pretty sure he heard that. I told them to hurry up and send a technician, but by then it was too late.”
Jay Inslee says Enbridge Line 5 is ‘clear and present threat’ to Great Lakes - Democratic presidential hopeful Jay Inslee called for the closure of an oil and gas pipeline running across the Great Lakes, calling the pipeline and a proposed replacement tunnel a “clear and present threat” to the environment. The Washington governor has made addressing climate change the central message of his campaign for the Democratic Party’s nomination for president. Inslee slammed the 66-year-old pipeline in a statement Wednesday. “They threaten the clean drinking water that millions depend upon,” Inslee said. “And they would lock in decades of climate pollution that we can’t afford. ... This dangerous pipeline must be decommissioned, the proposed oil tunnel must not be built and clean alternatives must be explored immediately.” Inslee backed up his statements on Twitter, saying the “dangerous” pipeline must be decommissioned and the proposed tunnel should not be built. Inslee said the pipeline should be “a major topic” in the upcoming Democratic primary debate in Detroit. He called on his fellow presidential candidates to oppose the Enbridge plan. Inslee’s campaign struggled to gain traction in the crowded Democratic field, but has sought to stand out by presenting a comprehensive plan to reduce fossil fuel use and encourage clean building practices. Inslee’s ambitious “100% Clean Energy for America Plan” lays out clean energy standards for new vehicles, public infrastructure and the construction of new buildings. As president, Inslee said he would use executive action to push some policies through a divided Congress. Inslee said his plan would create 8 million jobs, particularly in manufacturing cities like Detroit.
Enbridge begins geological work for Line 5 tunnel, despite Nessel lawsuit - Enbridge Energy is forging ahead with preparations to build a tunnel in the Straits of Mackinac to protect its controversial Line 5 oil and gas pipeline, even as the state seeks to block the project. Meeting with reporters at the Detroit Wayne County Port Authority along the Detroit River on Wednesday, Enbridge officials outlined $40 million in engineering and geological preparations planned this year as part of a $500 million project to swap the dual pipelines and construct a tunnel around new pipe. Officials of the Calgary-based energy giant said that’s the best option for protecting the Great Lakes from an unlikely rupture without disrupting regional fuel supplies. The highlight of Enbridge’s presentation on Wednesday: a tour of the Highland Eagle, a drilling vessel brought from the Irish Sea for the project. The ship was scheduled to depart Detroit on Wednesday night for a 36-hour voyage to the deepest stretches of the Straits, which separate Michigan’s two peninsulas. Once in the Straits, rotating 38-member crews will drill holes deep into the bedrock and collect rock samples over a 72-day stretch. Meanwhile, a separate jack-up barge will drill six more boreholes – deep, narrow holes – along the lakebed nearer to shore. Geological sampling is a critical step for finalizing designs and determining how to best build the 4-mile, 12-foot in diameter tunnel, Enbridge officials said. Guy Jarvis, Enbridge’s executive vice president of liquids pipelines, called the vessel “tangible evidence” of the company’s commitment to move forward on the tunnel “in the face of the state’s attempts to invalidate prior agreements and shut down the pipeline.”
Tugboats carrying 4,850 gallons of diesel, oil sink into Illinois River - About 4,850 gallons of diesel fuel and oil spilled into the Illinois River near Hardin, Coast Guard officials said Sunday. Three tugboats and a deck barge that were tied together, holding the oil and fuel sank into the river on Sunday at mile marker 21. It was first reported to the Coast Guard that the boats might be sinking on Friday.Coast Guard officials have assessed roughly 11 miles of the river and are working with the tugboat company to contain, remove and prevent the fuel from moving downstream. Efforts to prevent serious environmental damage is also underway.Devices called “booms” have been implemented to contain as much as the oil and diesel as possible. The booms work to guide the substances into an area where it can be absorbed and removed. The booms were placed around the boats. An excavation crew is planned to arrive later this week to attempt to remove the tugboats from the river, Fox 2 News reported Sunday. As of Monday, the tugboat vents from which the fuel leaked are believed to have been shut off by a team of divers, the release stated.Coast Guard spokesman Ian Ross told Fox 2 the spill was contained to an isolated area as of Monday. He said the incident was “unfortunate,” but noted the Coast Guard was “extremely happy” no one was injured. The sinking of the three tugboats is expected to cause “major” marine casualties and is currently under investigation.Major marine casualties are declared when a non-public vessel results in the loss of six or more lives; the loss of mechanically propelled vessel of 100 or more gross tones, property damaged estimated a $2 million or more or a serious threat to life, property or the environment by hazardous materials.
Groups Oppose Illinois Commerce Commission Granting Dakota Access Pipeline an Increase in Oil Flow Capacity at Pretrial Hearing - Twenty people attended a short rally with speakers outside of the Illinois Commerce Commission offices Wednesday to oppose a request by Energy Transfer Partners to add three pumping stations along the Dakota Access and ETCO pipeline routes, doubling the capacity of oil flow. After the rally opponents sat in on a pretrial meeting at the Illinois Commerce Commission in which opponents announced their intention to intervene to stop the upgrade to the pipelines. Speakers at the rally included Rachel Elfant of Save Our Illinois Lands, Joe Phillips of Extinction Rebellion Chicago and Angie Viands of Rising Tide Chicago. All three speakers addressed the grave environmental and social impacts of burning even more fossil fuels as we are currently experiencing negative climate change impacts. The pumping stations would increase capacity of oil flow from 570,000 barrels to 1,100, 000 barrels. According to Oil Change International, this is the equivalent of 30 new coal plants. Dakota Access Pipeline construction sparked nationwide protests and a large encampment at Standing Rock Sioux Reservation in North Dakota in 2016 and 2017. According to the pretrial hearing, the pumping stations could be approved or denied by early October 2019.
Bluffton, other communities voice concerns about seismic testing - The South Carolina Department of Health and Environmental Conservation received a letter this week from 16 coastal communities, including Bluffton, opposing seismic testing for offshore oil and gas deposits. The letter was drafted on behalf of the communities by the nonprofit law firm S.C. Environmental Law Project. It was submitted as DHEC begins its review of a federal permit application for the company WesternGeco to perform seismic testing off the coasts of Virginia, North Carolina, South Carolina and Georgia. “The seismic surveys proposed by WesternGeco involve towing an array of airguns that blast acoustic pulses at the ocean floor approximately every ten seconds, twenty-four hours a day, for months at a time,” a news release from the law firm said. ″(It’s) an injurious and extensive process known to harm and injure whales, sea turtles, fish and other marine animals and thus foreseeably harm South Carolina’s $22.6 billion tourism industry and its vital commercial and recreational fishery industries.” Mayor Lisa Sulka said Wednesday the town signed off on the letter last spring after a series of meetings with the S.C. Small Business Chamber of Commerce in conjunction with the firm. The firm held onto the letter until an application like WesternGeco’s came to DHEC for review. The 16 communities, a group that also includes Beaufort and Hilton Head Island, agreed to enter a lawsuit should a federal permit be approved.
Claims still mounting 9 years after BP oil spill - As judges and high-powered attorneys gathered inside an ornate Camp Street federal courtroom in April, the defendant in the case they were set to argue was identified only by a long series of numbers: BP Exploration v. Claimant ID 100139132. It was a format well-known to followers of the cases resulting from the 2010 Gulf of Mexico oil spill, where settlements have mostly been paid out under a veil of secrecy. But seconds after the case was called, and with a gleeful tone in her voice, Judge Edith Jones unmasked the party receiving the $9.4 million settlement award that was under protest by BP. “I can’t do five-digit numbers, and in this case, the claimant is the well-known law firm Phelps Dunbar,” she said. “Now the world knows it.” Jones, who sits on the 5th U.S. Circuit Court of Appeals, went on to declare it “tacky” of the mega-firm to seek money under the 2012 oil settlement, since the firm had represented paying clients in the massive wave of oil spill litigation that has so far cost BP nearly $12 billion to make people and businesses whole for the massive damage caused. Phelps Dunbar partner Harry Rosenberg protested that its losses were genuine and that many other law firms had received settlements, too. In February, the appeals court ruled that from now on, BP settlement appeals will be unsealed by default, unless someone successfully objects. So even as the BP litigation crawls to an end, details about claims from some of the thousands of private parties who sought money under the 2012 settlement are coming to light. The names that have surfaced so far have little in common with the shrimpers and oystermen who became poster boys for the spill’s devastating effects. They include Phelps Dunbar, the Tampa Bay Buccaneers and former New Orleans Hornets player David West. As one judge put it, “various types of businesses with more attenuated connections to conditions in the Gulf have also received compensation.”
Storm could become first hurricane of season and is already shutting down energy operations - The U.S. energy industry has halted about a third of Gulf of Mexico oil production and expects more disruptions, as the industry braces for the first hurricane of the year.The approaching storm, which was still forming over the Gulf Wednesday, was expected to head into the Louisiana coast by Saturday, dumping a large amount of rain. Oil prices jumped Wednesday by 4.5% per barrel on concerns the storm would disrupt oil production and threaten flooding around refineries in the area. Gasoline futures were also higher by about 4%, reaching $2 per gallon. The U.S. Energy Information Administration said Wednesday that U.S. crude stocks fell by 9.5 million barrels last week, triple what was expected by the market. At the same time, the oil industry is shutting in production and major producers evacuated rigs in the Gulf of Mexico, ahead of the approaching storm.The National Hurricane Center is predicting that the storm will develop over the Gulf of Mexico and hit the coast of Louisiana by Saturday. The storm, to be named Barry, would be the first hurricane of the season.Reuters reported that production in the gulf was cut by 602,715 barrels a day, about a third of gulf output, according to the Bureau of Safety and Environmental Enforcement. Natural gas production was reduced by nearly 18%.The U.S. Coast Guard anticipates issuing potential waterway restrictions on the Mississippi River within the next two days. That could limit the movement of tankers to and from refining areas.A U.S. Coast Guard official said, so far “we have not issued any waterway restrictions. We are anticipating that in the next 24 to 48 hours.” The spokesperson said depending on the expectations for wind and rain, the coast guard could act to restrict tanker traffic on the Mississippi River. The Coast Guard could also limit speed and direction in the shipping channel. “The forecasts are showing a significant amount of rain and the potential for flooding along the Mississippi River is a concern in the refining and oil industry,” said Andrew Lipow, president of Lipow Oil Associates. “The market has been moving up on all the issues related to the storm. A number of producers have been evacuating their platforms in the Gulf of Mexico, and curbing production.” Chevron, Royal Dutch Shell, BP, Anadarko Petroleum and BHP Group were evacuating staff from 15 offshore platforms. “From the track, it looks like the landfall is in the Lake Charles area. The concern is on the dirty side, where we get a lot of rainfall, can occur in the New Orleans and Baton Rouge area. We could see a storm surge that backs water into the Mississippi, which is already very high,” said Lipow. Lipow said there are three major refineries in Lake Charles and about 10 in the New Orleans-Baton Rouge area.
U.S. oil companies slash Gulf of Mexico production as storm bears down – (Reuters) - U.S. oil producers on Wednesday cut nearly a third of Gulf of Mexico crude output as what could be one of the first major storms of the Atlantic hurricane season threatened offshore oil production and began soaking Louisiana with heavy rains. Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a U.S. regulator as oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday. The withdrawals helped push U.S. oil futures up 4.5% to $60.43 a barrel on Wednesday, and lifted gasoline futures more than 4% to the highest price since late May. The U.S. Gulf of Mexico produces 17% of U.S. crude oil and 5% of natural gas. As the potential hurricane, to be named Barry, approached Louisiana, Governor John Bel Edwards on Wednesday declared a state of emergency, warning that up to 15 inches (38 cm) of rain could fall on parts of the Gulf Coast state. New Orleans was under a flash flood warning after receiving about 8 inches of rain early in the day. Vermilion Parish, a coastal community, called for residents of some low-lying areas to evacuate. A tropical depression is expected to form in the Gulf by Thursday, with the potential to strengthen to a hurricane by the weekend, according to the National Hurricane Center. The system could produce a storm surge and heavy rainfall from Louisiana to the upper Texas coast.
Storm Barry cuts half U.S. Gulf Coast oil output, flooding fears close coastal refinery - (Reuters) - An intensifying tropical storm in the U.S. Gulf of Mexico on Thursday cut more than half the region’s oil output, with energy companies evacuating staff from nearly 200 offshore facilities and a coastal refinery. Oil firms shut more than 1 million barrels per day of oil production, 53% of Gulf of Mexico’s output, and 1.2 billion cubic feet per day of natural gas production, according to a U.S. regulator. Tropical Storm Barry’s winds reached 50 miles per hour (85 km/h) late Thursday and are expected to intensify, possibly reaching at least 74 mph, a category one hurricane, as it nears the coast, the U.S. National Weather Service said. It expects as much as 25 inches (64 cm) of rain to fall, with flooding due to the rains and a storm surge. Despite the production cuts, U.S. crude, natural gas and gasoline futures slipped on Thursday after the Organization of the Petroleum Exporting Countries forecast weaker demand for its output next year. Dozens of oil and gas producers have removed staff from 191 production platforms, according to offshore drilling regulator U.S. Bureau of Safety and Environmental Enforcement. It said seven rigs and 11 drill ships were evacuated or moved out of Barry’s path. Phillips 66 (PSX.N) evacuated staff and halted operations at its 253,600-barrel-per-day (bpd) Alliance, Louisiana, refinery and pipeline operator Enbridge Inc (ENB.TO) also evacuated three offshore platforms and halted some deepwater Gulf of Mexico natural gas pipelines. The storm prompted Anadarko, Chevron, Royal Dutch Shell and others to move staff out of the path of the storm and many halted production, according to company reports.
Slow-Moving Barry Threatens Louisiana Ports, Refineries, LNG Facilities - Tropical Storm Barry is expected to make landfall over the central Louisiana Coast Saturday, bringing the potential for extreme flooding, National Hurricane Center information showed Friday. The NHC forecasts storm winds could reach hurricane strength when Barry reaches the Louisiana Coast. But the slow movement of Tropical Storm Barry will result in a long, heavy rainfall and flooding along the central Gulf Coast. The NHC has warned that extreme rain will flood the coastal regions south of Baton Rouge and New Orleans. This could impact operations at regional refineries.Phillips 66 Friday completed the "orderly shutdown" of its 294,700 b/d Alliance refinery in Belle Chasse, Louisiana, because of the mandatory evacuation of Plaquemines Parish. While crude and feedstock processing has ceased at the plant, Phillips 66 said utilities at the facility "remain active for restart facilities to begin as soon as it is safe to do so." Other regional refiners remain watchful, but are unlikely to shut down plants because they are not in the direct path of Barry. Valero has two refineries in the New Orleans region -- the 125,000 b/d Meraux plant and the 215,000 b/d Norco facility.Chevron, ExxonMobil, and Shell said their USGC refineries were operating normally.About 1.1 million b/d, or 59%, of oil production and 1.4 Bcf/d, or 49%, of natural gas output in the Gulf of Mexico remained shut-in as Tropical Storm Barry approached, the US Bureau of Safety and Environmental Enforcement said Friday. Shipping disruptions by US Gulf Coast port closures have supported European diesel and gasoline markets as market players there expect delays in getting product from the USGC, which pushed down refined product futures during morning US trading. In the spot market, USGC USGC RBOB at 7.8 RVP traded at NYMEX RBOB plus 3.50 cents/gal on Friday morning, up from plus 2.25 cents/gal Thursday, a level not seen since early May. Prices were being driven both by storm concerns as well as reports of work planned at Marathon's Galveston, Texas, refinery. A spokeswoman for the Louisiana Department of Environmental Quality said the Stolthaven terminal in New Orleans had shut down. The facility has 85 tanks. There are six US Gulf Coast liquefaction trains with total capacity of about 3.6 Bcf/d in operation at two terminals within range of potential impact from Tropical Storm Barry, based on the current track.Based on feedgas flows, LNG production appeared to be continuing Friday at Cheniere Energy's Sabine Pass terminal in Cameron Parish, Louisiana, and Sempra Energy's Cameron LNG facility in Hackberry, Louisiana. The biggest impact to the terminals in operation could come from vessel traffic restrictions along the intracoastal waterways that serve the terminals. At Cameron LNG, however, the facility was not scheduled to receive any tankers to load for export for the duration of the storm, a spokeswoman said after Lake Charles pilots advised they would be temporarily suspending service along the intracoastal waterway that serves the Louisiana terminal.
Tellurian, Total finalize Louisiana Driftwood LNG export plant agreements - (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc said on Wednesday that units of French oil major Total SA have agreed to buy LNG from the U.S. company’s proposed $30 billion Driftwood export project in Louisiana. Total will buy one million tonnes per annum (mtpa) of LNG from Driftwood and invest $500 million in Driftwood Holdings LP, it said in a statement. Total will also buy an additional 1.5 mtpa of LNG from Tellurian’s offtake volumes from Driftwood. The deal involves LNG free on board at a price based on the Platts Japan Korea Marker (JKM). Tellurian said it planned to make a final investment decision this year on whether to build Driftwood, which would enable the plant to enter service in 2023. “The agreements we have executed with Total confirm the business model for the Driftwood project, establishing it as an LNG joint venture partnership with an implied value of $13.8 billion,” Tellurian President and Chief Executive Meg Gentle said in the statement.
Booming LNG industry could be as bad for climate as coal, experts warn - The booming liquefied natural gas (LNG) industry will play at least as big a role as new coal investments in bringing on a climate crisis if all planned projects go ahead, US-based energy analysts and campaigners say.The report by the Global Energy Monitor appears at odds with comments by Australia’s emissions reduction minister, Angus Taylor, who has said the country could be proud that the rapidly expanding LNG export industry was displacing coal power overseas.Government analysis identified LNG as the main reason Australia’s greenhouse gas emissions have risen each year since 2015, but the minister and industrysay Australian gas deserves credit for lowering global emissions. The Global Energy Monitor, formerly known as CoalSwarm, is a US-based research and advocacy group that tracks fossil fuel development. It found there were US$1.3tn in planned LNG investments across the globe, including nearly $38bn in Australia, putting it fourth on a list behind the US, Canada and Russia. Ted Nace, the group’s executive director, said the proposed tripling of global LNG capacity risked introducing decades of emissions of methane, a potent and difficult-to-monitor greenhouse gas, at odds with the Paris climate agreement. The Intergovernmental Panel on Climate Change last year estimated methane emissions would need to be reduced by 35% between 2010 and 2050 to meet the Paris goals. A separate study in the journal Nature found existing fossil fuel infrastructure alone, including coal and gas-fired power stations, would almost certainly be enough to push the world beyond 1.5C global heating if not shut down earlier than planned. Australia’s LNG industry has already more than tripled since 2012 as developments have come online in Western Australia, Queensland and the Northern Territory. A recent government Resources and Energy Quarterlyreport forecast the value of Australian LNG exports will be nearly $50bn this year, second only to iron ore.
