oil prices finished lower for a second week as geopolitical fears unwound and oil traders shifted their focus to an imaginary oil glut and sluggish demand....after falling 6.4% to $59.04 a barrel last week because the exchange of missile attacks between the US and Iran failed to interrupt oil supplies, the benchmark price of US light sweet crude for February delivery fell for a fifth consecutive day on Monday as tensions in the Mideast continued to ease over the weekend and oil traders turned their focus to high US fuel supplies, with oil prices finishing down 96 cents at $58.08 a barrel...however, oil prices snapped their losing streak on Tuesday, rising 15 cents to $58.23 a barrel, buoyed by upbeat anticipation of the expected Wednesday signing of a so-called 'phase one' U.S.-China trade deal...but oil prices were down again early Wednesday after the late Tuesday API report had showed a surprise increase of US crude supplies, and continued lower to close down 42 cents at $57.81 a barrel after the EIA reported huge increases in domestic supplies of gasoline and distillates....oil prices then opened higher on Thursday on Chinese commitments to much higher purchases of U.S. energy products, but slumped back to $57.56 at midday before rallying to finish 71 cents higher at $58.52 a barrel on news of the Senate approval of the U.S.-Mexico-Canada trade agreement...oil prices then tacked on another 2 cent gain on Friday to finish at $58.54 a barrel, a loss of less than 1% for the week as the positive news on trade was outweighed by signs of oversupply and weak global demand..
meanwhile, natural gas prices finished much lower on continued moderate weather and on reports from the EIA forecasting lower natural gas prices for 2020 and slower growth in natural gas-fired electricity generation...after finishing last week 3.4% higher at $2.202 per mmBTU as traders eyed a return to winter temperatures, the price of natural gas for February delivery opened higher but then moved down on Monday and ended 2 cents lower at $2.182 mmBTU as the shift to colder temperatures failed to impress natural gas traders...prices recovered a half a cent on Tuesday but were down 6.7 cents on Wednesday on forecasts for less cold in the two week forecasts...prices rallied on a bullish storage report on Thursday, but again faded to close 4.3 cents lower at a five month low of $2.077 mmBTU, as the bullish storage report was no match for bearish weather forecasts... February natural gas lost then 7.4 cents, or 3.6%, on Friday to settle at $2.003 per mmBTU, and was thus down about 9% for the week, the lowest close for natural gas prices since May 2016 and the lowest price ever for February 2020 natural gas...
the natural gas storage report for the week ending January 10th from the EIA indicated that the quantity of natural gas held in storage in the US fell by 109 billion cubic feet to 3,039 billion cubic feet by the end of the week, which left our gas supplies 494 billion cubic feet, or 19.4% higher than the 2,545 billion cubic feet that were in storage on January 10th of last year, and 149 billion cubic feet, or 5.2% above the five-year average of 2,890 billion cubic feet of natural gas that has been in storage as of the 10th of January in recent years....the 109 billion cubic feet that were withdrawn from US natural gas storage this week was somewhat more than the average forecast for a 92 billion cubic feet withdrawal by analysts surveyed by S&P Global Platts, but still far less than the average 194 billion cubic feet of natural gas that have been pulled from natural gas storage during the first full week of January over the past 5 years....
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending January 10th showed that because of a modest drop in our oil imports and a sizable increase in our oil exports, we needed to pull oil out of our stored commercial supplies for the seventh time in the past eighteen weeks....our imports of crude oil fell by an average of 179,000 barrels per day to an average of 6,730,000 barrels per day, after rising by an average of 379,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 417,000 barrels per day to 3,481,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,071,000 barrels of per day during the week ending January 10th, 596,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells rose by 100,000 barrels per day to a record 13,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,071,000 barrels per day during this reporting week..