A Community In America's 'Cancer Alley' Fights For Its Life Against A Plastics Plant - St. James is a rural community of just over 21,000 on the Mississippi River, better known for its plantations than its plastics. Some of its residents, as well as activists from around the state, had come to the hall to strategize how to stop the construction of a $9.4 billion chemical plant proposed by Taiwan-based Formosa Plastics. The facility, to cover 2,400 acres about 2 miles upriver from the meeting, would be the largest in the parish, which already hosts a fertilizer plant, a polystyrene plant and several oil and gas terminals and pipelines. It would also be one of the largest plastic producers in the nation. The sprawling complex is set to comprise 10 separate plants that would use ethane, propane and natural gas to produce the base materials for the plastic bottles being passed around, as well as grocery bags, drainage pipes, clothing, astroturf and antifreeze. In October, Sharon Lavigne, a lifelong resident of St. James and a school teacher, founded a nonprofit group called RISE St. James to fight the Formosa plant after hearing one too many times that it was “a done deal.” “I didn’t buy that,” she told HuffPost. One day on her porch last year, Lavigne says she prayed on what to do and she got a clear answer: Rise and act. So she did. She organized residents to protest the plant, starting at the parish council hearings last year. RISE St. James works to get churches and other residents involved in the fight against the region’s chemical plants. St. James lies in the middle of Louisiana’s petrochemical corridor, called “Cancer Alley” by many people in the state because of the emissions and pollutants released by the many industrial plants in the region. Anyone you speak to here has had cancer or knows multiple people who have died from cancer. One resident told HuffPost she personally knows 70 people in the area who have died from cancer. Parents say their children have trouble breathing and suffer from skin rashes and nose bleeds. Last month, Lavigne and her group participated in a three-day march through Cancer Alley to talk with residents and local and state representatives about stopping construction of new plants in the state and asking for stronger regulations on existing plants. .
$8B Petchems Project Slated for Gulf Coast - CP Chem and QP unveil plans for another world-scale facility, this time in the U.S. During a White House ceremony Tuesday, officials with Chevron Phillips Chemical Co. (CP Chem) and Qatar Petroleum (QP) signed an agreement to jointly develop a petrochemical complex on the U.S. Gulf Coast estimated to cost $8 billion.According to a written statement from CP Chem, the planned U.S. Gulf Coast II Petrochemical Project (USGC II) will comprise a 2,000-kiloton-per-annum (KTA) ethylene cracker and two 1,000-KTA high-density polyethylene units. The company did not specify the site’s Gulf Coast location but noted that it will enjoy direct access to natural gas liquids from the Permian Basin.CP Chem added that it would own a 51-percent interest in USGC II, with QP owning the remaining 49 percent. The project reportedly would create approximately 9,000 construction jobs and roughly 600 full-time positions during operations.Tuesday’s announcement marks the second recent major collaboration unveiled by CP Chem and QP. As Rigzone reported in late June, the companies are developing another world-scale project in Qatar’s Ras Laffan Industrial City. “Qatar Petroleum is already a terrific partner of Chevron Phillips Chemical on petrochemical plants in Qatar and we look forward to expanding our relationship in the United States as we jointly seek to develop a new petrochemical facility along the U.S. Gulf Coast,” commented CP Chem President and CEO Mark Lashier. “Qatar Petroleum’s financial strength, its commitment to safety as a core value and shared belief in our strategy to build facilities located close to competitive feedstocks make this an ideal relationship.”
Chevron Phillips, Qatar Petroleum sign $8 billion petrochemical deal - (Reuters) - Chevron Phillips Chemical and Qatar Petroleum signed an agreement on Tuesday to develop an $8 billion petrochemical plant along the U.S. Gulf Coast, the second pact between the companies to build such plants in the last few weeks. The U.S. Gulf Coast II Petrochemical Project will include a 2,000 kilotons per year (KTA) ethylene cracker and two 1,000 KTA polyethylene units. The plant will mostly make hard plastics for everything from pill bottles to coolers to kayaks. Chevron Phillips Chemical, a joint venture of Chevron and Phillips 66, will be the majority owner with a 51 percent share, with Qatar Petroleum owning 49 percent of the project. The companies expect a final investment decision no later than 2021 for the project, which has a target of starting in 2024. Mark Lashier, chief executive and president of Chevron Phillips Chemical, said the plants would help fill demand for plastics from an expanding global middle class, which is expected to grow by about 160 million people per year for at least the next decade. Last month the companies announced they would build a petrochemical plant north of Doha in Ras Laffan Industrial City that will come on line by 2025 and tap Qatar’s North Field for natural gas feedstock. Qatar, a tiny but wealthy country, is the world’s largest exporter of liquefied natural gas (LNG). Qatar is broadening its energy interests after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with it in 2017, in one of the worst diplomatic disputes in the region in years. The countries accused Doha of support for Islamist militants and Iran, charges it denies. In February, Qatar Petroleum and Exxon Mobil Corp said they are investing in a $10 billion project to expand an LNG export plant in Texas, as companies race to meet global demand for the fuel.
Why Build An Ethane Steam Cracker In A Time Of Low Ethylene Margins? -- The margin for producing ethylene by steam-cracking ethane has been less than a dime per pound since mid-March 2018, and less than a nickel for nearly nine of the past 15-and-a-half months. In fact, for two weeks last September, the ethylene-from-ethane margin fell below zero. And yet, a joint venture of two of the world’s savviest companies — energy giant ExxonMobil and petchem behemoth Saudi Basic Industries Corp., or SABIC — recently committed to building what will be the world’s largest ethane steam cracker: a 4-billion-pounds/year facility to be constructed near Corpus Christi by 2022. Is this a case of blind optimism? No, not when you factor in the cracker’s location, the JV’s concurrent plan to construct two polyethylene plants and a monoethylene glycol plant right next door, and the co-developers’ global market reach. Today, we discuss the thinking behind ExxonMobil and SABIC’s big investment in Texas’s San Patricio County. Refinery retrofits to allow more light-sweet shale crude to be processed. Liquefaction plants and LNG export terminals — new crude and LPG export infrastructure too. A slew of new natural gas-fired power plants, accelerating the retirement of coal generators. And, as we’ve discussed at least a few times in the RBN blogosphere, a long list of new, mostly ethane-only steam crackers — almost all of them along the Gulf Coast — to take advantage of the humongous volumes of ethane and other NGLs emerging from wells in the Permian, Eagle Ford, SCOOP/STACK, Marcellus/Utica and other shale plays. We’ve discussed the planning and buildout of a new generation of steam-cracking capacity in a number of blogs, including in our Ethane Asylum Revisited series. There, we explained that the now more than 40 stream crackers in the U.S. (capacity totaling 76 billion pounds/year as of May 2019) “crack” a variety of feedstocks (ethane, propane, butane, naphtha, gas oil) to produce ethylene as well as smaller volumes of propylene and other useful products. More than half of the plants are designed to crack specific feedstocks (mostly ethane or ethane and propane), while the others can switch between feedstocks to maximize their profitability — a function of the prices of feedstocks (ethane, propane, normal butane, etc.) and products (ethylene, propylene etc.), and the volumes of ethylene and other products that various feedstocks produce (see You're the One That I Want for more about petrochemical feedstock selection). All but a handful of these crackers are located along the Gulf Coast, in large part because of the region’s abundant and generally lower-cost sources of feedstocks and natural gas, its proximity to import and export terminals, and the fact that a number of key locations along the Gulf Coast sit above underground salt formations that could be — and in many cases have been — developed into huge storage tanks for both feedstocks and petchem products. In Good Margin Gone Bad, which we posted soon after the ethylene-from-ethane margin fell below 10 cents/lb in March 2018, we noted that steam crackers make up about 60% of total U.S. NGL demand and 100% of domestic demand for ethane that is not “rejected” into natural gas. Therefore, high petchem margins are always a good thing for petchem companies and NGL producers — when the petrochemical industry is making lots of money, it buys more feedstocks, supporting NGL prices (and, with that, NGL producers).
Enterprise expanding oil exports and more along Houston Ship Channel - Houston's Enterprise Productions Partners said it will greatly expand its Houston Ship Channel terminals to export more crude oil, propane, butane and petrochemicals. Enterprise said it is concentrating the expansion at its Houston Ship Channel terminal south of Channelview, including the construction of an eighth dock to increase its crude oil-exporting capacity by nearly 45 percent from Houston. Enterprise also will greatly expand its liquefied petroleum gas export capacity - primarily butane and propane - and add new refrigeration storage capacity so it can ship out more propylene, which is the primary petrochemical building block of many plastics. This is all part of an ongoing build out of Enterprise's pipeline, storage, processing and exporting network that has rapidly expanded since the advent of the Texas shale boom. Enterprise has recently built massive crude oil and natural gas liquids pipelines stretching more than 500 miles from West Texas' Permian Basin to the Houston area. "Our integrated midstream system, including our Houston Ship Channel terminal, is providing Texas products with access to the highest value markets, including international markets," said Enterprise Chief Executive Jim Teague. Teague also credited a new Texas law recently signed by Gov. Greg Abbott to cap the number of larger cargo container vessels in the ship channel to ensure better two-way traffic. Enterprise wouldn't provide project cost estimates. The pipeline, processing and exporting firm is the second-largest company headquartered in Houston by Wall Street value, behind only ConocoPhillips. Enterprise also has rapidly expanded its storage and processing hub in Mont Belvieu, and now Enterprise is again adding to its export capacity along the ship channel. In a previously announced project, Enterprise is even planning to build an oil exporting hub offshore of the Texas Gulf Coast to accommodate the largest crude oil tankers from around the world. As for the new Houston Ship Channel expansion, Enterprise said it will add 840,000 barrels per day of crude-exporting capacity, increasing its total potential exports to 2.75 million barrels daily. The new dock will be able to accommodate Suezmax vessels, the largest ship class that can navigate the Houston Ship Channel, Enterprise added.
Permian Poised for Next Pipeline Wave -Thanks to growing production from the Permian Basin, another wave of new crude oil takeaway capacity will be needed by the end of the next decade, according to natural resources consultancy Wood Mackenzie. “As production growth expands well into the 2030s, U.S. Gulf Coast-bound pipeline capacity will tighten,” John Coleman, Wood Mackenzie principal analyst for North American crude markets, said in a written statement emailed Monday to Rigzone. “By the mid-2030s, Permian-to-Gulf Coast pipeline utilization will surpass 92 percent in the absence of further investment, necessitating pipeline expansions or greenfield capacity.” According to Wood Mackenzie, a “moderate overbuild of pipeline capacity” should occur early next decade as the current wave of pipeline projects conclude. By the end of 2022, midstream operators should add approximately 4 million barrels per day (bpd) of new capacity bound for the U.S. Gulf Coast, the firm stated. It assumes seven proposals for new Permian pipelines, with four reaching the final investment decision (FID) stage and 2 million bpd of the capacity flowing into Corpus Christi for export. Wood Mackenzie contends the new capacity should translate into “two to three years of overbuild.” Subsequently, it expects the need for additional pipeline infrastructure as “normal long-haul capacity supply and demand conditions” resurface. “We are in the midst of one of the largest crude infrastructure investment booms in U.S. history, with much of the investment focused on the Permian basin,” stated Coleman. “As massive as this current investment wave is, we don’t think the story is yet finished.”
Kyle adopts pipeline ordinance with new regulations for developers, Kinder Morgan - Kyle City Council approved an ordinance July 2 that will affect both pipeline companies hoping to route projects through Kyle—including the controversial Permian Highway Pipeline slated to be built through the city—and developers with projects near those future pipelines. Citing the city’s obligation “to protect the public health, safety, and welfare that can affect the risks associated with increased human activity in the vicinity of transmission pipelines,” the new rules require additional permits and fees in addition to prohibiting certain types of buildings near pipelines unless the City Council grants an exception. The ordinance first appeared at a special council meeting May 14, where the four council members present voted to approve it. But when it was brought in front of the council at the regular May 21 meeting, Mayor Travis Mitchell asked to postpone the item. “We’ve had some questions brought up from some of the different developers in the community,” Mitchell said at the time, adding that the issues were related to how the ordinance might affect construction around existing pipelines. The Permian Highway Pipeline is a planned 42-inch oil and gas conduit under development by Kinder Morgan that will run through the Kyle on its way from the Permian Basin to the Gulf Coast. Officials in both the city and Hays County have vocally opposed the development for months, including filing a lawsuitagainst the Texas Railroad Commission—the government agency charged with regulating pipelines—and Kinder Morgan, which was just dismissed by a Travis County judge.
Earthquakes caused by industrial activities: what are the risks and how can they be reduced? - On September 3, 2016, a magnitude 5.8 earthquake struck just northwest of Pawnee, Oklahoma, causing moderate to severe damages in buildings near the epicenter . It was the largest ever recorded in the state. The Pawnee earthquake followed the dramatic increase of seismic events in the central United States beginning in 2009, associated with the increase of underground wastewater disposal byoil and gas operators . This and other events in the area raised public concerns and led governmental agencies to shut down injection wells and establish new regulations regarding wastewater injections . While human-caused earthquakes have been documented for more than a century, their increasing number reported worldwide has drawn much scientific, social and political attention . Such earthquakes are related to industrial activities such as mining, construction of water dams, injection of liquids such as waste water and carbon dioxide, and extractions associated with oil and gas exploitation. With the ever-increasing demand for energy and mineral supplies worldwide, the number of human-caused earthquakes is expected torise in the upcoming years . Some of the largest and more destructive earthquakes of the past few years have been related to man-made activities, such as the 2008 magnitude 7.9 Wenchuan (China) earthquake and the 2015 magnitude 7.8 Nepal earthquake . In most of the cases industrial activities do not induce earthquakes. But this becomes problematic when such activities are close to active faults. In this case, even small stresses underground caused by man-made activities can destabilise faults, inducing earthquakes.Such stresses, such as fluid injections, are even capable of migrating long distances in the planetary crust, can induce earthquakes days, months or even years after the injection. In Europe, where the population density is higher than the United States, public concern over man-made earthquakes is greater. In thewell-known case of Basel, Switzerland , which took place in 2006, approximately 11,500 cubic metres of water were injected at high pressure into a 5-km deep well to make the extraction of geothermal energy possible. During the injection phase, more than 10,000 earthquakes were induced, including some strong events that were felt in Basel itself. These raised public concern and anger, leading to the termination of the project and to morethan $9 million on damage claims .
Is US Shale Cannibalizing Itself? - U.S. oil production continues to grow, but the shale industry is in the midst of a deceleration as low oil prices and a financial squeeze slow the pace of drilling. The U.S. added 246,000 bpd of fresh supply in April, the latest month for which data solid is available. That put to rest concerns that the industry was in the midst of contraction, after production fell in January and February (some of which was due to offshore maintenance). Even as the rig count continues to fall, production grinds higher. The EIA expects output to grow by another 70,000 bpd in July, with the Permian alone adding 55,000 bpd.But the rate of growth is slowing. In April, production was up 1.6 million barrels per day (mb/d) compared to the same month a year earlier. By any measure, that is a massive increase. But it is down sharply from the nearly 2.1 mb/d year-on-year increase seen in August 2018, which looks set to be the peak in terms of the pace of growth.U.S. oil production is not in danger of outright decline, not for the foreseeable future. But growth is clearly slowing. The U.S. could add 1.3 mb/d of new supply this year, according to an average of forecasts from multiple analysts, compiled by Reuters. That figure would be down from 1.5 mb/d of additional supply that came online in 2018.Financial stress is spreading, and top industry executives in Texas are arguably at their gloomiest in years. Consolidation and bankruptcies could pick up pace in the next few months, a bankruptcy attorney told Reuters. Investors have soured on shale drillers, closing the door on fresh capital injections. The “biggest impact has been the rapid and accelerating lack of investor interest in both conventional and unconventional oil and gas. The securities of oil and gas companies now sell at a fraction of what they once commanded. Huge losses in these shares hamper new exploration. It looks like another round of bankruptcies and mergers,” one oil executive said in a survey by the Dallas Federal Reserve in June. Most shale drillers are still not profitable. To the extent that energy executives could make a compelling case to investors, much of it came down to the notion that costs decline over time, drilling techniques continue to improve, and companies could steadily increase the volume of oil and gas that they recover from individual wells. All of that added up to lower breakeven costs, more production, and – hopefully – profits somewhere down the line. This mantra kept skeptical investors on board, greenlighting the next tranche of capital that was injected into the ground. However, the tweaking of drilling techniques is not registering progress in the same way that the industry experienced in years past. Nor is the progress consistent with what companies have promised.
State regulators to revisit Line 3 environmental review; won't appeal court ruling - Minnesota regulators announced Wednesday that they will revisit their environmental review of the Line 3 pipeline project, rather than asking the state Supreme Court to take up the case. Last June, the state Public Utilities Commission approved Enbridge Energy's $2.6 billion plan to replace its aging Line 3 oil pipeline across northern Minnesota.But early last month, the Minnesota Court of Appeals reversed the PUC's approval of the project's environmental impact statement — a review of potential impacts the pipeline might have on the surrounding environment — saying it didn't adequately address the potential impact of a spill in the Lake Superior watershed.In its ruling, the appeals court determined the environmental impact statement needed to be fixed, and sent it back to the PUC to address the issue.At the same time, the court upheld the majority of the more than 3,000-page environmental impact statement, and rejected most of the arguments made by pipeline opponents, including their contention that the study didn't sufficiently assess the pipeline's impacts on climate change, and didn't adequately analyze possible harm to tribal and cultural resources. Opponents and supporters of the Enbridge Line 3 oil pipeline wait outside of the Minnesota Senate Building before a hearing in St. Paul, Minn. on Nov. 19, 2018. Evan Frost | MPR News 2018The PUC, Enbridge Energy and opponents of Line 3 involved in the appeals court case had until Wednesday to petition the state Supreme Court to review the ruling.PUC chair Katie Sieben said in a statement that the commission had decided to revisit the environmental review, instead of appealing the ruling to the state Supreme Court.
Keystone pipeline opponents again seek to block construction (AP) — Opponents of the Keystone XL oil pipeline asked a judge to again block construction of the $8 billion project after President Donald Trump issued it a new permit. Attorneys for environmental groups made the request Wednesday in a lawsuit before U.S. District Judge Brian Morris in Montana. They say Trump’s permit was illegal. The 1,184-mile (1,900-kilometer) pipeline proposed by TC Energy would carry crude oil from Canada to Nebraska. Opponents contend it would make climate change worse by increasing fossil fuel consumption. Morris temporarily blocked construction last year, saying officials had not fully considered oil spills and other impacts. That ruling was upheld on appeal, only to have Trump issue a new permit in March. Government attorneys say that permit is not subject to environmental laws. They want the lawsuit dismissed.
'Protesters as terrorists': growing number of states turn anti-pipeline activism into a crime - From the Standing Rock camps in North Dakota to tree-sits in Texas, activists have attempted to stop pipeline construction with massive shows of civil disobedience. Now they could be forced to change those tactics, or face heavy penalties under a wave of new anti-protest laws that civil liberties advocates say violate the first amendment.Conservative lawmakers have put forward laws criminalizing protests that disrupt the construction and operation of pipelines in at least 18 states since 2017.
- Seven states have passed laws that ratchet up the penalties for activists protesting or even planning protests of oil and gas pipelines and other “critical infrastructure”
- At least six more states are considering such laws
- In each case, misdemeanors are elevated to felonies, and criminal and civil punishments are escalated drastically
- The ACLU and the Center for Constitutional Rights have mounted challenges against such laws in Louisiana and South Dakota.
“This is a trend that shows no sign of slowing, let alone stopping,” said Elly Page, who has been tracking anti-protest legislation for more than two years as a legal adviser for the International Center for Non-Profit Law. The laws purport to only criminalize violence and property damage in service of pipeline safety, but critics say their greater intent appears to be to deter nonviolent civil disobedience by framing it as potentially violent in itself. The bills have mostly found fertile legislative ground in places where gas and oil companies already wield significant political and economic power and where anti-fossil fuel protests have been especially successful. But watchdogs say there’s every reason to believe more of these types of laws will be passed, and that they will chill activism otherwise protected by the first amendment. “This is a miscasting of protesters as economic terrorists and saboteurs when in fact they’re going out and having their voices heard about why these pipelines are problematic for their communities and the environment,” said Vera Eidelman, a staff attorney with the American Civil Liberties Union. “Even if folks haven’t been charged, the fact that these laws are on the books can seriously chill people and make them fearful of getting their voices out,” she added.
Trump plan to jail protesters: Justice or 'un-American'? -- Anti-pipeline activists knew they might go to prison when they broke into valve stations in 2016 and shut down five pipelines in a coordinated protest against climate change. But the activists, commonly called the "valve turners," netted a total of about six months in lockup. To the oil and gas industry and the Trump administration, that wasn't enough punishment. They think 20 years each would be a better fit. In a proposal to Congress last month, the administration recommended expanding criminal laws protecting pipelines to punish some civil disobedience, even if the act doesn't cause physical damage (Greenwire, June 3). The oil and gas industry has cheered the proposal, warning that "direct action" — like turning valves — risks spills, ruptures, explosions and other problems. "We need more of a deterrent effect," said John Stoody, an executive with the Association of Oil Pipe Lines. Federal law already authorizes prison terms of up to 20 years for damaging or destroying pipelines, but shutting them down in protest doesn't qualify if there's no damage. Existing law also doesn't cover lines under construction. To critics, the administration's wording is too broad and could criminalize peaceful, legitimate protest. The proposal would expand the definition of criminal activity to include "impeding, disrupting or inhibiting" operations. Pipeline opponents say a zealous prosecutor could decide that less-extreme protest techniques, like blocking construction trucks, fits that felony definition. "The Trump administration's PHMSA language and all these state bills are about one thing, and one thing only: chilling speech, stopping protest, and protecting oil and pipeline companies from the costs of project delays," Josh Axelrod of the Natural Resources Defense Council wrote in a recent blog post. "This is un-American." In calling for harsher penalties, the Trump administration is joining lawmakers in industry-friendly states who are trying to crack down on protesters who try to block pipelines. Some state-level efforts have gone beyond imposing consequences for individuals by also targeting organizations that promote and coordinate demonstrations (Energywire, April 24).
Oil well vandalized near Lake Texoma - The Army Corps of Engineers said an unknown amount of oil spilled into Lake Texoma 3,000 feet north of the Roosevelt Bridge. Environmental specialist with the Army Corps of Engineers, James Vincent, said the investigation is still ongoing and it’s suspected the oil well was vandalized. The well released oil and produced water, a term used to describe water as a byproduct along with oil and gas. “We believe that it’s still small to a moderate size release, and we also know that the release has been stopped by the oil and gas producer," Vincent said. The Oklahoma Corporation Commission said Godfrey Oil Properties owns the well and was quick to respond to the spill around 11 a.m. and are involved with the cleanup. Sarah Terry-Cobo with the Corporation Commission said the cleanup includes the usage of containment booms with white absorbent material to soak in the oil and hazardous material. “All of those things are removed, and sometimes are replaced several times to make sure they get as much crude oil as possible," Terry-Cobo said. Vincent said the environmental impact to Lake Texoma is minimal, but will ensure to the public a total recovery of the resources. “It has been reported to the National Response Center that’s operated by the U.S. Coast Guard. That’s one of our steps to show that we are doing a whole recovery," said Vincent. Parts of Lake Texoma are safe to swim, but it’s encouraged to avoid any oil sheens on the water and to report any sightings to the Army Corps of Engineers. The Marshall County Sheriffs will be investigating the damage done to the well.
US oil, gas rig count falls by 17 to 1,040 after holiday weekend: S&P Global Platts Analytics — The US oil and natural gas rig count dropped by 17 week on week to 1,040, S&P Global Platts Analytics said Thursday, as activity continued its seesaw trajectory following a national holiday. Rigs directed to oil saw an even bigger drop -- 20 to 828 -- while the number of gas rigs rose by four to 209. A one rig decrease was posted for rigs not classified as either oil or gas. Despite the overall drop in the rig count, the tally of private operators rose, according to Platts Analytics. That indicates that the privates are going ahead with the mid-year drilling budgets, helped by the recent uptick in crude prices that finally topped $60/b in recent days - although the rig increase was more likely due to the comfort zone that locked-in hedging levels provide. Click here for full-size image Widespread flooding in Oklahoma and Texas may also have kept some rigs from taking to the field. But in general, the rig count may have found at least a bottom range, Platts Analytics said. Although the rig count has seen a zigzag pattern for the better part of a year that has gradually seen its numbers sift down from a mid-November 2018 high of 1,233, the count has been rangebound between a low of 1,040 -- a figure also seen three weeks ago -- and the mid-1,060s for nearly two months. Within the large domestic plays, the biggest weekly rig count movement came from the Permian Basin, which dropped six to 440.With about 4.2 million b/d of oil production, the Permian is the largest single crude provider in the US, and the second-biggest natural gas basin after the Marcellus Shale.Otherwise, most basins moved up or down a rig or two, or remained the same.Down two rigs apiece were the SCOOP-STACK plays of Oklahoma, at 83, and the Utica Shale of mostly in Ohio, at 17.Also down one rig each this week were the Denver-Julesburg Basin in Colorado, the Dry Marcellus, the Wet Marcellus, and the Williston Basin of North Dakota and Montana. The decreases left the Denver-Julesburg with 32 rigs, the Dry Marcellus at 28, the Wet Marcellus at 24 and the Williston at 60 rigs.The Eagle Ford Shale of South Texas added a rig this week to reach 82 rigs, while the Haynesville Shale of East Texas and Northwest Louisiana remained the same at 55 rigs. The "Other Basins" category also fell by four rigs, leaving a total of 219. Rigs working outside the eight large named basins are classified in that category.
Fracking on the move in California; Did not cause quake, CalTech seismologist states – Dr. Egill Hauksson, a seismologist at CalTech, said unequivocally that fracking had nothing to do with the magnitude 7.1 earthquake that struck on July 5. During a press conference on July 6, a reporter asked Hauksson, “Could fracking in Kern County have anything to do with these earthquakes?” Hauksson replied: “I think that’s — no. I think I can answer that — no. I don’t have to put a qualifier on that.” The seismologist said “There is a geothermal area at the very north end….That’s the coastal geothermal area where there’s a — very large energy production going on where they pump water into the ground to harness heat from the rock. But if they had had something to do with this, we would have expected the activity to maybe start much closer to the geothermal area and then emanate from there.” Hauksson went to say: “But again, the reason we have a geothermal field there is in part due to the active tectonics. It’s due to the ongoing geological deformation. So in that particular area the crust is being thinned and pulled apart so heat can easily rise from the interior of the earth, and we are able to harness that for electricity production.” The Trump administration moved forward in May with a plan to open up federal land in California’s Central Valley and Central Coast to more oil and gas drilling, including fracking. The Bureau of Land Management (BLM) Central Coast Office’s boundaries stretch across 11 California counties: Alameda, Contra Costa, Fresno, Merced, Monterey, San Benito, San Joaquin, San Mateo, Santa Clara, Santa Cruz and Stanislaus. The agency said in a press release that the plan could result in up to 37 new oil and gas wells drilling on new land leases over the next 20 years, primarily in Fresno, Monterey and San Benito counties. BLM estimates that the oil and gas industry directly supports 3,000 jobs and $623 million in tax revenue within those counties. Fracking is currently primarily used in California to enhance oil production in the San Joaquin Valley, home to some of the largest producing oil fields in the United States. The Western States Petroleum Association, an industry lobbying group, said environmental reviews prove that fracking is safe. Laws In Oil & Gas-Producing States Can Force Homeowners To Lease Underground Mineral Rights - 90.5 WESA
Chevron spills 800,000 gallons of oil, water in Kern County — California authorities said Friday that crews are beginning to clean up a massive oil spill that dumped nearly 800,000 gallons of oil and water into a Kern County canyon, making it larger — if less devastating — than the state’s last two major oil spills. The seep, which has been flowing off and on since May, has again stopped, said Chevron spokeswoman Veronica Flores-Paniagua. The last flow was Tuesday.She and California officials said the spill is not near any waterway and has not significantly affected wildlife. Chevron reported that 794,000 gallons of oil and water have leaked out of the ground where it uses steam injection to extract oil in the large Cymric Oil Field about 35 miles west of Bakersfield. The steam softens the thick crude so it can flow more readily and is a different process from fracking, which breaks up underground layers of rock. About 70% of the fluid is water, Chevron said, meaning about 240,000 gallons of the mixture is oil. Earlier this year, a judge fined Plains All American Pipeline nearly $3.35 million for causing what had been the worst California coastal spill in 25 years. A corroded pipeline spilled 140,000 gallons of crude oil in 2015 onto Refugio State Beach in Santa Barbara County, northwest of Los Angeles, tarring popular beaches for miles, killing wildlife and harming tourism and fishing. In 2007, the container ship Cosco Busan leaked nearly 54,000 gallons of heavy fuel oil into San Francisco Bay after the ship hit the San Francisco-Oakland Bay Bridge in thick fog. The state’s worst spill was the 1969 Santa Barbara oil spill that leaked at least 80,000 barrels of crude oil into the Santa Barbara Channel. Each barrel is 42 gallons.
US zeros Venezuela, Kuwait and Nigeria crude imports as Canada flows surge: EIA — Crude oil flows between the US and Canada continued at or near record levels this month, as US importers zeroed out all imports from Venezuela, Kuwait and Nigeria for the first time since the US Energy Information Administration began tracking import data. Overall, the US imported about 7.3 million b/d of crude oil for the week ended July 5, down from an average of 7.8 million b/d in 2018, but above the weekly import average of 7.08 million b/d so far in 2019, according to the EIA. Going by monthly data, the US has imported an average of 6.91 million b/d of crude this year, which, if holds, would mark the lowest annual import average since 1993. The US' annual import average peaked at 10.13 million b/d in 2005. The US imported no crude from Venezuela, Kuwait, and Nigeria last week, due to sanctions, the rise of domestic production and an increase in Canadian imports. US refiners have imported no Venezuelan crude for seven straight weeks and for 12 out of the last 17 weeks, according to the EIA. Imports of Venezuelan crude averaged 713,000 for the week ending September 28, 2018, the highest weekly average over the past year. The US imposed sanctions on PDVSA, Venezuela's state oil company, in January, effectively creating a de facto ban on US imports of Venezuelan crude. The US has not imported a Kuwaiti barrel for four straight weeks and has not imported Nigerian crude eight separate weeks over the past year, data shows. CANADIAN CLIMB While imports are in decline, US crude exports and imports to and from Canada have risen to historic highs. US imports of Canadian crude averaged 3.95 million b/d for week ending July 5, the second-highest weekly average ever and more than half the crude imported into the US last week, according to the EIA. US imports of Canadian crude hit a record earlier this year of over 4.06 million b/d for the week ending January 18. US exports of crude oil averaged 3.05 million b/d last week, down from a record 3.77 million b/d set two weeks earlier, according to EIA. US crude exports are on track to average nearly 2.9 million b/d this year, a nearly 1 million b/d jump from 2018. The US is shipping about 20% of its crude to Canadian refiners.
Plains proposes Canadian pipeline expansions to ultimately connect to Texas - Houston's Plains All American is proposing pipeline expansions in Canada, Montana and Wyoming that would ultimately connect to new pipeline systems to deliver more Canadian crude to Houston and the Texas Gulf Coast. The series of projects would offer more alternatives to deliver lighter-grade Canadian crude to Gulf Coast markets while other controversial projects such as the Keystone XL pipeline system continue to fight legal hurdles. Plains said Tuesday it wants to essentially double the capacity of its Rangeland Pipeline from Edmonton to the U.S. border and then also expand ts connecting Western Corridor pipeline system in Montana and Wyoming. The idea is that these more affordable expansions could ultimately connect to the $2.5 billion Red Oak Pipeline system that Plains and Houston's Phillips 66 announced in June that they would build from Oklahoma to Houston, Beaumont and Corpus Christi. "We remain focused on leveraging our existing systems in creative ways to meet the growing needs of our customers," said Tyler Rimbey, executive vice president for Plains in Canada.
Canadian oil companies see output cuts easing as rail capacity grows - (Reuters) - Major Canadian oil companies, who publicly disagreed over the Alberta government’s forced curtailments this year, are in lock step over how to end the production limits, saying they should be eased as more rail capacity comes online. Senior executives from Suncor Energy, Canadian Natural Resources, Imperial Oil Ltd and Cenovus Energy said at a TD Securities investor conference in Calgary that they are in talks with Premier Jason Kenney’s Alberta government about how quickly to end the mandatory cuts.
Oil Sands Firms May Ship by Rail for Production Limit Increase -Canada’s oil-sands producers are offering to commit to shipping a certain amount of their crude by rail in return for the Alberta government raising their production limits. When Alberta introduced its curtailment policy last year as a glut weighed on Canadian oil prices, the government was counting on Enbridge Inc.’s expanded Line 3 pipeline coming into service late this year and providing enough space for producers to ship all of their output. That project was delayed amid permitting setbacks in Minnesota, leaving explorers increasingly dependent on shipping crude by rail. But the curtailment program boosted the price for their crude so much that it wasn’t economical for refiners to take deliveries of it by more-expensive rail. That has caused a large portion of Alberta’s rail-shipping capacity to be shut in. Though they didn’t provide details, the deal explorers outlined at the TD Securities Calgary Energy Conference on Tuesday would allow them to produce at full capacity and send all of their output to refineries even without new pipelines coming into service. “The problem right now has been that crude-by-rail has been relatively slow to ramp up,” Cenovus Energy Inc. Chief Executive Officer Alex Pourbaix told reporters on the sidelines of the conference. “What we’ve suggested is that government should consider modifications to the curtailment rules that would allow companies to overproduce their monthly commitments as long as they can demonstrate that that product is moving by incremental rail.” Alberta now has about 260,000 barrels of daily rail shipping capacity that’s sitting idle, Suncor Energy Inc. Chief Executive Officer Mark Little said during a panel discussion at the event, citing industry estimates and Genscape Inc. data. That’s more than the roughly 175,000 barrels of daily volume that has been held back as part of the province’s curtailment program, he said. “We’re within rounding distance of being able to literally get all of the production to market with the excess rail that’s available and get a fair price for it,” Little said. “That’s actually the objective the companies working together with the government are really focused on.”
Tankers Change Names to Ship Venezuelan Oil to Cuba -- Stopping the flow of Venezuelan oil to its ally Cuba might prove harder than the U.S. expected. Tankers are being renamed and vessels are switching off their transponders to sail under the radar of the U.S. government. The vessel Ocean Elegance, an oil tanker that has been delivering Venezuelan crude to Cuba for the past three years, was renamed Oceano after being sanctioned in May. The ship S-Trotter, another one that’s on the sanctions list, is now known as Tropic Sea, according to data compiled by Bloomberg. The oil tanker Nedas, after being sanctioned in April, made a delivery to Cuba incognito because it turned off its satellite tracking system. It went unaccounted for 42 days, but shipping reports show that it delivered oil to Cuba. After the ghost delivery, it discreetly changed its name to Esperanza. The Nedas/Esperanza has delivered 2 million barrels of crude to Cuba this year, according to shipping reports. Halting the flow between the two countries may prove difficult. There are over 4,500 crude oil tankers in operation globally, and state oil giant Petroleos de Venezuela SA also uses oil products vessels, adding to the complexity of the task. Nevertheless, the U.S. continues to target shipments between the two countries and aims to close loopholes in sanctions, according to a senior U.S. administration official. The goal is to surgically and methodically cut off funds to the regime of President Nicolas Maduro. “The United States will continue to target entities involved in shipping oil between the two countries (Venezuela and Cuba) and aims to further cut off Maduro and his cronies’ access to funds derived from oil sales to Cuba,” National Security Council spokesman Garrett Marquis said by email. “Those who circumvent sanctions do so at their own risk.”
Power outage hits Venezuela’s largest refinery complex, says lawmaker - Venezuela’s largest refinery complex has been hit by a power outage, at a time of acute fuel shortages in parts of the crisis-torn oil producer, an opposition lawmaker said Sunday. Luis Stefanelli, a deputy in the National Assembly, told AFP there was a “general blackout” at the Amuay and Cardon refinery complex Saturday night. “Access to both refineries has been closed and they have been taken over by the National Guard and officials of the SEBIN intelligence service,” he said. “Some workers have been detained,” Stefanelli added. Despite having the world’s largest oil reserves, Venezuela has experienced growing fuel shortages as corruption, mismanagement and, more recently, U.S. sanctions take their toll on the oil industry. Power failures are common in Venezuela and have grown in frequency since March, especially in the interior of the country, which has also seen long lines at gasoline stations. State oil company PDVSA has made no comment on the situation, which Stefanelli said had left most of the Paraguana peninsula where the refineries are located without power. A Paraguana resident told AFP that telephone lines were down and surrounding areas “continue to be without light.”
Cuadrilla to restart fracking at site in Lancashire - The first company to drill for shale gas in the UK plans to restart fracking at its Preston New Road site in Lancashire in a last-ditch effort to convince policymakers to relax safety rules.Cuadrilla will drill a second well near Blackpool after it was forced to abandon the first, which caused multiple earth tremors.It plans to remobilise its drilling and fracking equipment within the coming months to test gas flows from the site before its permission expires in November.Francis Egan, the company’s chief executive, plans to use the data to convince the government and regulators to loosen the safety rules that have slowed the progress of the UK shale industry. He said the work could help to make a case for the UK’s controversial shale ambitions by proving that the Bowland Shale region offers a “hugely exciting opportunity for the UK”. Cuadrilla has struggled to convince the public among growing opposition to shale gas exploration and protests by environmental campaigners. Fracking involves pumping high-pressure water, sand and various chemicals into tightly packed shale rock formations. The process fractures the rocks and releases the gas contained within the shale layers.Egan said it was no secret that Cuadrilla had asked for the “exceedingly low” tolerance for earth tremors to be lifted.“It remains the case that we are the only UK operator currently able to move forward and provide more data to support an expert review of this threshold – and we intend to do so,” he saidIneos, the chemicals giant owned by the billionaire Sir Jim Ratcliffe, has an extensive portfolio of shale sites across North and South Yorkshire, the East Midlands and Cheshire. However, Britain’s richest man has been unable to move ahead with plans for Ineos to become the UK’s largest fracking firm because of opposition from local councils.