meanwhile, US oil refineries were reportedly processing 16,973,000 barrels of crude per day during the week ending January 10th, 76,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that an average of 364,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....hence, we can see that 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 538,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+538,000) 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", thus suggesting an error or errors of that magnitude in the oil supply & demand figures we have just transcribed...however, since the media treats these figures as gospel and since they drive oil pricing and hence decisions to drill for oil, we'll continue to report them, just as they're watched & believed as accurate by most everyone else (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 slipped to an average of 6,611,000 barrels per day last week, now 13.1% less than the 7,605,000 barrel per day average that we were importing over the same four-week period last year....the 364,000 barrel per day net withdrawal from our total crude inventories was all from our commercially available stocks of crude oil, while the quantity of oil stored in our Strategic Petroleum Reserve was unchanged....this week's crude oil production was reported to be 100,000 barrels per day higher at a record 13,000,000 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 a record 12,500,000 barrels per day, and while even though oil production from Alaska was 3,000 barrels per day lower at 480,000 barrels per day, it still added the same rounded 500,000 barrels per day to the rounded national total....last year's US crude oil production for the week ending January 11th was rounded to 11,900,000 barrels per day, so this reporting week's rounded oil production figure was 9.2% above that of a year ago, and 54.2% 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 92.2% of their capacity in using 16,973,000 barrels of crude per day during the week ending January 10th, down from 93.0% of capacity the prior week, and a bit below the recent average capacity utilization for the first full week of January...as a result, the 16,973,000 barrels per day of oil that were refined this week were 1.5% below the 17,223,000 barrels of crude that were being processed daily during the week ending January 11th, 2019, when US refineries were operating at 94.6% of capacity....
even with just a modest increase in the amount of oil being refined, gasoline output from our refineries was quite a bit higher, increasing by 394,000 barrels per day to 9,281,000 barrels per day during the week ending January 3rd, after our refineries' gasoline output had decreased by 1,286,000 barrels per day over the prior week...but even after this week's increase in gasoline output, our gasoline production was still 3.2% lower than the 9,584,000 barrels of gasoline that were being produced daily over the same week of last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) fell by 105,000 barrels per day to 5,205,000 barrels per day, after our distillates output had increased by 1,000 barrels per day over the prior week...after this week's decrease in distillates output, our distillates' production for the week was 3.8% below the 5,412,000 barrels of distillates per day that were being produced during the week ending January 11th, 2018....
even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the tenth week in a row and for the 16th time in 30 weeks, rising by 6,678,000 barrels to 258,287,000 barrels during the week to January 10th, after our gasoline supplies had increased by a 4 year high of 9,137,000 barrels over the prior week....our gasoline supplies increased by less this week because the amount of gasoline supplied to US markets increased by 428,000 barrels per day to 8,558,000 barrels per day, while our exports of gasoline fell by 198,000 barrels per day to 608,000 barrels per day, and while our imports of gasoline rose by 42,000 barrels per day to 443,000 barrels per day....after this week's increase, our gasoline supplies were 1.1% higher than last January 11th's gasoline inventory level of 255,565,000 barrels, and remained roughly 5% above the five year average of our gasoline supplies for this time of the year...
even with the decrease in our distillates production, our supplies of distillate fuels increased for the 6th time in 16 weeks and for 16th time in the past 41 weeks, rising by 8,171,000 barrels to 147,221,000 barrels during the week ending January 10th, after our distillates supplies had increased by 5,330,000 barrels over the prior week....our distillates supplies increased by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 188,000 barrels per day to 3,185,000 barrels per day, and because our exports of distillates fell by 373,000 barrels per day to 1,055,000 barrels per day, while our imports of distillates fell by 50,000 barrels per day to 202,000 barrels per day....but even after three weeks of near record inventory increases, our distillate supplies were still 0.7% less than the 140,042,000 barrels of distillates that we had stored on January 11th, 2018, and roughly 3% below the five year average of distillates stocks for this time of the year...
finally, with this week's increase in oil exports and the decrease in oil imports, our commercial supplies of crude oil in storage fell for the sixteenth time in thirty weeks and for the twenty-first time in 50 weeks, decreasing by 2,549,000 barrels, from 431,060,000 barrels on January 3rd to 428,511,000 barrels on January 10th....after that decrease, our crude oil inventories remained near the five-year average of crude oil supplies for this time of year, but were still almost 35% higher than the prior 5 year (2009 - 2013) average of crude oil stocks after the first full week of January, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels....even though our crude oil inventories had generally been rising over the past year, except for during the past summer, after generally falling until then through most of the prior year and a half, our oil supplies as of January 10th were 2.0% below the 437,055,000 barrels of oil we had stored on January 11th of 2018, while rising to 3.8% above the 419,515,000 barrels of oil that we had in storage on January 5th of 2017, but at the same time fell to 11.2% below the 485,456,000 barrels of oil we had in commercial storage on January 13th of 2016...
OPEC's Monthly Oil Market Report
Wednesday of this past week saw the release of OPEC's January Oil Market Report, which covers OPEC & global oil data for December, and hence it gives us a snapshot of the global oil supply & demand situation before OPEC's increased production cuts of up to 2.1 million barrels per day, or more than 2% of global supply, are to go into effect...but as we'll see, this report shows there was already a shortfall of nearly 0.8% of the amount of oil produced globally in December, even as it was less than the larger shortfalls seen earlier this year...
the first table from this monthly report that we'll look at is from the page numbered 58 of that report (pdf page 68), 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...
as we can see from the above table of oil production data, OPEC's oil output fell by 161,000 barrels per day to 29,444,000 barrels per day in December, from their revised November production total of 29,606,000 barrels per day...however that November output figure was originally reported as 29,551,000 barrels per day, which means that OPEC's November production was revised 55,000 barrels per day higher, and hence December's production was, in effect, a 106,000 barrel per day decrease from the previously reported OPEC production figures (for your reference, here is the table of the official November OPEC output figures as reported a month ago, before this month's revisions)...
from that table, we can also see that a 111,000 barrel per day decrease in production by the Saudis, a 76,000 barrel per day decrease in production by Iraq, a 46,000 barrel per day decrease in production by the Emirates, and a 44,000 barrel per day decrease in production by Libya were the major reasons for the December drop in OPEC's output, more than offsetting the increase of 125,000 barrels per day in the output from Angola, while the oil output changes by most other OPEC members had little impact on the total....with this month's increase in Angola's output, and despite the decrease in Iraq's output, they are now the only two OPEC countries whose production was above the output allocation as originally determined for each OPEC 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 earlier last year...these output allocations for December can be seen in the table of OPEC production quotas for 2019 we've included on the left below:
in addition to those cuts, at their meeting with other oil producers on December 6th of this past year, OPEC announced additional production cuts of 500,000 barrels per day through to March 2020 on top of those 2019 allocations, a breakdown of which we have in a table from OPEC on the right above...that table was posted on OPEC's website after their December 6th meeting, and it shows the additional production cuts each of the OPEC members and their allies among other producers are expected to make over the 3 month period beginning January...as you see, the heaviest cuts fall on the core OPEC members of Saudi Arabia. the United Arab Emirates, Kuwait and Iraq, while embargoed Iran and Venezuela remain exempt...obviously, that table would be more meaningful if their current production, or even their expected end production, were included, but i've been unable to find a table with those complete details, so we'll just have to make do switching back and forth between the two tables we have to see how each member is impacted....in addition to those cuts that came out of the OPEC meeting, the Saudis voluntarily pledged to cut an additional 400,000 barrels a day more than was mandated by the December 6th agreement, bringing the total cut for the group to 2.1 million barrels a day, or more than 2% of global output....
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 January 2018 to December 2019, and it comes from page 59 (pdf page 69) of the January 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...
including the 161,000 barrel per day decrease in OPEC's production from what they produced a month ago, OPEC's preliminary estimate indicates that total global oil production decreased by a rounded 0.06 million barrels per day to average 100.28 million barrels per day in December, but that reported decrease came after November's total global output figure was revised higher by 560,000 barrels per day from the 97.78 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 110,000 barrels per day in December after that revision, with higher oil production from the UK, Norway, Canada, Mexico and the US the major reasons for the non-OPEC output increase in December...after the decrease in December's output from that upward revision to November, the 100.28 million barrels of oil per day produced globally in December were 0.07 million barrels per day, or just fractionally lower than the 100.35 million barrels of oil per day that were being produced globally in December a year ago, before their first round of cuts officially kicked in (see the January 2019 OPEC report (online pdf) for the originally reported December 2018 details)...with this month's decrease in OPEC's output, their December oil production of 29,444,000 barrels per day fell to 29.4% of what was produced globally during the month, down from the 29.5% share OPEC contributed in December, and the 29.9% share they had in November....OPEC's December 2018 production was reported at 31,578,000 barrels per day, which means that the 14 OPEC members who were part of OPEC last year produced 2,134,000 fewer barrels per day of oil in December than what they produced a year ago, when they accounted for 31.6% of global output, with a 791,000 barrel per day decrease in output from Saudi Arabia, a 677,000 barrel per day drop in the output from Iran, and a 434,000 barrel per day decrease in the output from Venezuela from that time accounting for most of the year over year decrease...