Fracking ban in Republic 'null and void' if there is drilling in Fermanagh - A fracking ban in the Republic introduced two years ago will effectively be rendered “null and void” if Northern Ireland authorities grant permission for drilling in Co Fermanagh, campaigners claim. “It might as well be happening in Sligo and Leitrim, ” according to Jamie Murphy of the Love Leitrim campaign group. “Rossinver in Leitrim is a few minutes away from Garrison in Fermanagh.” In September 2016, Tamboran Resources UK applied to Northern Ireland’s department of the economy’s minerals and petroleum branch for permission to begin fracking across 608sq km in southwest Fermanagh. Love Leitrim, Leitrim County Council and hundreds of other campaigners in the Republic have made submissions opposing the licence ahead of the deadline for submissions on Friday. In its submission Leitrim County Council voiced “fundamental opposition” to the plan, saying it will have “lasting adverse consequences” for the county’s environment and the health of people living there. Shale gas extraction “risks contaminating ground water”, the local authority said. Tamboran’s proposed drilling site is close to both Lough Macnean and Lough Melvin. In its submission Love Leitrim said Tamboran’s application should not even be considered by the North’s department of the economy because the application claimed to cover exploratory drilling only but would in fact clear the way for full-scale production. Mr Murphy said the fact the North remained without a functioning Stormont assembly and Northern executive made matters more difficult “because we are dealing with faceless civil servants”.
U.S. oil makes it to Ukraine in another blow to Moscow - (Reuters) - U.S. crude exports are gaining traction in Europe as even Ukraine turns into a significant consumer of American barrels at the expense of Russian supplies amid heightened U.S. political pressure on Moscow and problems over contaminated Russian oil. Ukraine this month received its first ever barrels from the United States, according to Refinitiv Eikon flows data, as the tanker Wisdom Venture unloaded 80,000 tonnes of Bakken crude in Odessa on July 6 for the Kremenchug refinery, the port said. The oil was sold by BP (BP.L) to Ukrtatnafta, sources said, adding Ukrtatnafta will receive a further similar amount of U.S. crude around July 24, and more purchases were likely in August. “The Ukrainian oil industry is set to rise from the ashes with its new president (Volodymyr) Zelenskiy, so it’s an obvious new market for the United States, though the price matters,” a trader in a European oil major said. Ukraine’s oil sector, formerly mostly operated by Russian companies, has struggled since geopolitical tensions between the countries escalated in 2013-2014. Since then most of the country’s refineries have remained closed and the only oil supplied to Odessa is Azeri Light, sourced by Azerbaijan’s SOCAR. Since January 2019 it has supplied 320,000 tonnes, Refinitiv Eikon flows data shows. U.S. oil has yet to become a common feedstock for European buyers, who complain about volumes and varying quality, but recent market changes have shown American barrels can be a reliable alternative, traders said. The crisis that erupted at the end of April over contaminated Russian oil delivered through the Druzhba pipeline caused buyers to look for alternatives. “Refiners who were solely reliant on Druzhba supplies have been forced to test alternatives and could easily make these their new baseload barrels given the contamination issue has taken so long to sort out,” said Matthew Holland at Energy Aspects. As a result, U.S. supplies to Europe have risen steadily since May and have remained above 2.5 million tonnes a month.
Here's Putin's Answer To The U.S. Shale Boom - Last week saw Japan’s Mitsui and Japan Oil, Gas and Metals National Corporation agree to buy a 10% stake in Novatek’s Arctic LNG (liquefied natural gas) 2 project for an officially undisclosed price, although Russia’s President Vladimir Putin independently stated that the investment would be around US$3 billion. The fact that Putin himself commented on the deal underlines how important the exploration and development of the Arctic region is for the Russian state as a source of potentially vast new oil and gas resources and the accretion of further geopolitical influence, akin to the game-changing shale industry for the U.S.. Russia’s current development of the Arctic region is centered around the Yamal Peninsula and led principally Novatek but further developments are in the offing from Gazprom and Gazprom Neft, even in the face of current and future U.S. sanctions. Novatek’s main Arctic project, the Yamal LNG (unofficially referred to as ‘Arctic 1’) last week announced that it produced 9.0 million tons of LNG and 0.6 million tons of stable gas condensate in the first half of this year, with all three LNG trains running above the 5.5 million tons per annum (mtpa) nameplate capacity over that period. This resulted in 126 LNG tanker shipments being dispatched in the six month period via trans-shipment from the ice-class LNG carriers to conventional vessels in Norway and delivered onto the global markets, mostly to Russia’s key target markets in Asia. Overall, the Yamal LNG project consists of a 17.4 mtpa natural gas liquefaction plant comprised of three LNG trains of 5.5 mtpa each and one LNG train of 900 thousand tons per annum, utilising the hydrocarbon resources of the South-Tambeyskoye field in the Russian Arctic. “Additionally supportive of success for further developments is that the Arctic is an absolute priority for the government, aimed at bringing Russia’s LNG standing in the world market into line with its status as a global gas superpower, as its LNG capability has always been way behind what its gas production power would warrant,” he said. In this context, U.S. sanctions imposed after Russia took over Crimea in 2014 only made Putin more determined that the Arctic LNG program would not fail. Moscow not only initially bankrolled Yamal LNG from the beginning with money directly from the state budget but also later in 2014 supported it again by selling bonds in Yamal LNG (the program began on 24 November 2015, with a RUB75 billion 15-year issue). It further provided RUB150 billion of additional backstop funding from the National Welfare Fund.
Russia's Dirty Oil Crisis Leaves Pipe Giant Scarred-- As the biggest disruption to Russian oil flows in decades draws to a close the country’s European market looks remarkably unscathed, but its pipeline operator bears a few scars. For Transneft PJSC -- the giant company that runs enough pipes to wrap five times round the Earth -- the worst didn’t happen. There’s little sign that buyers are turning away from Russian crude, despite the crucial Druzhba supply network being shut down for weeks by chemical contamination. Yet the relief of retaining customers will be tempered by large compensation claims yet to be resolved, and potentially costly changes happening in Transneft’s domestic operations. The Druzhba incident “exposed weak links in the Russian oil transportation system,” said Vitaly Yermakov, senior research fellow at the Oxford Institute for Energy Studies. The way Transneft responds “will become a litmus test” for the company and Russian energy regulators, he said. The Druzhba crisis started small, with warnings in April about high levels of organic chlorides in Belarus’s portion of the pipeline. But it rapidly morphed into an international incident. It emerged that Russia, which has always prided itself on being a reliable energy exporter to Europe, had pumped millions of barrels of tainted oil to customers. The mistake brought the country “very serious damage” economically, financially and in terms of public image, according to President Vladimir Putin. “It’s the first time we are facing such a situation,” Transneft spokesman Igor Dyomin told Bloomberg. “It’s still too early to make any wrap-up analysis but we’ll definitely do it.”
Growth in Argentina’s Vaca Muerta shale and tight gas production leads to LNG exports -- Argentina’s domestic natural gas production has been rising steadily in the past three years, largely because of increasing production from the Neuquén Basin’s Vaca Muerta shale and tight gas play. Production from Vaca Muerta surpassed 1.0 billion cubic feet per day (Bcf/d) in December 2018. As production has grown, Argentina has resumed exporting natural gas by pipeline to neighboring Chile and Brazil and has started exporting liquefied natural gas (LNG). Argentina’s first LNG export cargo was shipped on June 6 from the offshore Tango floating liquefaction unit (FLNG). The growth in Argentina’s shale and tight gas production has partially offset declines in its natural gas production from mature fields. Production from Vaca Muerta accounts for about 23% of Argentina’s total gross natural gas production. The Vaca Muerta shale formation has technically recoverable resources of 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate within 8.6 million acres, and it is geologically comparable to the Eagle Ford shale play in southern Texas. Only 4% of Vaca Muerta’s acreage has entered the development phase so far. Argentina’s domestic natural gas production exceeds consumption during warmer months (October through April), but production is insufficient to meet demand during colder months (May through September), which requires Argentina to import natural gas by both pipeline and as LNG. Because Argentina doesn’t have geologically suitable formations to serve as large-scale natural gas storage facilities, natural gas producers have to shut in surplus production to accommodate seasonal consumption patterns. Argentina is conducting feasibility studies to identify potential natural gas storage sites. From 1990 through 2007, Argentina was a net exporter of natural gas. Since then, Argentina has been importing more natural gas both by pipeline (mainly from Bolivia) and as LNG. Argentina imports LNG using a floating storage and regasification vessel (FSRU) moored at the Escobar port near Buenos Aires.
Nigeria oil pipeline fire in Lagos kills two after vandalism - Two people died after a gasoline pipeline owned by Nigeria’s state oil company exploded in an area of Lagos, the commercial capital, the National Emergency Management Agency said.The fire, which began in the early hours of Thursday, was later contained and extinguished while the pipeline was closed for repairs, the Nigerian National Petroleum Corp. spokesman Ndu Ughamadu said by phone from Abuja, the capital.As many as 30 vehicles were burnt, Lagos-based Punch newspaper said, citing the emergency team.
Shell under fire over effect of Bonga oil spill on 170,000 fishermen --The Royal Dutch Shell has come under criticism as a group, Oil Spill Victims Vanguard, OSPIVV, on Thursday said over 170,000 fisher-persons, as well as 350 communities along the coastlines between Bayelsa and Delta States, were negatively impacted by the 2011 Bonga oil spill in Nigeria. OSPIVV Executive Director, Harrison Jalla made the assertion at a press conference held in Effurun, Uvwie Local Government Area, disclosing that the communities were impacted when Royal Dutch Shell and its subsidiaries (Shell International Trading and Shipping Company, SNEPCO) out of alleged gross negligence in their Bonga Field operations discharged over 40,000 barrels of crude oil into the Atlantic Ocean. “The pollution from the discharge which covered a distance of over 185 kilometres along the Nigeria Coastline compelled Fisher persons to desert the sea, polluted farmlands, vegetation and contaminated the environment in Ekeremo, Southern Ijaw and Brass Local Government Areas of Bayelsa State. “While in Delta State, Warri South-West, Warri South, Warri North, BURUTU and some Riverine areas in Ondo.” Jalla however expressed confidence that he will be victorious in the suit he filed against Royal Dutch Shell and its subsidiaries (Shell International Trading and Shipping Company, SNEPCO). Jalla had dragged the Royal Dutch Shell and its subsidiaries since 21st September 2017 before an English Court through his lawyers, John&Steller Solicitors of Hanover Square Mayfair London. He is seeking for benefits of individual claimants and communities negatively impacted by the Bonga Spill by the Bonga Oil Spill of December 20th, 2017. Jalla is praying the English Court to compel Royal Dutch Shell and its subsidiaries to do the clean-up, rectification, restoration, compensation and damages occasioned by the negative impact of the December 20th, 2011 and having adduced our evidence, said, “We are sure of victory”.
KPC moves to investigate oil spill as encroachment bites - Kenya Pipeline Company (KPC) will outsource the services of a contractor to investigate the cause of the recent oil spill in Kiboko, Makueni county, the management has said, even as it remains concerned over encroachment on its land. Chairman John Ngumi on Tuesday told journalists in Nairobi the tendering process will commence “soon”, to find the suitable individuals for the audit of the new Mombasa-Nairobi pipeline. The 450km Mombasa-Nairobi Pipeline, operationalised in July last year, developed leakage problems barely a year after it began moving petroleum products from Mombasa to Nairobi, a move that has raised questions over the quality of work. Line 5, as it is commonly known, was developed by Lebanese-Zakhem Construction through a Sh48 billion tender. Oil spillage hit Kiboko natural springs along the new pipeline on March 30. According to Ngumi, KPC will commission two types of audits-a contractual audit and an inline audit, which will involve a technical aspect of testing the pipe from Mombasa all the way to Nairobi. “An instrument will be placed in the pipeline which will analyse the quality, corrosion and identify whether there is a leakage,” Ngumi said at the KPC headquarters, “This will determine whether we have what was meant to be delivered. As at the moment, we don’t know what happened.”
Penguins rescued in Algoa Bay oil spillage - South African National Parks marine rangers have managed to rescue four oiled penguins following this weekend's oil spill off the Port of Nquga in Algoa Bay. This follows an incident that occured in the early hours of Saturday morning, where approximately 200 to 400 liters of fuel was spilled into the sea as a result of overflow during an oil transfer.SANParks spokesperson, Fayroush Ludick, says rangers had initially observed six penguins on St Croix but only managed to catch four, while two more were oil covered penguins were seen on Bird Island. She says four of the birds have since been handed over to the animal rescue and rehabilitation organization SANCOBB and that its a matter of waiting for favourable weather conditions to try and recover the other oiled birds. The Eastern Cape Manager of SANCOBB Stacey Webb - says there is the possibility that more birds were affected as the oil spill occurred while they were off Bird Island and St Croix Island feeding. She says they'll be monitoring the Bay's penguin population closely over the next few days. "Three of them have 90% of their bodies covered in very thick black oil. One of them is 75% covered. It depends on the amount of oil they have ingested. They are strong birds and we hope they will be OK," Webb said.
Bunkering services oil spill in Port Elizabeth under investigation -The South African Maritime Safety Authority (SAMSA) over the weekend said that an investigation is underway to establish the cause of the oil spillage incident during a bunkering service off the port of Ngqhura near Port Elizabeth on Saturday morning. This follows confirmed reports of an oil spillage at sea while a trade vessel was being refuelled. It was reported that as much 200-400 litters of fuel spilt into the ocean. However, the bunkering services company involved, SA Marine Fuels, soon activated an oil spillage control exercise to contain its spread on water. A Department of Environmental, Forestry and Fisheries’ statement on Saturday said the vessel involved was the Liberia flag carrying trade ship known as the MV Chrysanthi S. The department said it had been “notified of an oil spill that took place in Algoa Bay in the early hours of Saturday. The incident took place at approximately 04h40 (in the) morning during offshore bunkering operations in Anchorage 1 of the Port of Nqura.“It was reported that approximately 200 to 400 litters of fuel from the receiving vessel MV Chrysanthi S, flag state Liberia, was spilled into the sea as a result of overflow during the fuel transfer. SA Marine Fuels proceeded to dispatch a commercial oil spill response service provider to mitigate and contain the spread of the spill.“This incident is currently considered a Tier 1 level incident which does not require intervention from the national authorities as local resources are sufficient. The department will provide assistance if the incident escalates and requires it.”
Refuelling under scrutiny as S.Africa penguins hit by oil spill - Rangers in wet suits have been searching for oil-tarred penguins in shallow water around St Croix Island off the South African coast as a refuelling spill highlights conservationists' fears over pollution. Experts said an unknown number of penguins had been affected on the rocky, uninhabited island, which is home to the largest breeding colony of endangered African penguins in the world. A Liberian-flagged ship spewed between 200 and 400 litres of oil into the sea off Port Elizabeth city during "bunkering" re-fuelling -- the process of filling a ship with fuel from another vessel. The small-scale leakage from the bulk carrier MV Chrysanthi vessel at dawn on Saturday was the second oil spill in the environmentally-sensitive area in three years. "This is exactly the concern with offshore 'bunkering' that we have been voicing concerns about," Stacey Webb, of the Southern African Foundation for the Conservation of Coastal Birds (SANCCOB) charity, told AFP. "The danger is not over yet. Penguins forage up to 100 kilometres (60 miles) away from the islands (St Croix Island and Bird Island) so they could run into the spill out at sea." About 20 penguins covered in black sludge have been rescued by national parks rangers so far. The weekend spill follows one in August 2016 when about 100 birds were affected by a smaller "bunkering" spill. "Bunkering" only started in Ngqura port, part of Algoa Bay, in 2016, with the shipping industry promoting it as an economic boost for the area. Plans to develop the bay into a major re-fuelling hub for international vessels have generated widespread controversy, with conservationists and the tourism sector saying the risk of pollution is too high.
MV Takana spills oil - Reports and pictures supplied to the Solomon Star alleged the oil spill from the abandoned vessel that sunk last month at Star Harbour is now spilling hazardous oil to the environment. Some pictures provided shows coral reefs covered with brownish colour of thick oil leakage from the vessel. Director of Solomon Islands Maritime Authority (SIMA) Jonah Mitau told the Solomon Star earlier that they will investigate the wreck and see if any danger associated with the environment. But yesterday Mitau told the Solomon Star that SIMA is yet to visit MV Takana due to commitment on Rennell oil spill disaster. He said their officers are yet to complete a full report on the Rennell oil spill, therefore would not able to investigate MV Takana. He said hopefully they would able to complete their report on Rennell next week and may have time to visit MV Takana, if the oil spill there truly occurs. The constituency vessel was left abandoned by out going Member of Parliament (MP) for East Makira Alfred Ghiro and remain floating there until it drifted and overturned in the coastal waters.
China refiners curb fuel output after massive new plants stoke glut (Reuters) - China’s fuel producers are making extended curbs to their output in the third quarter after supply from mammoth new refineries stoked an already-sizeable glut, potentially dragging on crude oil demand from the world’s biggest importer of the commodity. Private refiner Hengli Petrochemical (600346.SS) ramped up its 400,000-barrels per day (bpd) plant in northeast China to full capacity in May, while Zhejiang Petrochemical began trial runs around the same time at a similar-sized refinery on the east coast. In the wake of that wave of fresh supply and amid slowing local demand for fuels such as gasoline and diesel, refiners are cutting their crude processing, or throughput, industry sources and analysts said. That drop should sap their appetite for crude imports, pulling down on international oil prices LCOc1 that have already been hit by fears over a slowing global economy. The swollen surplus of fuel products could also send China’s fuel exports surging to new highs and further pinch Asian refining profits. “For markets that are already consumed with fears about a global recession ... headline numbers of oil demand growth slowing alongside talk of run cuts seem to reinforce a bearish narrative,”
Hedge funds sell crude as economy fears trump OPEC cuts Hedge (Reuters) - Hedge funds sold more Brent futures and options last week as concerns about the global economy trumped the decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies to extend output cuts. Hedge funds and other money managers sold another 7 million barrels of Brent derivatives in the week to July 2, according to position data published by ICE Futures Europe. Portfolio managers have now sold a total of 158 million barrels over the last eight weeks, after previously buying 270 million barrels since Dec. 4 (https://tmsnrt.rs/2YBIwxa). Funds hold a net long or bullish position of just 248 million barrels, which is relatively low compared with the average of 359 million over the last four years. For the moment, the slowdown in global manufacturing and trade, and the associated hit to oil consumption, is upstaging OPEC’s decision to extend production limits for an extra 9 months until March 2020. In contrast, fund managers are becoming slightly less bearish towards middle distillates such as European gasoil, which had previously been hardest hit by slowdown fears. Funds were net buyers of 5 million barrels of gasoil futures and options contracts last week, after buying 3 million the week before, signalling the recent distillate liquidation cycle may be over.
Brent Short-Selling at 5-Month High - Hedge funds are growing more pessimistic about oil prices as sentiment on the global economy sours. Money managers pushed bets on a decline in Brent crude prices to the highest since mid-January in the week ended July 2, according to data released Friday. It was another sign of waning faith in a week that saw prices drop amid a host of sluggish reports on global manufacturing. That overshadowed a deal by OPEC and its allies to extend supply cuts. Short-selling bets on Brent climbed by 1.5%, according to the ICE Futures Europe exchange. The net-long position -- the difference between wagers on a price increase and those on a decline -- fell 2.7% to 248,006 options and futures contracts, the least bullish since February. The release of data on West Texas Intermediate crude positions was postponed until Monday, due to the July Fourth holiday in the U.S.
Oil prices tread water as market eyes global risks - Crude prices were little changed on Monday as traders weighed geopolitical risks against the impact of the Sino-U.S. trade war on the global economy, although last week’s better-than-expected U.S. jobs data offered some support. Brent crude futures were down 3 cents by 0300 GMT at $64.20. U.S. West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel. “Traders remain incredibly cautious about the dimmer global economic overhang.” Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%. U.S. job growth rebounded strongly in June, with government payrolls surging, the Labor Department’s closely watched employment report showed on Friday, suggesting May’s sharp slowdown in hiring was probably a one-off. Employers added 224,000 jobs last month, the most in five months, the report showed. But the U.S.-China trade war has dampened prospects of global economic growth and oil demand. The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the U.S. Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting. White House Economic advisor Larry Kudlow has confirmed top representatives from the United States and China will meet in the coming week to continue trade talks. Still, Japan’s core machinery orders fell for the first time in four months in May, posing the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment. Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies. Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning ‘to be careful’ from U.S. President Donald Trump, who pulled out of the pact last year.
Oil Prices Edge Up In Cautious Trade - Oil prices rose on Monday, although the upside remained capped by renewed concerns about a slowing global economy. Benchmark Brent crude edged up 0.25 percent to $64.38 a barrel while U.S. West Texas Intermediate (WTI) futures were up 0.1 percent at $57.55 a barrel. Prices remain somewhat supported by robust U.S. jobs report released last week and a flare up in geopolitical tensions. The latest jobs report showed that U.S. employment surged up by 224,000 jobs in June, the most in five months, after a gain of 72,000 jobs in May. Economists had expected employment to increase by about 160,000 jobs. Geopolitics continue to remain in focus after Iran said on Sunday it would boost its uranium enrichment, in breach of a cap set by a landmark 2015 nuclear deal. The announcement prompted a warning 'to be careful' from U.S. President Donald Trump, who pulled out of the pact last year. On the flip side, the lack of concrete progress in resolving the acrimonious trade war between the United States and China has dampened prospects of global economic growth and oil demand. As top U.S. and Chinese officials organize a resumption of talks for this week to try to resolve a year-long trade war, Chinese Vice President Wang Qishan warned against "protectionism in the name of national security", and called major powers to make more contributions to global peace and stability.
U.S. oil prices end higher as threat of Washington-Tehran conflict grows - Oil futures diverged Monday, with U.S. prices up a third straight session while global benchmark Brent finished lower, as tensions with Iran, and the possibility of disruptions to oil flow in the Middle East, increased. Concerns surrounding energy demand, however, lingered. Geopolitical tensions with Iran have heated up, while oil demand expectations seem to be coming down, said Phil Flynn, senior market analyst at Price Futures Group. August West Texas Intermediate crude edged up by 15 cents, or 0.3%, to settle at $57.66 a barrel on the New York Mercantile Exchange, posting a gain for a third consecutive session. The contract lost 1.6% for last week, according to Dow Jones Market data. International benchmark September Brent lost 12 cents, or 0.2%, to $64.11 a barrel on ICE Futures Europe. Brent declined 0.8% for last week.Iran is claiming that it is enriching uranium above the levels agreed to in the Iran nuclear deal, said Flynn, in daily commentary. “They are also threatening retaliation for the U.K. taking an Iranian oil tanker [last week]. They have threatened to seize U.K. ships and turn the Persian Gulf into a sea of blood.” Iran’s Foreign Ministry spokesman Abbas Mousavi called the seizure of the Iranian supertanker “piracy,” but stopped short of suggesting Iran take actions against ships transiting through the Strait of Hormuz, the Associated Press reported Monday. The Strait is the world’s most sensitive oil-transportation choke point. “Iran’s violation of the [nuclear] agreement could now prompt Europe to impose sanctions on Iran, too. For example, the EU could impose an oil embargo on Iran, as it did between 2012 and 2015,” said Carsten Fritsch, energy analyst with Commerzbank. “This would have no direct impact on Iranian oil exports as Europeans have in any case not bought any Iranian oil since the end of 2018 because of the U.S. sanctions; this is presumably one reason for Iran’s dissatisfaction and for the aforementioned ultimatum.”
Persian Gulf Conflict Could Send Oil Beyond $325 -- If attacked by U.S. and allied forces, or if it believes an attack is imminent, Tehran may choose to launch airstrikes and missiles on American military forces and regional allies such as Saudi Arabia and the UAE while it still has the capability to do so. This ‘use them before you lose them’ strategy would largely be based on Saddam Hussein’s experience in Iraq. The impact of a closure of the Strait of Hormuz on global crude prices obviously depends on the amount of oil kept off the world market on a daily basis and the duration of the disruption. Based on the discussion in the previous section, we explore two scenarios that relate directly to the Strait of Hormuz, and a third one that includes a Persian Gulf War. In the Optimistic Scenario, where the Strait of Hormuz is only closed to commercial traffic for a few days, the impact on global oil supplies would be relatively minimal, but we would still see a brief spike above $100 per barrel due to the initial uncertainty surrounding its outcome. Crude prices would then quickly fall back to pre-crisis levels. The flow of 20.7 million b/d of crude and petroleum product would be curtailed if the Strait of Hormuz is fully closed, but this would be mitigated by almost 4 million b/d of crude being shipped on currently spare pipeline capacity across Saudi Arabia to Red Sea export facilities and the Abu Dhabi Crude Oil Pipeline bypassing the Strait of Hormuz. Under the Pessimistic Scenario, the world’s oil emergency response system would be taxed to its maximum in the first two months of the crisis – assuming the Strait of Hormuz is fully closed for the first 45 days, and a straight line resumption in oil tanker traffic over the next 45 days – leading to historically high crude oil prices on an inflation-adjusted basis for an extended period. Global strategic oil reserves would be more than enough to cover the shortfall in an overall sense, with 40 percent of the 1.9-billion-barrel total remaining post-crisis, but the rate of daily withdrawal from strategic reserves would pose a challenge. Previous studies suggest that a maximum of 14.4 million b/d of crude and product could be released from the International Energy Agency (IEA) member country reserves in the first month and roughly 12.5 million b/d in the second month, compared to disruptions of 16.9 million b/d and 15.5 million b/d, respectively, based on our assumptions. Finally, in a Doomsday Scenario, where there is significant damage to Persian Gulf oil-producing and export infrastructure as well as a three-month closure of the Strait of Hormuz, crude oil prices would rocket into the stratosphere. They would not begin to fall back until the global economy collapses into deep recession. A direct hit on Saudi Aramco’s Abqaiq oil processing facility alone could deprive the world market of 7 million b/d for a year or more as the plant is repaired.The impact of this and other Persian Gulf production losses could be mitigated somewhat by the remaining 40 percent of the world’s strategic reserves, as well as 200 million b/d of crude that Saudi Arabia holds in reserve at home assuming Saudi export facilities remain relatively intact.
Oil rises towards $65 as supply concerns outweigh trade disputes - Oil rose towards $65 a barrel on Tuesday as OPEC supply cuts and Middle East tensions outweighed the U.S.-China trade dispute that has been dragging down the global economy and oil demand. OPEC and its allies led by Russia agreed last week to extend their supply-cutting deal until March 2020. Brent has risen almost 20% in 2019 supported by the pact and also tensions in the Middle East, especially concerns about the row over Iran’s nuclear program. Brent crude, the global benchmark, rose 33 cents to $64.44 a barrel. U.S. West Texas Intermediate crude was up 26 cents to $57.92. “OPEC and its allies are doing their best to support the market,” said Tamas Varga, an analyst with PVM. “Oil prices are to hold up reasonably well during coming months or at least they are not to fall out of bed.” Rising tensions between Iran and the United States have brought the two countries close to conflict. Last month, President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone. The European Union on Tuesday urged Iran to reverse its scaled up uranium enrichment that breaches a nuclear deal it agreed in 2015 with world powers. Washington withdrew from the accord last year and re-imposed sanctions. Oil also gained support from reports expected to show a drop in U.S. crude inventories.
Middle East Tension Boosts Oil Prices - Oil prices edged up at the start of the week due to the OPEC+ cuts and rising U.S.-Iran tension. Trade and economic concerns continue to keep prices in check, however. Iran said that it exceeded the 3.67 percent uranium enrichment level laid out in the 2015 nuclear deal, and in recent days exceeded 4.5 percent. Iran said that it would continue to pull out of parts of the accord on an ongoing basis until Europe delivers on some of the benefits laid out in the accord. The decision will increase tension with the U.S. and put pressure on Europe to carry out its promises to Iran. But it may also push Europe away and it increases the odds of punitive action from the EU.Russian oil production fell to athree-year low at the start of July, the result of lingering effects from the pipeline contamination crisis. “The Russian story definitely supports prices today. Market participants remain concerned that Russian compliance could deteriorate again, and lower Russian output together with elevated compliance from OPEC nations should rebalance the oil market faster,” said Giovanni Staunovo, oil analyst for UBS, according to Reuters.China’s refiners are cutting runs after a wave of new refineries came online and created a glut of supply. Tepid demand is also exacerbating a fuel surplus. As a result, China’s oil imports could stagnate, a negative for the global oil market. “For markets that are already consumed with fears about a global recession ... headline numbers of oil demand growth slowing alongside talk of run cuts seem to reinforce a bearish narrative,” said Michal Meidan, a London-based analyst at Energy Aspects, according to Reuters. In a move that angered both sides of the ethanol versus oil refining battle, the EPAproposed higher blending requirements for refiners in 2020, but declined to scrap previously issued waivers. The Trump administration more than quadrupled the volume of waivers issued to refiners, roiling the market for ethanol and for credits that can be bought and sold by refiners. Iran said that the seizure of its ship in Gibraltar by the UK won’t go “unanswered.” BP reportedly rerouted one of its tankers heading for Iraq to Saudi waters over fears of retaliation. Despite an economic and political crisis and crippling sanctions, Chevron has not pulled out from Venezuela, even as most other international companies have already done so. Chevron received a waiver from the U.S. government to continue operating, and the company expects to profit from production if Maduro stays in power, or be first in line to a potential historic privatization if opposition forces take over.
U.S. oil prices tally a fourth straight session gain - Oil futures gained on Tuesday, with U.S. prices logging a fourth straight session gain, buoyed by tensions with Iran that threaten the global flow of oil and by expectations for a weekly decline in U.S. crude supplies. Concerns over a slowdown in energy demand, however, have kept prices in check. Traders also awaited Congressional testimony this week from Federal Reserve Chairman Jerome Powell and any hints on the likelihood of an interest-rate cut later this month. August West Texas Intermediate crude rose 17 cents, or 0.3%, to settle at $57.83 a barrel on the New York Mercantile Exchange, following three straight session of gains. The settlement was the highest for a front-month contract since July 1, FactSet data show. International benchmark September Brent, which had diverged from its U.S. counterpart a day earlier, climbed 5 cents, or nearly 0.1%, to $64.16 a barrel on ICE Futures Europe. Rising tensions between Iran and the United States have brought the two countries close to conflict and threatened the security of major oil transportation choke point, the Strait of Hormuz. Last month, President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone. The European Union on Tuesday urged Iran to reverse its scaled-up uranium enrichment that breaches a nuclear deal it agreed in 2015, Reuters reported. The Trump administration withdrew from the accord last year and imposed oil-focused economic sanctions. “Geopolitics, and more specifically the threat of more military activity between the U.S. and Iran, is one of the only remaining bullish factors supporting the energy market right now, as the supply fundamentals are roughly balanced between an extension in OPEC+ policy but stubbornly elevated U.S. output,”
WTI Spikes After Huge Crude Draw - Oil prices gained modestly on the day, with WTI rallying up to $58 ahead of tonight's API inventory data, despite another tanker being seized (by Egypt this time).“Given the continued presence of sanctions and tensions between the U.S. and Iran, the ongoing trade war between the U.S. and China, and the potential for an economic slowdown, oil prices are likely to remain volatile in the short term," said Michael Laitkep, an analyst at Alerian, which tracks energy infrastructure companies.But for tonight, and tomorrow morning, all eyes are on the fundamental side... API
- Crude -8.129mm (-2.5mm exp)
- Cushing -754k
- Gasoline -257k
- Distillates +3.690mm
Crude inventories were expected to drop in the last week (after 3 previous weeks of draws) but the huge 8.1mm crude draw was a big surprise (everyone is ignoring the distillates build for now)... WTI hovered around $58.00 ahead of the print, and exploded higher (above $59) on the huge draw...
Oil rises more than 1% after US stockpile drop - Oil prices rose on Wednesday, led by U.S. crude after an industry group reported that U.S. stockpiles fell for a fourth week in a row, alleviating concerns about oversupply amid global trade tensions. West Texas Intermediate (WTI) crude had climbed 81 cents, or 1.4%, to $58.64 by 0151 GMT. Brent was up 61 cents, or 1%, at $64.77, having earlier hit $64.95. The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russia have honored commitments to cut output. Investors have also been on the lookout for any signs that unrelenting production from the United States is being consumed. U.S. crude stockpiles fell more than forecast last week, while gasoline inventories decreased and distillate stocks built, data from industry group the American Petroleum Institute (API) showed on Tuesday. Crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels, according to the data. Official figures from the government’s Energy Information Administration (EIA) are due later on Wednesday. “Prices are finely balanced right now as investors await fresh stimulus,” said Fawad Razaqzada, technical analyst at FOREX.com. “The stimulus could come in the form of a sharp change in U.S. crude oil inventories.” Oil prices have been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. Lower economic growth typically means reduced demand for commodities such as oil.
WTI Fails To Extend Gains Despite Huge Crude Draw - Oil prices have extended their gains overnight after the much bigger than expected crude draw suggested by API, and helped by an uber-dovish Powell and a re-emergence of tensions with Iran (Trump threatening more sanctions imminently). “The crude draws reported by the API yesterday were much larger than the market was expecting,” said Warren Patterson, a senior commodities strategist at ING Bank NV. “That is the key catalyst behind the move higher.” DOE:
- Crude -9.50mm (-2.9mm exp)
- Cushing -310k
- Gasoline -1.46mm
- Distillates +3.729mm
After API, and the market's surge, analysts shifted their expectation for a bigger crude draw than before, and rightly so as DOE reported a massive 9.50mm crude draw - the fourth weekly draw in a row. Gasoline also drew for the 4th week as distillate stocks rose. Production is perhaps rolling over but its a little too soon to tell yet (aside from the signaling from rig counts)... WTI traded around $59.50 ahead of the DOE data (having surge overnight), spiked on the big crude draw print before algos sold the news...
Oil prices jump 4.5% on U.S. crude stocks draw, Gulf of Mexico storm (Reuters) - Oil prices rose 4.5% a barrel on Wednesday to their highest level in more than a month after U.S. crude inventories shrank and as major producers cut nearly a third of offshore Gulf of Mexico production ahead of an expected storm. Brent crude futures LCOc1 settled at $67.01 a barrel, up $2.85, or 4.44 percent. U.S. West Texas Intermediate (WTI) crude futures CLc1 settled at $60.43 a barrel, climbing $2.60, or 4.50 percent. Both benchmarks hit their highest prices since late-May. U.S. crude stocks fell 9.5 million barrels in the week to July 5, shrinking more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output, the Energy Information Administration (EIA) said. “The inventory draw was much stronger than expected,” which helped to push oil prices higher, said Carsten Fritsch, oil analyst at Commerzbank. “Imports dropped and refinery utilization reached the highest level since the beginning of the year, contributing to the big draw.” A storm expected to form along the Gulf of Mexico also helped oil prices. Major oil firms began evacuating and halting production in the Gulf of Mexico ahead of the storm, which is forecast to become a hurricane by the weekend. [nL2N24B0L0]
US oil hits highest in over a month amid Gulf of Mexico storm, Iran tensions - Oil futures hit a six-week high on Thursday as a storm built in the Gulf of Mexico, threatening crude output, while an incident with a British tanker in the Middle East highlighted ongoing tensions in the region. U.S. West Texas Intermediate (WTI) crude futures were up 34 cents, or 0.6%, at $60.77 a barrel by 0337 GMT, after earlier touching the highest since May 23 at $60.83. They gained 4.5% in the previous session. Brent crude futures reversed early losses and were up 30 cents, or 0.5%, at $67.31 a barrel, after rising to as high as $67.38, the highest since May 30. They ended Wednesday up 4.4%. Five boats believed to belong to Iranian Revolutionary Guards approached a British oil tanker on Wednesday and asked it to stop in Iranian waters close by, but withdrew after a British warship warned them over radio, a U.S. defense official said on Thursday. Tensions have been high in the Middle East after attacks on tankers and the downing of a U.S. drone by Iran last month, following President Donald Trump’s unilateral withdrawal from a multi-party agreement with Tehran to end its nuclear program. U.S. oil producers on Wednesday cut nearly a third of Gulf of Mexico crude output ahead of what could be one of the first major storms of the Atlantic hurricane season. Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a U.S. regulator as oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday. Oil prices were also supported by a decline in U.S. inventories. U.S. crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output.
Oil prices rise amid Gulf of Mexico storm, Middle East tensions - Oil prices rose on Friday, hovering near six-week highs, as U.S. oil producers in the Gulf of Mexico cut more than half their output in the face of a tropical storm and as tensions continued to simmer in the Middle East.Brent crude futures were up 29 cents, or 0.4%, at $66.81 per barrel by 0300 GMT. The international benchmark settled down 0.7% on Thursday after hitting its highest since May 30 at $67.52 a barrel. U.S. West Texas Intermediate (WTI) crude futures were up 31 cents, or 0.5%, at $60.51 a barrel. The U.S. benchmark marked its highest level since May 23 in the previous session at $60.94.By Thursday, oil companies in the Gulf of Mexico had cut more than 1 million barrels per day (bpd) of output, or 53% of the region’s production, due to Tropical Storm Barry which could make landfall Saturday on the Louisiana coast.The storm was forecast to become a category one hurricane with at least 74-mile-per hour (119 km-per-hour) winds.“Brent crude oil ... extended its gains as storms in the Gulf of Mexico halted production of oil and U.S. oil inventories continued to recede more than expected,” ANZ Bank said in a note. U.S. crude oil inventories have decreased for four consecutive weeks. Crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, a drop that was more than triple the 3.1 million-barrel draw expected by analysts.