even with the big upward revision to global oil output that we've seen in this report, there was a still substantial shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...
the above table came from page 31 of the December OPEC Monthly Oil Market Report (pdf page 41), 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 fifth column, we've circled in blue the figure that's relevant for December, which is their estimate of global oil demand during the fourth quarter of 2019...
OPEC has estimated that during the 4th quarter of this year, all oil consuming regions of the globe have used 101.07 million barrels of oil per day, which is an upward revision from the 100.95 million barrels of oil per day they reported for the 4th 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 only producing 100.28 million barrels per day during December, which means that there was a shortage of around 790,000 barrels per day in global oil production when compared to the demand estimated for the month...
the revisions to November output and to 2019 demand (circled in green above) means that the previous surplus of shortfall figures we had computed for prior months should be revised as well...a month ago we estimated a global shortage of around 1,170,000 barrels per day in global oil production during November, based on the figures published at that time...however, as we saw earlier, November's global output figure was was revised higher by 560,000 barrels per day from those figures, while global demand was simultaneously revised 120,000 barrels per day higher, so with these revised figures, we now find that global oil production in November was running roughly 730,000 barrels per day short of demand...also a month ago, we estimated a shortage of 1,580,000 barrels per day for October; hence, with the upward revision to 4th quarter demand, that October oil production shortage would now be 1,700,000 barrels per day...
note in our green ellipse that demand for oil in the 3rd quarter was revised 90,000 barrels per day lower...we had previously computed a global shortage of 3,030,000 barrels per day in September (after the missile attack on Saudi production), a deficit of 1,670,000 barrels per day in August, and a deficit of 2,290,000 barrels per day in July's oil production...with the downward revision to 3rd quarter demand, those shortfalls will now be 2,940,000 barrels per day in September, 1,580,000 barrels per day in August, and 2,200,000 barrels per day in July...
meanwhile, demand for oil in the 2nd quarter was revised 200,000 barrels per day lower.....that would mean that we'd have to revise our most recently computed global oil deficit for June from 310,000 barrels per day to 110,000 barrels per day, that we'd have to revise our May oil shortage from 680,000 barrels per day to 480,000 barrels per day, and that we'd have to revise our global oil deficit for April from 710,000 barrels per day to 510,000 barrels per day...hence, for the 2nd quarter as a whole, even after that big downward revision to demand, the world's oil producers were still producing 257,000 barrels per day less than what was needed...
also encircled in green is an upward revision of 40,000 barrels per day to first quarter demand, a period when oil supplies exceeded demand....that revision means that the global oil surplus of 190,000 barrels per day we had last figured for March would have to be revised to a global oil surplus of 150,000 barrels per day, that the 640,000 barrel per day global oil output surplus we had for February would now be a 600,000 barrel per day global oil output surplus, and the 550,000 barrel per day global oil output surplus we had for January would be revised to a 510,000 barrel per day oil output surplus...
so as you can see, we have gone from a global oil surplus averaging over 400,000 barrels per day in the first quarter of 2018 to an oil shortage of 2, 240,000 barrels per day by the third quarter, and thence to an oil shortage of around 790,000 barrels per day by December....by totaling up those 12 monthly estimates of surplus or shortfall, we find that for the twelve months of 2019, global oil demand exceeded production by roughly 297,900,000 barrels, a net oil shortfall that is the equivalent of almost three days of global oil production at the December production rate....however, most of the media, including industry websites, are still reporting on oil supplies as if we still have a global glut of oil, because that has become the established narrative and because no one makes the effort to look at the actual data...