Lower anticipated global economic growth reduces expectations for 2019 global oil demand - In its July 2019 edition of the Short-Term Energy Outlook(STEO), EIA forecasts that global liquid fuels consumption, which averaged 99.9 million barrels/day (b/d) in 2018, will grow by 1.1 million b/d in 2019 and by 1.4 million b/d in 2020. EIA has revised down its expectation for global liquids demand growth for six consecutive months. This revision reflects slower expected economic growth in many of the world’s largest oil-consuming countries, lower than expected oil consumption so far this year, and higher crude oil prices. One of the main drivers of EIA’s global oil consumption forecast is global gross domestic product (GDP) based on country-level forecasts from Oxford Economics. EIA calculates an oil-weighted GDP by using relative magnitudes of oil consumption in each country. EIA revised the 2019 oil-weighted GDP growth rate from 2.9% in its January STEO to 2.2% in its July STEO. If realized, this 2.2% growth rate would be the lowest annual growth rate since 2009 and one of the main reasons for slower growth in global liquids consumption.The July STEO forecast for 2019 also includes historical 2019 liquid fuels consumption data for the first quarter of the year for countries that are members of the Organization for Economic Cooperation and Development (OECD). Non-OECD consumption estimates were also updated to reflect new GDP data. Consumption during this period was less than forecast in the January STEO. EIA attributes lower than expected OECD oil consumption earlier this year to relatively warm weather in Europe in February and March, which reduced heating oil consumption; slowing GDP growth; and a slowdown in Europe’s manufacturing sector. Weather was also a likely cause for U.S. liquid fuels consumption in the second quarter of 2019 to be less than EIA had forecast at the beginning of the year. Initial estimates for May and June support the possibility that flooding in the Midwest affected the planting season for some farms. Because of the flooding, farmers likely reduced their consumption of diesel fuel for farming equipment. In addition, crude oil prices affect the price of refined fuel prices, and higher fuel prices, all other factors being equal, typically cause fuel consumption to decline.
Oil markets will see another glut in 2020, IEA predicts --The International Energy Agency (IEA) expects the return of an oversupplied oil market next year, despite the recent rollover of an OPEC-led pact designed to restrain any glut. The energy agency said the “main message” of its closely-watched report was that oil supply in the first six months of 2019 had exceeded demand by 0.9 million barrels per day. “This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter,” the Paris-based IEA said Friday. Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC on Friday that in addition to the remainder of this year, the outlook for 2020 is also for “considerable oversupply because we are getting big growth from the United States and some other countries.” “So, as far as the issue of re-balancing is concerned, as we say in the lead article in today’s report, re-balancing is still some way off,” Atkinson said. OPEC and its allies, led by Russia, have kept 1.2 million barrels per day off the market since the start of the year. The energy alliance, sometimes referred to as OPEC+, last week renewed the pact until March 2020 to avoid a build-up of inventories that could hit prices. “The widely-anticipated decision by OPEC+ ministers to extend their output agreement to March 2020 provides guidance but it does not change the fundamental outlook of an oversupplied market,” the IEA said. International benchmark Brent crude traded at around $66.99 Friday morning, up around 0.7%, while U.S. West Texas Intermediate (WTI) stood at $60.52, around 0.5% higher. Concerns that global demand is slowing caused Brent to decline by 10% in June, despite supportive geopolitical factors, the IEA said. The energy agency said Friday that it expects a 2.1 million barrels per day expansion of non-OPEC oil supply next year, largely driven by soaring U.S. production. That would mark a slight increase from 2 million barrels per day in 2019, lowering the requirement of OPEC crude.
Oil flat as tropical storm limits output, glut forecasts weigh - (Reuters) - Oil prices were little changed on Friday as U.S. Gulf of Mexico crude output dropped by more than half from disruptions caused by a tropical storm, but concerns over a global crude surplus in the months ahead limited gains. Brent crude LCOc1 futures settled at $66.72 a barrel, climbing 20 cents. U.S. West Texas Intermediate (WTI) crude CLc1 futures settled at $60.21 a barrel, up 1 cent. Brent has gained 4% this week while WTI posted a 4.7% rise. Both benchmarks fell last week. Tropical Storm Barry, which is expected to become a hurricane just before making landfall this weekend, boosted crude futures as oil companies in the Gulf of Mexico sliced production. Nearly 59%, or 1.1 million barrels per day, of crude oil production in the U.S.-regulated areas of the Gulf of Mexico has been cut because of the storm, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said. “The crude oil market is being supported by the Gulf of Mexico production shut-in. ... It is going to look to see if Tropical Storm Barry becomes a major flooding event that impacts the refining sector in Louisiana and impacts gas and diesel,” said Andy Lipow, president of Lipow Oil Associates in Houston. The International Energy Agency (IEA) forecast surging U.S. oil output will outpace sluggish global demand and lead to a large inventory build around the world in the next nine months. “The IEA report is tempering any price rise that we might see from Tropical Storm Barry because the market continues to stumble under the weight of slowing economic growth,” Lipow said. The world energy watchdog’s report came a day after the Organization of the Petroleum Exporting Countries predicted a crude glut next year despite an OPEC-led pact to restrain supplies. The weekly U.S. oil rig count, an indicator of future production, fell for the second straight week, General Electric Co’s (GE.N) Baker Hughes energy services firm said. [RIG/U] Drillers cut four oil rigs in the week to July 12, reducing the total to 784, the lowest since February 2018.
Oil rises nearly 5% for the week on tropical storm and geopolitical tensions - Oil prices posted strong weekly gains on Friday as U.S. Gulf of Mexico crude output was halved by disruptions caused by a tropical storm, but concerns over a global crude surplus in the months ahead limited gains. West Texas Intermediate futures rose nearly 5% this week while Brent climbed more than 4%. On Friday, however, U.S. crude gained just 1 cent to settle at $60.21 per barrel while Brent gained 25 cents to trade at $66.77 per barrel. Tropical Storm Barry, which is expected to become a hurricane just before making landfall this weekend, boosted crude futures as oil companies in the Gulf of Mexico sliced production. “The crude oil market is being supported by the Gulf of Mexico production shut-in... it is going to look to see if Tropical Storm Barry becomes a major flooding event that impacts the refining sector in Louisiana and impacts gas and diesel,” said Andy Lipow, president of Lipow Oil Associates in Houston. Companies cut more than 1 million barrels per day (bpd) of output, or 53% of the region’s production, as the storm headed for possible landfall on the Louisiana coast on Saturday. The International Energy Agency (IEA) forecast surging U.S. oil output will outpace sluggish global demand and lead to a large inventory build around the world in the next nine months. The world energy watchdog’s report came a day after the Organization of the Petroleum Exporting Countries predicted a crude glut next year despite an OPEC-led pact to restrain supplies. “The IEA report laid bare what the market is staring down and what OPEC is staring down next year, and really for the balance for this year, and that will continue to be a headwind,”
Why This Oil Rally Won't Last - After weeks of gloom, the oil market is tightening up once again. But it’s not clear how long the upward cycle will last. OPEC admitted this week that it may need to keep the production cuts in place, perhaps beyond the latest extension, because of soaring production from U.S. shale. A combination of geopolitical tension in the Persian Gulf, outages in Venezuela and Iran, a pending interest rate cut by the Federal Reserve, and the brewing storm in the Gulf of Mexico has led to strong price increases in oil over the last few days.The rally might have “further to go,” as Standard Chartered put it in a recent note to clients. “We think the rally is likely to continue, allowing Brent to move well above USD 70/bbl and WTI to test above USD 65/bbl,” the investment bank wrote. “Fundamentals are supportive in Q3; we project a 0.5 million barrels per day (mb/d) global supply deficit,” while data from the IEA and OPEC suggests an even larger deficit, analysts with Standard Chartered said.They are not alone. The EIA reported an enormous 9.5-million-barrel decline in inventories last week.“This fourth consecutive weekly decline in US crude oil stocks shows that the US oil market is now tightening too,” Commerzbank said. Storms in the Gulf of Mexico and rising tension in the Middle East are also bullish factors. “The overall situation points to further rising oil prices in the short term,” Commerzbank concluded.But, some of these are temporary factors that could dissipate, especially with shale supply still growing quickly. In OPEC’s latest Oil Market Report, the group laid out the challenge facing oil exporters. Demand growth may only reach 1.14 million barrels per day (mb/d) this year, but supply growth from non-OPEC countries alone could top 2.05 mb/d. Next year, non-OPEC supply could jump by another 2.4 mb/d, with demand again only growing by 1.14 mb/d. In other words, OPEC+ may be stuck with the production cuts, forced to perpetually extend them in a Sisyphean attempt to keep oil prices from collapsing. The supply curtailments do indeed put a floor beneath prices, but that only serves to prop up even more shale drilling.
Two Factors That Point To A Bearish 2020 For Oil - OPEC and allies had little choice but to roll over their production cuts into the first quarter of 2020 amid higher-than-average global inventories, continued uncertainties over the global economy and oil demand growth, and rising rival oil supply, mostly from U.S. shale.The cartel and its non-OPEC partners led by Russia aim to bring the market back to balance and prop up oil prices, or at least put a floor under current prices.While the OPEC+ alliance can and does calibrate its own production, it is not in control of the current key drivers of the oil market - demand growth and rival oil supply.And the current outlook for those two variables point to an ugly oil market in 2020, oil and gas analyst Gaurav Sharma writes for Forbes.Despite rising tension in the Middle East with the U.S.-Iran standoff, despite U.S. sanctions choking off oil supply from Iran and Venezuela, and despite a fragile security situation in Libya, OPEC’s extended cuts failed to excite the market.That’s because supply from outside the OPEC+ group, especially from U.S. shale, continues to grow, inadvertently supported by the restricted supply from OPEC+. But more importantly, because market participants are currently more concerned about the state of the global economy—particularly in a still unresolved U.S.-China trade dispute—and its impact on global oil demand growth, than the likelihood of a major supply outage.Major organizations have downgraded oil demand growth forecasts to reflect uncertainties about the global economy and the U.S.-China trade war. In its June Short-Term Energy Outlook (STEO), the EIA cuts its oil demand growth forecast by 200,000 bpd to 1.2 million bpd for 2019.The International Energy Agency (IEA) also cut in June its demand growth outlook, to 1.2 million bpd this year. World trade growth is now at its slowest pace since the financial crisis ten years ago, the IEA said, citing data from the Netherlands Bureau of Economic Policy Analysis and various purchasing managers’ indices. The consequences for oil demand have already become apparent, with growth in Q1 this year at just 300,000 bpd versus a very strong Q1 2018, the lowest for any quarter since the fourth quarter of 2011.
Libya To Release All Migrants From "Detention Camps" After Tripoli Attack - In a move that will likely result in even greater political instability in Europe, which in recent years has become the primary target for every migrant holed up in Libya and just waiting for the chance to cross the Mediterranean, The New Arab reports that Libya's UN-backed government is contemplating shutting down
slave migrant detention centers and releasing all the detainees for their own safety, after airstrikes targeted one such center on Tuesday in a devastating attack which killed at least 53 people.The strike left at least 130 wounded when it hit a hangar in which the migrants were detained in the Tripoli suburb of Tajoura. In the aftermath of the deadly bombing, Fathi Bashagha, the interior minister of Libya's Government of National Accord (GNA) told the assistant to the UN special envoy to Libya, Maria do Valle Ribeiro, his government was accountable for the safety of Libyan civilians, including detained migrants.However, Bashagha said the authority did not have the capacity to protect the centers in the face of airstrikes from advanced F16 jets, according to ministry. Ribeiro also discussed the Tanjoura attack with Mohammed Al-Shibani, Libya's deputy interior minister for migration affairs, agreeing on the need to transfer the hundreds of survivors to safer accommodation. The Libyan justice ministry condemned the attack, vowing to work with humanitarian and migration organisations to repatriate the migrants or resettle them in third countries, because Libya's compromised security situation could not provide them the safety they require. Despite this, it was revealed on Thursday that around 300 migrants of the centre's original 600 detainees were still being held there, while the International Organisation for Migration (IOM) said it was providing humanitarian assistance to the remaining detainees. The IOM was unable to confirm reports that dozens of migrants had fled on Tuesday night after the raid.The UN's humanitarian office OCHA, quoting survivors, said guards at the centre fired on migrants trying to flee causing no casualties, but the GNA interior ministry denied this as "rumours and false information". Needless to say, a similar rumor in the US - where migrant detention centers have become the focal talking point in domestic politics - could well spark a second civil war.
Turkey Charged With Running Foreign Terrorist “Rat Line” Into Libya - Libya was once a key embarkation point for jihadists headed to foreign battlefields - first in the 1980s Afghan-Soviet War where they supported the CIA-backed mujahideen, and more recently in Syria, where both massive jihadist manpower and heavy weaponry were transferred to the killing fields of Aleppo and Idlib (also, it should be noted, in support of CIA regime change efforts against Assad). But as we described after a recent New York Times report unveiled that US anti-tank missiles have been found in "unknown" Libyan rebel hands fighting within warlord Khalifa Haftar's ranks, the once stable formerly Gadaffi-ruled Arab North African country which was in 2011 "liberated" at the hands of US-NATO forces has once again become ground zero in a grinding proxy war which has allowed jihadists to run rampant amid the chaos.Whereas a jihadi "rat line" previously ran from Libya into Syria via Turkey, we now have an exact reversal of the prior Syria situation given Turkey is becoming more heavily involved militarily in support of Tripoli's GNA government, currently under siege by UAE and US-backed Haftar's LNA. A Libyan official representing the rival Libyan government loyal to Haftar has alleged in a Russian state media interview that Turkey is actively transferring terrorists to fight in Libya. According to Beirut-based Al-Masdar News:A Libyan official told the Arabic language version of Russia’s Sputnik News Agency on Saturday that Turkey is transferring foreign terrorists to Libya to fight the Benghazi-based Libyan National Army (LNA).Speaking to Sputnik from Tobruk, Libyan parliamentarian ‘Ali Al-Sa’eedi Al-Qaidi said that Turkey has been sending terrorists to Libya for quite some time now, highlighting the fact that these militants only attack the [Tripoli-based] Libyan National Army.“The transfer of terrorists is not new. This is a long story. Many terrorists come from Turkey through Tripoli and Misrata to fight the Libyan National Army in Tripoli and obstruct its advance into the center of the Libyan capital of Tripoli,” Al-Qaidi said further.
EU Mulls Sanctions On Turkey After 2nd Drilling Ship Deployed In Cypriot Waters -- Turkey and Europe are headed for a showdown in the eastern Mediterranean over Turkish plans for oil and gas exploration and drilling in Cypriot-recognized waters, with the European Union reportedly now mulling cutting financial assistance to Turkey over the illegal drilling. EU envoys are reportedly meeting Wednesday to discuss various punitive measures against Turkey, including suspending aviation talks and even sanctions. The latest crisis was triggered after Turkish drilling vessel Yavuz sailed to an area off Cyprus’ east coast at the start of this week — the second to follow a first drilling vessel, Fatih, which had already been exploring in Cypriot waters. Notably, the vessels have been accompanied by the Turkish military, including drones, F-16 fighters, and warships. Turkish authorities have been brazen in publicizing their territorial claims and actions backing them, even as EU leaders have slammed the now months-long exploration and drilling expansion in solidarity with Cypriot condemnations (since last May). Turkish Vice President Fuat Oktay had warned over the weekend while speaking from the Turkish-occupied north of Cyprus: “Those who move against the legitimate rights of Turkey or the Turkish Cyprus and discount Turkey in the region will not be able to reach their aims,” according to Hurriyet Daily. However, EU foreign minister Federica Mogherini warned Turkey this week that the EU would respond "appropriately and in full solidarity with Cyprus" after Ankara announced the deployment of the Yavuz drilling vessel. Previously, the Fatih had been deployed a mere 42 miles off the west coast of Cyprus.
Russia-Syria assault on Idlib leaves over 500 civilians dead -- At least 544 civilians have been killed and more than 2,000 people wounded since a Russian-led assault on the last rebel-held bastion in northwestern Syria began two-and-a-half months ago, according to rights groups and rescuers. Russian fighter jets joined the Syrian army on April 26 in the offensive against rebel-held Idlib and adjoining northern Hama provinces, in the biggest escalation in the war between Syrian President Bashar al-Assad's forces and rebel fighters since last summer. The Syrian Network for Human Rights (SNHR), which monitors casualties and briefs various United Nations agencies, said on Saturday that 130 children were among the 544 civilians killed in the hundreds of attacks carried out by Russian jets and the Syrian army. Another 2,117 people were wounded. "The Russian military and its Syrian ally are deliberately targeting civilians with a record number of medical facilities bombed," Fadel Abdul Ghany, chairman of SNHR, told Reuters news agency. Last month, US-based Human Rights Watch said the Russian-Syrian joint military operation had used cluster munitions and incendiary weapons in the attacks, along with large air-dropped explosive weapons, based on reports by first responders and witnesses. The Syrian army and its ally Russia denied the allegations. Moscow says its forces and the Syrian army are fending off attacks by al-Qaeda fighters whom they say hit populated, government-held areas. It also accuses rebels of breaching a ceasefire deal agreed last year between Turkey and Russia.
Denied Iran's Oil, Syria Has Few Options But Russia - - The noose strangling the flow of oil to Syria tightened a notch last week, when British Royal Marines boarded a tanker carrying Iranian crude into the Mediterranean Sea through the Strait of Gibraltar. With Syria’s Iranian supplies halted, the flow will have to come from somewhere else, and the alternative is troubling. The Very Large Crude Carrier Grace 1 loaded a cargo of Iranian oil from the Kharg Island terminal in mid-April and set off on a long voyage around the southern tip of Africa to the eastern Mediterranean. The ship was apprehended because it was believed to be heading to a refinery that is ultimately owned by Syria’s ministry of petroleum, an entity subject to European Union sanctions. The journey from Iran to Syria around Africa is about 14,500 miles (23,300 kilometers), compared with about 4,100 miles via the Red Sea and Suez Canal. Why take such a circuitous route? Because Iranian crude is not accepted by the owners of the Sumed pipeline, which crosses Egypt to link the Red Sea to the Mediterranean. It is also banned from the Eilat-Ashkelon pipeline across Israel, originally built with the express purpose of carrying the Persian Gulf nation’s output to the Mediterranean. More recently, ships carrying Iran’s crude to Syria also seem to be prevented from using the Suez Canal. That looks to be a new development, since the oil trade between the two countries between 2016 and 2018 via the waterway averaged 50,000 barrels a day. All of those ships involved in that transport that have not been scrapped or sold appear on a list of vessels undertaking sanctionable activity published in March by the U.S. Department of the Treasury’s Office of Foreign Assets Control. This doesn’t mean Iran’s crude is completely forbidden in the waterway, since ships heading to Turkey are still able to pass. But it does mean that Syrian-bound ships carrying its cargoes have to rely on the much longer route around Africa and that a larger ship would make the journey more economic – the Grace 1 can carry twice as much oil as the Sea Shark. But that route passes through European Union waters as ships enter the Mediterranean and it was here that the Grace 1 was impounded. The government of Gibraltar has denied the claim by the Spanish Foreign Affairs Ministry that the action was carried out at the request of the U.S. The Syrian government has two big oil-producing friends, Iran and Russia. With the routes from the first apparently closed, it may have to turn to the second. This presents a new host of potential risks. Impounding an Iranian ship in the Strait of Gibraltar is one thing. Stopping a Russian ship in the Aegean Sea is quite another.
US greenlights missiles for al-Qaeda-linked, Turkish-backed Salafi-jihadists occupying Syria’s Idlib - While the US corporate media continues propagating theconspiracy theory that Donald Trump is a secret Kremlin asset, the Trump administration has approved heavy weapons for al-Qaeda-allied, Turkey-backed militants to fight against a Russian-backed offensive in Syria.The Syrian army has relaunched a campaign to retake the northwestern province of Idlib, which has been under the control of Syria’s al-Qaeda affiliate for more than four years. Washington has responded by greenlighting a cache of US-made anti-tank missiles, rocket launchers, and armored vehicles sent from NATO ally Ankara to sectarian Islamist militants in Idlib.Syria’s ally Russia had negotiated a peace deal with Turkey in September 2018. Ankara is militarily occupying part of northern Idlib, and the NATO member has constructed a dozen military bases in the Syrian province. But after seven months, Turkey and its rebel proxies have still failed to uphold their side of this peace agreement.Under the deal, the Syrian government was supposed to regain access by the end of 2018 to major highways running through Idlib that were partially controlled by Islamist rebels. But Damascus still does not have authority over these critically important roads. The peace agreement additionally stipulated that extremist militants in a demilitarized zone on the edge of Idlib were not allowed to launch attacks on Syrian government-held territory. Yet these Salafi-jihadist rebels have continued indiscriminately attacking civilian territories that are controlled by Damascus. Frustrated with Turkey’s failure to fulfill the peace deal, the Syrian army and Russian military decided to re-initiate their joint campaign to retake Idlib. In April, Moscow began a series of airstrikes; and in early May, Damascus kicked off a ground offensive. The Trump administration immediately condemned this Syrian-Russian campaign to retake Idlib from al-Qaeda militants. US officials also claimed, without providing any evidence, that the Syrian army was using “chemical weapons” in the offensive. (This unsubstantiated accusation came at the same time when a leaked OPCW report suggested that a previous gas attack in Douma, Syria had actually been staged.)
90% Of Palestinians Distrust Jared Kushner's Peace Plan - After White House Senior Advisor Jared Kushner unveiled his highly anticipated plan for peace in the Middle East during a two-day economic workshop in Bahrain, it was greeted with derision and exasperation by Arab leaders. The Palestinian leadership boycotted the event while a long list of commentators from Arab countries described the plan as "a colossal waste of time" and "dead on arrival". In fact, as Statista's Niall McCarthy notes, new polling from the Palestinian Center for Policy and Survey Research has found that nine in ten Palestinians do not trust the goals of the plan. Instead of focusing on the deadlocked political situation, Kushner instead focused on economics, intending to invest $50 billion to fund 179 regional infrastructure projects over the coming decade. $27.6 billion would go to the West Bank and Gaza with the remainder going to Jordan, Egypt and Lebanon. The primary goal of the plan is to allow the Palestinian territories to better access international markets while simultaneously improving key infrastructure such as electricity, water and telecommunications. That would see Palestinian GDP double over the next ten years, generate an estimated one million jobs and halve the poverty rate. The U.S. and Israel would not be responsible for the funding - the Bahrain workshop aimed to raise capital from across the Arab world. As the polling shows, however, an economic plan totally lacking a political dimension is certainly not being viewed as realistic by Palestinians.
Spain Says Iranian Oil Tanker Was Seized by Britain at US Request - In a move that threatens to hugely escalate tensions between Iran and the US, British Royal Marines raided and seized an Iranian oil tanker at Gibraltar on Thursday. The tanker was accused by British officials of heading to Syria in violation of EU sanctions.Iran’s Foreign Ministry confirmed summoning the British Ambassador to express “very strong objection to the illegal and unacceptable seizure” of the ship. Analysts expressed surprise at the unusually aggressive move against a commercial oil tanker.British Premier Theresa May presented the raid as “firm action to enforce EU sanctions,” though Spain indicated that it was actually done because the Trump Administration asked Britain to do so. Spain said they’re looking into it, since the tanker was captured in Spanish territorial waters. While the US hasn’t taken credit for the move yet, John Bolton was cheering the move, saying it would keep Iran from “profiting off the illicit trade,” which to be clear, is Iran shipping Iranian oil to Syria to sell it, when the US insists Iran isn’t allowed to sell any oil, and the EU says Syria isn’t allowed to buy any.
What’s Next for the Oil Tanker Seized by British Forces - When British Royal Marines helped seize an oil tanker off the southern tip of Spain on Thursday, they opened up a legal wrangle that could drag on for months.The Grace 1, a supertanker able to haul 2 million barrels of crude, was arrested in the early hours of July 4 because Gibraltarian authorities said they had grounds to believe it was going to breach European Union sanctions by delivering crude oil to Syria. The cargo came from Iran, which protested against the seizure.With the vessel now sitting inside the Bay of Gibraltar, close to the shore of the British overseas territory, one question being asked is what will it take for the tanker to be released. There are -- according to Anna Bradshaw, a partner at the law firm Peters & Peters, who specializes in sanctions -- two obvious ways for that to happen. The government of Gibraltar could say that it made a mistake and that it doesn’t think the vessel was in fact breaching EU sanctions. Though that option could see the ship leave the port and sail away, there’s no guarantee that the U.S. wouldn’t try to ensure that the vessel remained seized again as a result of its own sanctions, according to Bradshaw. In reality, since the U.S. has no such jurisdiction, it might struggle to do that, she said.Alternatively, Iran could also successfully defend itself in the Gibraltarian legal system, allowing the vessel to depart. A more likely sequence of events would see the vessel or its cargo detained for a more prolonged period, Bradshaw says. A sequence of events has already been triggered, that could ultimately lead to the ship being released:
- 1) Once the vessel is detained, a court will need to extend the period it can be held for, which starts at 72 hours, and has now been extendedto 14 days
- 2) After that time’s up, the period can be extended again to as long as 90 days
- 3) By then, the government can look to either legally seize the ship and its cargo -- known as forfeiture -- or possibly sell them; that would see the vessel back on the world’s oceans
All of this could still occur while the ship’s owners and managers answer charges of sanctions breaches. Again, that process is complicated and could be long, particularly given that it’s rare for EU sanctions breaches to have to be tried, and it’s equally rare for a supertanker of oil to be seized mid-transit. A long and wrangling court procedure could also mean that the sale or release of the vessel gets held up. It’s also important to remember that Iran protested against the ship’s seizure, so there is likely to be a much wider political picture going on.
British capture of Iranian tanker won't go 'unanswered' - officer - (Reuters) - Britain’s seizure of an Iranian oil tanker off Gibraltar last week will not be “unanswered”, Iran’s armed forces chief of staff, Major General Mohammad Bagheri, said on Tuesday, according to the semi-official Tasnim news agency. “Capture of the Iranian oil tanker based on fabricated excuses ... will not be unanswered and when necessary Tehran will give appropriate answer,” Bagheri said. British Royal Marines boarded the ship, Grace 1, off the coast of Gibraltar on Thursday and seized it over accusations it was breaking sanctions by taking oil to Syria. Iran has demanded the immediate release of the oil tanker, while an Iranian Revolutionary Guards commander threatened on Friday to seize a British ship in retaliation.
Iran-Backed Attack On Merchant Ship In Red Sea Thwarted- Saudi Coalition - As the tanker and pipeline wars in the gulf continue to heat up, Saudi state sources are claiming to have thwarted a new "terror attack" on a commercial ship targeted by Yemen's Houthis. Spokesman for the Saudi coalition fighting in Yemen, Col. Turki al-Maliki, announced Monday that "Houthis attempted to attack a commercial ship south of the Red Sea using a booby-trapped boat with explosives," according to a statement from the Saudi Press Agency. Al-Maliki pointed the finger at the "Iran-backed" Shia militia for posing a threat to navigation and international trade, but vowed that the coalition — which has since 2015 included US forces — would "neutralize" all hostile threats in the region. The statements via the Saudi Press Agency suggest that an active, ongoing operation is underway in response to the alleged Houthi targeting of a merchant vessel in the south Red Sea.The Bab El Mandeb strait, located between Yemen on the Arabian Peninsula to the Red Sea's south, is considered one of the world’s most important trade routes for oil tankers and over the course of the Saudi-Yemen war has been site of multiple military operations launched between the Houthis and Saudis. Impossible to predict Iran’s response vs UK. Expect mischief/hassling of UK tankers in Persian Gulf. Is bigger risk than attack on tanker in Persian Gulf, the wildcard of Iran proxies, in particular the Houthis who have attacked Saudi tankers in the Red Sea/Bab el Mandeb? #OOTT pic.twitter.com/G3QxJNn0Yx - Dan Tsubouchi (@Energy_Tidbits) July 7, 2019 The claimed attack comes a day after the Houthis confirmed they conducted drone attacks on military aircraft hangars and other sites at Jizan airport in southern Saudi Arabia, according to Reuters. Airports in the southern part of the kingdom have been under threat of late from increasingly sophisticated Houthi ballistic missile attacks. Washington and Riyadh have for the past year accused Iran's IRGC of supplying the advanced medium range rockets to the Shia rebel force fighting the US-Saudi coalition in Yemen.
Insurance rates have 'increased 10-fold' after attacks in the Strait of Hormuz, shipping CEO says -- Insurance rates for tankers transiting through the world’s most important oil choke point have skyrocketed in recent weeks, according to the CEO of a U.S.-listed shipping company. Six oil tankers and a U.S. spy drone have been attacked since May either in, or near, the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates. “As a shipping company and part of the global shipping industry, we are taking the threat to our crew and ships very seriously,” Anthony Gurnee, CEO of Ardmore Shipping, told CNBC’s “Squawk Box Europe” on Tuesday. Ardmore Shipping is a U.S.-listed company based in Ireland, with a business of owning and operating a fleet of tankers that move refined oil products. “At the moment, it is business as usual (but) insurance to transit the Strait of Hormuz has actually increased 10-fold in the last two months as a consequence of the attacks,” Gurnee said. The attacks brought the U.S. and Iran close to conflict last month. President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone over the Gulf, which followed attacks on two oil product tankers in the nearby Gulf of Oman by unidentified assailants. Washington has blamed Iran for the attacks on four oil tankers in the same area on May 12. Tehran has denied the allegations. “Whoever is doing this has demonstrated that they have the ability to be very destructive,” Gurnee said. Every ship needs various forms of insurance, including annual war-risk cover as well as an additional ‘breach’ premium when entering high-risk areas. These separate premiums are calculated according to the value of the ship, or hull, for a seven-day period, Reuters reported. Last month, a Nikkei Asian Review report citing Japanese industry sources said additional insurance for tankers sailing through the Strait of Hormuz now cost 10 times what it did before two ships were attacked earlier in June. CNBC has not been able to independently verify these sources.
Here's why the Strait of Hormuz is the world's most important oil chokepoint - The Strait of Hormuz is a critical gateway to the world’s oil industry, with more than a fifth of global oil supply flowing through a narrow sea channel used by Gulf countries like Iran, Saudi Arabia and the United Arab Emirates. The strategically important waterway links crude producers in the Middle East with key markets across the world. Daily oil flow in the Strait averaged 21 million barrels per day in 2018, according to the U.S. Energy Information Administration (EIA). That’s the equivalent of about 21% of global petroleum liquids consumption — making it the world’s most important oil chokepoint. The EIA defines a chokepoint as a narrow channel along widely used global sea routes that are critical to energy security. Therefore, the inability of oil to transit a major chokepoint, even temporarily, can lead to substantial supply delays and higher shipping costs — resulting in higher world energy prices. Most chokepoints can be circumvented by using other shipping channels but some, such as the Strait of Hormuz, have no practical alternatives. Flows through the narrow channel in 2018 made up about one-third of total global seaborne traded oil. More than one-quarter of global liquefied natural gas trade (LNG) also transited the shipping channel last year. The Gulf region has been shaken by a period of heightened instability in recent months, threatening the flow of oil through the Strait. Six oil tankers and a U.S. spy drone have been attacked since May in, or near, the waterway amid intensifying tensions between the U.S. and Iran.
British Oil Tanker Seeks Shelter Over Fears It Could Be Seized By Iran -- After a former IRGC commander exhorted his government to take a British oil tanker hostage following the seizure by Royal Marines last week of a vessel hauling Iranian crude, an oil tanker run by British Petroleum is sheltering in the Persian Gulf over fears it could soon be seized by Iran in a tit-for-tat response, Bloomberg reports. The tanker, which is named 'British Heritage', is able to haul about 1 million barrels of crude. It had been sailing toward Iraq’s Basrah oil terminal when it made an abrupt U-turn over the weekend.The ship is now hanging out near Saudi Arabia's coast because BP is reportedly worried that the vessel could be targeted if Iran seeks to retaliate for the seizure of the tanker Grace 1 on Thursday. The Grace 1 was seized after being caught transporting Iranian crude, in breach of sanctions. British Heritage, registered in the Isle of Man and flying under the British flag, had been chartered by Royal Dutch Shell Plc to transport crude from Basrah to northwest Europe. However, it never collected its cargo and the booking was canceled.Of course, the ship won’t be able to pass through the Strait of Hormuz, the chokepoint through which about 1/3 of global oil shipped by sea moves, without sailing close to Iran’s coast. It's unclear how long the ship will be sheltering for.
Oil Tankers Dodge Main Mideast Refueling Hub-- Oil tanker owners are avoiding sending their ships to the Middle East’s main refueling hub after a spate of attacks on vessels in the past two months ratcheted up tensions and highlighted the growing risks of operating in the region. Strikes on tankers just outside the Persian Gulf in mid-June were the second in a month near the Strait of Hormuz, the chokepoint through which about a third of global seaborne oil moves. Now demand for ship fuel at Fujairah, the United Arab Emirates coastal shipping hub close to the Strait, has waned as some tankers stay away, traders involved in the regional market said. “Only expect issues to get worse before they get better,” said Matt Stanley, a senior broker at Star Fuels in Dubai. Fujairah is seeing “a significant drop in demand owing to war-risk premiums” that are levied by ship insurers, he said. The root cause of the slump -- whether ships are avoiding the Middle East altogether or just skipping Fujairah -- isn’t completely clear. But since the attacks in early May, insurance costs have soared and some owners turned wary of sending their carriers to the region. One of the largest, Frontline Ltd., even temporarily paused trading from the Persian Gulf. Fujairah provides tankers with fuel, supplies and repairs as they ply the route from the Persian Gulf through the Strait of Hormuz to refineries the world over. Local officials say that there’s been no slump in refueling from facilities at the port itself, but that only captures a fraction of the trade. Carriers are also supplied at anchorage areas -- where four tankers were attacked in early May -- and it’s there that brokers and traders are reporting the drop-off.
Egypt Seizes Tanker Carrying Iranian Crude - Tehran's threats of retaliation against the UK for seizing a tanker carrying Iranian crude oil for export have prompted a British vessel to shelter in the Gulf, but the rest of the world doesn't seem to be taking them too seriously. Citing local press reports, Middle East Monitor said Tuesday that a Ukrainian tanker carrying Iranian oil as it passed through the Suez Canal ten days ago was seized by the Egyptian government, just as Egypt's State Security Criminal Court was sentencing six people to lengthy jail terms allegedly for spying for Iran.Those defendants have all been sentenced to between 15 and 25 years in jail, a $30,000 fine and the confiscation of their computers and phones.Egyptian Al-Azhar Professor Alaa Moawad, who was present at the trial on Sunday, was accused of harming Egypt’s national interests and receiving money to spread Iranian Shiism in Sunni Egypt by launching a website, issuing publications and attracting recruits.Egypt is a staunch ally of the US, and as a Sunni-majority country, would naturally align with the UAE and Saudi Arabia in their efforts to contain Iran. Egypt also supports the Saudi-backed coalition in Yemen that is fighting to retain control in that country's brutal civil war. Cairo has condemned the Houthis for the recent spate of attacks on Saudi infrastructure that have inflamed tensions in the region.Washington and Riyadh have blamed Iran for a series of attacks on oil tankers in and around the Strait of Hormuz, though there is some disagreement on this subject.Egypt's decision to seize the tanker adds another wrinkle to the intensifying tensions in the region, at a time when Iran is threatening to enrich uranium to any level it deems necessary, in contravention of the terms of the JCPOA.
Armed Iranian boats attempted to seize British oil tanker in Persian Gulf: reports - Boats believed to belong to the Iranian Islamic Revolutionary Guard Corps failed to seize a British oil tanker in the Persian Gulf on Wednesday, according to reports. U.S. officials with knowledge of the incident told CNN the British Heritage tanker was approached by five armed Iranian boats while sailing out of the Persian Gulf and crossing the Strait of Hormuz. Iranians told the tanker to change course and stop in nearby Iranian territorial waters, CNN reports. An overhead U.S. aircraft recorded a video of the incident, according to CNN. The Hill reached out to the U.S. Department of Defense for comment. Britain's Ministry of Defense had no immediate comment to Reuters, which reported a U.S. defense official also confirmed the incident. The attempt follows a warning issued from Iranian President Hassan Rouhani earlier in the day that the U.K. will see "consequences" after U.K. Royal Marines and Gibraltar officials reportedly seized an Iranian oil tanker allegedly bound for Syria. "You [Britain] are the initiator of insecurity and you will realize the consequences later,” Rouhani said, according to a Reuters report. CNN reports U.S. Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford said Tuesday U.S. and its allies were working to put together ra coalition to create a system enforcing freedom of navigation in the region.
Iran Keeps Calm While U.S. And Britain Continue Their Provocations - Early today 'two U.S. officials' spread a scare story about Iran which lead to thisCNN headline: Iranian boats attempted to seize a British tanker in the Strait of Hormuz Armed Iranian boats unsuccessfully tried to seize a British oil tanker in the Persian Gulf Wednesday, according to two US officials with direct knowledge of the incident. The Iranians ordered the tanker to change course and stop in nearby Iranian territorial waters, according to the officials. The same 'two U.S. officials' briefed ABCNews: A British warship prevented an apparent attempt by five Iranian small boats to direct a British oil tanker towards Iranian waters on Wednesday, according to two U.S. officials. Remarkably the official British report came later than the U.S. officials briefing. It showed significant differences: The UK defence ministry said that "three Iranian vessels attempted to impede the passage of a commercial vessel, British Heritage, through the Strait of Hormuz." "HMS Montrose was forced to position herself between the Iranian vessels and British Heritage and issue verbal warnings to the Iranian vessels, which then turned away," the ministry statement said. ..."There has been no confrontation in the last 24 hours with any foreign vessels, including British ones," the Revolutionary Guards said in a statement. The U.S. officials claimed 5, not 3 boats. They claimed the boats tried to seize the ship, while the Brits just say they probably were getting in the way of the ship. The U.S. officials 'direct knowledge of the incident' seems to be lacking. Iran says that nothing happened at all. There are reasons to believe that the Iranian statement is the most truthful one. The BRITISH HERITAGE is a crude oil carrier with an overall length of 274 m, a beam of 49 m and a maximum draft of 17.8 m. How three of the typical 20 feet long fiberglass speedboats of the IRGC could try to 'seize' or even 'impede' such a huge ships is not conceivable.
US State Department Now Says Drone Attack on Saudi East - West Pipeline Originated in Southern Iraq - In a change of the official U.S. assessment of the drone attack on Saudi Arabian oil infrastructure, the American government now says the drone attacks originated in southern Iraq and not Yemen, as previously reported. US officials added that the drones involved in this attack were more "sophisticated' that those used by Houthi rebels in Yemen. The 14 May drone attacks hit two pipeline segments along the major Saudi East-West oil pipeline. The Saudis said supply was not disrupted and that no one was injured. After further review, US officials familiar with the intelligence declared the attacks originated in southern Iraq, a charge which was promptly denied by Iraqi Prime Minister Abdul Mahdi. He said there was no evidence linking southern Iraq with such attacks. The drone attack followed the sabotage of four tankers off of the UAE coast, including two from Saudi Arabia. Just weeks later, two more tankers were attacked in the Gulf of Oman, near the Strait of Hormuz, further escalating tensions in the region.
Iran steps further from nuke deal, adding pressure on Europe (AP) — Iran increased its uranium enrichment Sunday beyond the limit allowed by its 2015 nuclear deal with world powers, inching its program closer toward weapons-grade levels while calling for a diplomatic solution to a crisis heightening tensions with the U.S. Iran’s move, coupled with earlier abandoning the deal’s limit on its low-enriched uranium stockpile, intensifies pressure on Europe to find any effective way around U.S. sanctions that block Tehran’s oil sales abroad. But the future of the accord that President Donald Trump unilaterally pulled the U.S. from a year ago remains in question. While Iran’s recent measures could be easily reversed, Europe has struggled to respond, even after getting a 60-day warning that the increase was coming. Meanwhile, experts fear a miscalculation in the crisis could explode into open conflict, as Trump already has nearly bombed Iran over Tehran shooting down a U.S. military surveillance drone. Trump warned Tehran on Sunday that “Iran better be careful.” He didn’t elaborate on what actions the U.S. might consider, but Trump told reporters: “Iran’s doing a lot of bad things.” International reaction to Iran’s decision came swiftly, with Britain warning Iran to “immediately stop and reverse all activities” violating the deal, Germany saying it is “extremely concerned,” and Israeli Prime Minister Benjamin Netanyahu, a longtime critic of the accord, urging world powers to impose so-called “snapback sanctions” on Tehran. The European Union said parties to the deal are discussing a possible emergency meeting after Iran’s announcement, with EU spokeswoman Maja Kocijancic saying the bloc is “extremely concerned” about the move. U.S. Secretary of State Mike Pompeo tweeted: “Iran’s latest expansion of its nuclear program will lead to further isolation and sanctions. Nations should restore the longstanding standard of no enrichment for Iran’s nuclear program. Iran’s regime, armed with nuclear weapons, would pose an even greater danger to the world.”
Factbox: Iran nuclear row - could U.N. sanctions return? (Reuters) - Iran said on Sunday it would further scale back its commitment to the 2015 nuclear deal with world powers, raising its uranium enrichment level beyond agreed levels to produce fuel for power plants. Tehran vowed to keep reducing its commitments every 60 days unless parties to the deal moved to protect it from U.S. sanctions. Such moves by Iran could ultimately lead to the return of all international sanctions on the country if a party or parties to the deal trigger its dispute resolution process. That process will not be triggered for now, said a source at French President Emmanuel Macron’s Elysee office on Sunday. The French government is giving itself until July 15 to try to get all parties talking again. Most U.N. sanctions were removed in January 2016 when the deal was implemented. It is formally called the Joint Comprehensive Plan of Action (JCPOA) and was agreed by the United States, Iran, Britain, China, France, Germany and Russia. U.S. President Donald Trump withdrew the United States in May 2018 saying the accord did not go far enough and did not address Iran’s missile program or activities in the Middle East. Iran argues that, under the nuclear deal’s dispute resolution process, the U.S. withdrawal and renewed sanctions campaign constitute “significant non-performance” and Tehran can “treat the unresolved issue as grounds to cease performing its commitments in whole or in part.” However, two Western officials with knowledge of the accord, speaking on condition of anonymity, said Iran has never formally triggered the dispute resolution process. Iran also argues that it can reduce in its commitment because, under a separate provision, the agreement said: “Iran has stated that it will treat such a re-introduction or re-imposition of the sanctions ... or such an imposition of new nuclear-related sanctions, as grounds to cease performing its commitments under this JCPOA in whole or in part.” Here is how the dispute resolution process, which could take up to 65 days to play out unless extended by consensus, works:
Netanyahu Compares Iran’s Uranium Enrichment Breach To Nazi March Into Rhineland - Usually the 'reductio ad hitlerum' argument rolls out shortly before the West or its allies take some kind of military action against a Middle East regime. Following Sunday's announcement out of Iran that it's advancing its uranium enrichment beyond the 3.67% ceiling set by the 2015 nuclear deal — with officials telling Reuters over the weekend that enrichment will go to 5% — Israeli Prime Minister Benjamin Netanyahu did just that. Speaking at a weekly cabinet meeting, Netanyahu told his ministers that it's a "mistake" to dismiss Iran's declaration as a mere "small step" given that the Nazis also took "small steps" in the 1930s before blitzing across European territory. He said Iran's enrichment “is for only one thing – to prepare nuclear weapons,” according to The Jerusalem Post.
Iran nuclear deal: Macron and Rouhani agree to look at conditions for talks - France and Iran have agreed to look at conditions for resuming talks to try to save Tehran's nuclear deal with world powers, President Emmanuel Macron says. During a phone call with President Hassan Rouhani, Mr Macron expressed his "strong concern" about the consequences of abandoning the 2015 accord. Mr Rouhani called on European countries to act urgently to save the deal aimed at curbing Iran's nuclear programme. The agreement has been in jeopardy since the US pulled out last year. President Donald Trump later imposed punishing sanctions on Iran. In May, Iran responded by stepping up production of enriched uranium, used to make reactor fuel but also potentially nuclear bombs. Iran has already stockpiled more enriched uranium than the country was supposed to. The country has been expected to announce on Sunday that it will breach another limit by taking the enrichment process to a higher level. It is going to be hard - if not impossible - to get the Americans back on board, BBC Diplomatic Correspondent Jonathan Marcus writes. The Europeans are struggling to do much to relieve the pressure on Iran from US sanctions and the fate of the nuclear deal itself is now more precarious than ever, he adds. The French presidency published a statement (in French), saying that President Macron had spoken for more than an hour with his Iranian counterpart. Mr Macron said he was very concerned about the "risk of a further weakening" of the treaty and "the consequences that would necessarily follow". The statement said the two leaders had agreed "to explore by 15 July the conditions for the resumption of dialogue between all parties" - beyond a Sunday deadline announced by Iran. Mr Rouhani had previously given the five countries still party to the deal - the UK, France, Germany, China and Russia - until Sunday to meet their commitment to shield Iran from the sanctions' effects. The French statement also said Mr Macron would continue consultations with the Iranian side and international partners to reduce tensions.
US steps up threats as Iran exceeds uranium enrichment cap - The International Atomic Energy Agency (IAEA) Monday confirmed that Iran has breached the limit imposed by the 2015 nuclear agreement on the level at which it is allowed to enrich uranium. Iran had announced its breach of the limit on Sunday, a deliberate step aimed at pressuring the remaining signatories to the nuclear accord—particularly Germany, France and the UK—to take substantive steps to counter crippling US economic sanctions that are tantamount to a state of war. Washington has taken a series of actions that have placed the threat of a war in the Persian Gulf on a hair trigger, raising the specter of a catastrophic military confrontation in a region that is the source of a third of the world’s natural gas and a fifth of its oil. In May 2018, the Trump administration unilaterally abrogated the agreement, known as the Joint Comprehensive Plan of Action (JCPOA), that was reached between Tehran and six major world powers—the US, China, Russia, Britain, France and Germany. It not only reimposed nuclear sanctions that had been suspended with the agreement but implemented a series of even more punishing measures. The increase in the enrichment level—which had been capped at 3.67 percent and has risen to 4.5 percent, according to Iranian authorities—follows last month’s announcement by Iran that it was deliberately exceeding the 300 kg cap imposed by the JCPOA on its enriched uranium stockpiles. The country is supposed to export any excess amounts, but even that option has been undermined by the US “maximum pressure” sanctions regime. Tehran indicated that it will impose another 60-day deadline for the European powers to take concrete steps to ensure that Iran receives the sanctions relief that it was promised in return for its submission to drastic limits on its nuclear program.
Iran declares war on the USA’s covert influence in Iraq.- When US officials visited Baghdad and met with the Iraqi Prime Minister Adel Abdel Mahdi, they had two requests: first, to close all commerce and financial exchanges with Iran to strangle the Iranian economy and bring it to its knees. The second was to neutralise the Iraqi groups (known as Hashd al-Shaabi) which sympathise with Iran and carry a similar ideology. The Iraqi Premier is aware he is being pushed into the heart of two minefields, Iranian and American, and therefore he cannot just walk straight into these fields. He has decided to reject the first US demand because Iraq has religious, commercial and energy bonds with Iran. He is refusing to transform Iraq into a US-Iran battlefield where no winner can be expected to stay on his feet, including Iraq. He wants to force the US administration to back down and agree to provide Iraq with waivers to buy Iranian gas and keep commercial exchange flowing. What were Abdel Mahdi’s reasons for responding to US pressure? He did not want to have the Americans on his back or turn the country upside down. Therefore, though he refused to satisfy US officials in their first request, he did take account of the latter, seeking to avoid a potential coup d’état and a possible US manoeuvre to allow the return of the terrorist group “Islamic State” (ISIS). The Prime Minister issued Diwani Order (decree) no. 237 “to organise Hashd al-Shaabi, where all factions close their headquarters and have the option to either join the armed forces or engage in political activity (unarmed). Any faction acting secretly or publicly bypassing these instructions is forbidden. Compliance with the ultimatum is required by the 31 of July”. The US administration was satisfied with this move, but…
China Backs Iran: Trump ‘Started the Fire,’ ‘unilateral bullying’ ‘a tumor’ – China is openly blaming the Trump administration for the breakdown of the 2015 Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), according to the official Xinhua News AgencyForeign Ministry spokesperson Geng Shuang said at a daily press briefing, “The ‘maximum pressure’ against Iran imposed by the United States is the root cause of the crisis concerning the Iran nuclear issue.” He added that “unilateral bullying has become a tumor.”He added “that the U.S. has not only withdrawn from the deal unilaterally but also created an increasing number of hurdles against Iran and other parties through unilateral sanctions and long-arm jurisdiction.”The spokesman also rebuked Iran for tinkering around the edges with the terms of the nuclear deal.In its roundup for Monday, BBC Monitoring points out that Xinhua called Iran’s decision to enrich uranium to 5% instead of the 3.5% cap set in the JCPOA a “symbolic countermeasure.”This comment is correct. You can’t do anything with uranium enriched to 5%. You only need to enrich to 3.5% for reactor fuel. You’d have to enrich to 95% to make a bomb (something Iran is not known to be able to do and which the CIA has repeatedly assessed it is not trying to do). So enriching to 5% is just a symbolic way of tweaking Trump.Xinhua, BBC Monitoring reports, alleges that Iran has been “forced to fight back”g given severe US sanctions.In an editorial in English, Xinhua rebuked Trump for remarking that Iran is “playing with fire,” observing that “it is clear to all that Washington started the fire by unilaterally withdrawing from the deal and tightening anti-Iran sanctions.”The editorial concluded, “To prevent the situation from spiralling out of control, fully and effectively implementing the Iran nuclear deal is the only realistic and effective way to ease the tensions and eventually solve the Iran nuclear issue.” China continues to buy Iranian oil, apparently often on the sly and in ways that do not show up in official Iranian statistics.
Cholera Rips Through War-Torn Yemen- Nears 500,000 Cases In 2019 -- As the UAE announced this week it would withdraw its forces from Yemen as a longtime lead country in the Saudi coalition which has fought Houthi rebels since 2015, the United Nations issued a damning report on what it previously dubbed the "world's worst humanitarian crisis" and what many analysts have described as the "forgotten war," due to the little coverage it receives in the mainstream media. War-ravaged Yemen has seen more than than 460,000 suspected cholera cases so far this year, which is significantly higher that the total number for all of 2018, at 380,000 — the UN stated early this week.This as the over four-year long war is has reached casualty numbers on par with the opening half of the Syrian war, expected to reach an estimated 233,000 deaths by the end of 2019, according to a previous UN report issued in May. In addition to famine, malnutrition, cholera, and other diseases, the new UN statements noted lack of access to clean drinking water for vast segments of the population, which has facilitated the rapid spread of diseases uncommon in much of the rest of the world, specifically cholera. The AP cited UN deputy spokesman Farhan Haq as noting that the "increased number of cases has led to 705 apparent cholera deaths since January, dramatically higher than the 75 deaths in the same period last year."The UN also estimated that some 10 million Yemenis currently rely on food aid to survive - a figure that's 50% higher compared to pre-war assessments. The UN also confirmed "pockets of famine-like conditions in dozens of places across Yemen."
How UAE's Yemen Exit Is Preparation To Confront Iran Closer To Home - A United Arab Emirates decision to withdraw the bulk of its forces from Yemen shines a spotlight on hard realities underlying Middle Eastern geopolitics. The pullback suggests that the UAE is preparing for the possibility of a US military confrontation with Iran in which the UAE and Saudi Arabia could emerge as prime battlegrounds. It also reflects long-standing subtle differences in the approaches of Saudi Arabia and the UAE towards Yemen. It further highlights the UAE’s long-standing concern for its international standing amid mounting criticism of the civilian toll of the war as well as a recognition that the Trump administration’s unquestioning support may not be enough to shield its allies from significant reputational damage. The withdrawal constitutes a fine-tuning rather than a reversal of the UAE’s determination to contain Iran and thwart political Islam witness the Emirates’ involvement in the Libyan civil war and support for renegade field marshal Khalifa Belqasim Haftar as well as its support for the embattled Sudanese military and autocrats like Egyptian general-turned-president Abdel Fattah al-Sisi. While the UAE may have withdrawn the bulk of its troops from key regions of Yemen, it leaves behind Emirati-trained local forces that will continue to do its bidding. The withdrawal, moreover, is not 100 percent with the UAE maintaining its Al-Mukalla base for counterterrorism operations. The UAE’s commitment to assertive policies designed to ensure that the small state can continue to punch above its weight are also evident in its maintenance of a string of military and commercial port facilities in Yemen, on the African shore of the Red Sea, and in the Horn of Africa as well its hard-line towards Qatar and rivalry with Turkey. As part of its regional and international projection, the UAE is keen to maintain its status as a model for Arab youth and preferred country of residence. The UAE’s image contrasts starkly with that of Saudi Arabia, the custodian of Mecca and Medina, Islam’s two holiest cities. Crown Prince Mohammed bin Salman’s policies, including the clampdown on domestic critics and the Yemen war, have prompted embarrassing calls by prominent Islamic scholars for a boycott of the pilgrimage to Mecca, one of the five pillars of Islam.
Saudi Arabia deports 858,355 illegal residents since November 2017 -- Saudi Arabia has deported at least 858,355 illegal foreigners since November 2017 in a nationwide crackdown that saw more than 3.44 million people rounded up in various parts of the Kingdom for violating residency and labor regulations. The Interior Ministry said security forces apprehended a total of 3,443,455 expatriates in what is dubbed as a Nation Free of Illegals campaign until Thursday, July 4, the Saudi Press Agency reported late Friday quoting campaign officials. The campaign was launched in mid-November 2017 with the participation of 19 ministries and government departments including the Ministry of Labor and Social Development and the Directorate General of Passports. The officials said 2,684,975 people were arrested for violating the system of residency, 531,195 for not adhering to labor regulations and 227,285 for trying to breach border security. They said 58,032 people were arrested while sneaking into the Kingdom through its southern borders. About 47 percent of the infiltrators were Yemenis, 50 percent Ethiopians and 3 percent from various other nationalities. According to the campaign sources, 2,511 people were caught while attempting to leave the Kingdom illegally while 3,988 people were charged with sheltering illegal residents by providing with accommodation and transportation. They included 1,372 Saudi nationals, of whom 1,331 were released after they underwent punishments while 41 others are still under investigation. The sources said 13,000 illegal expatriates, including 11,047 men and 1,953 women, were currently being held in various detention centers in the country. They said 446,179 violators were referred to their respective embassies and consulates to issue them travel documents while 569,346 were completing their flight bookings for final exit from the Kingdom.
The Taliban Have Won In Afghanistan - On June 26 two US special forces soldiers were killed in Afghanistan, bringing the total of US military personnel who have died in that useless war to 2429, according to iCasualties, an independent casualty tracker. What did they die for? According to the US State Department the military are there because “we continue to invest US resources to help Afghanistan improve its security, governance, institutions and economy,” and the Pentagon says “the principle goal… is to conclude the war in Afghanistan on terms favourable to Afghanistan and the United States.” How? Neither the current occupant of the White House nor any others aspiring to become president in 2020 have produced any workable proposals to end this disastrous conflict, and in an exchange of views on June 27 two of the Democratic contenders cast some light on the darkness of frustration and confusion. Members of Congress Tim Ryan and Tulsi Gabbard had a heated argument that involved Gabbard (who had served in Iraq) declaring that “The Taliban was there long before we came in; they’ll be there long before we leave. We cannot keep US troops deployed to Afghanistan thinking that we’re somehow going to squash this Taliban.” Even if she didn’t offer a solution, she is perfectly right — but it was the rejoinder of Congressman Ryan that was eye-opening. He said “I didn’t say squash them. When we weren’t in there, they started flying planes into our buildings.” Gabbard was astonished, as well she might be, and replied “The Taliban didn’t attack us on 9/11; al-Qaeda did. That’s why I and so many other people joined the military — to go after al-Qaeda. Not the Taliban.” Exactly. Fifteen of the 19 al-Qaeda hijackers were Saudis, two came from the United Arab Emirates and one each from Lebanon and Egypt. USA Today reported that they had “multiple links to associates of Saudi Arabian Prince Bandar, the former longtime ambassador to the United States. The documents show possible conduits of money from the Saudi royal family to Saudis living in the United States and two of the hijackers in San Diego. The documents also indicate substantial support to California mosques with a high degree of radical Islamist sentiment.” Not a Taliban in sight. In spite of the fact that the head man, the evil bin Laden, was in Afghanistan (and was later killed in Pakistan in a US special forces raid) the main 9/11 planning centre was in Hamburg.