This Week's Rig Count
the US rig count increased for the 3rd time in the past 22 weeks during the week ending January 17th, but is still more than 26.5% lower than the last rig count of 2018...Baker Hughes reported that the total count of rotary rigs running in the US increased by 15 rigs to 796 rigs this past week, which was still down by 254 rigs from the 1050 rigs that were in use as of the January 18th report of 2019, and 1,133 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in an attempt to put US shale out of business...
the number of rigs drilling for oil increased by 14 rigs to 673 oil rigs this week, which was 179 fewer oil rigs than were running a year ago, and much less than 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 rose by one to 120 natural gas rigs, which was still down by 78 gas rigs from the 198 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 September 7th, 2008...in addition to the rigs drilling for oil & gas, three rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, one in Washoe County, Nevada, and one in Lake County, California, compared to a year ago, when there were no such "miscellaneous" rigs deployed..
offshore drilling activity in the Gulf of Mexico decreased by one rig to 20 rigs this week, as another rig that had been drilling offshore from Louisiana was shut down this week, the 4th Louisiana offshore decrease in a row...however, the 19 rigs that continued drilling in Louisiana waters plus the one that was drilling offshore from Texas was one more than the Gulf of Mexico rig count of 19 rigs during the same week of a year ago, when 18 rigs were drilling offshore from Louisiana and one rig was drilling in Texas waters...since there are no rigs deployed off US shores elsewhere at this time, nor were there a year ago, the Gulf of Mexico count for this year and last is the same as the national total in both cases..
the count of active horizontal drilling rigs was up by 11 rigs to 709 horizontal rigs this week, the highest horizontal rig count since November 8th, but still 220 fewer horizontal rigs than the 929 horizontal rigs that were in use in the US on January 18th 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 up by 5 rigs to 43 vertical rigs this week, but those were still down by 23 from the 66 vertical rigs that were operating during the same week of last year....on the other hand, the directional rig count was down by 1 to 44 directional rigs this week, and those were down by 11 from the 55 directional rigs that were in use on January 11th of 2019...
the details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of January 17th, the second column shows the change in the number of working rigs between last week's count (January 10th) and this week's (January 17th) count, the third column shows last week's January 10th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 18th of January, 2019...
three rigs were added in Texas Oil District 8, or the core Permian Delaware this week, while the rig count in the other Texas oil districts encompassing the Permian basin in Texas were unchanged...since the Permian basin rig count was up by a total of six, that means that the three rigs that were added in New Mexico were also Permian rigs, drilling in the far western reaches of the Permian Delaware...the other Texas rig changes, meanwhile, were the two rigs added in Texas Oil District 2 of the Eagle Ford, while the rig that was pulled out of the Granite Wash was apparently operating in Oklahoma, since activity in the panhandle Texas Oil District 8 was unchanged...Oklahoma, meanwhile, saw a rig addition in the Ardmore Woodford and at least one elsewhere not shown above...the Williston basin only shows a two rig increase while the North Dakota activity increased by 3 rigs because a Williston rig in Montana was shut down at the same time; one Williston rig remains in Montana as of this week, down from two a year ago....meanwhile, the single natural gas rig addition this week doesn't even show up in this weeks tables, as it was in a basin not tracked separately by Baker Hughes...
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Utica Shale well activity as of Jan. 11 -
- DRILLED: 147 (128 as of last week)
- DRILLING: 141 (158)
- PERMITTED: 473 (473)
- PRODUCING: 2,423 (2,423)
- TOTAL: 3,184 (3,182)
Four horizontal permits were issued during the week that ended Jan. 11, and 10 rigs were operating in the Utica Shale.
TOP COUNTIES BY NUMBER OF PERMITS:
- 1. BELMONT: 670 (670 as of last week)
- 2. CARROLL: 525 (525)
- 3. HARRISON: 496 (496)
- 4. MONROE: 428 (428)
- 5. GUERNSEY: 280 (280)
National Geographic writer coming to Belmont County – A well known scientific journalist who’s work has been featured in magazines such as Rolling Stone and National Geographic, will take part a presentation in Belmont County later this month. Justin Nobel has spent the past two years reporting on the the issue of radioactivity caused by the oil & gas industry. He says his work has revealed possible contamination that is posed to the industries workers, communities and the environment. Noble will take part in a forum called Radioactive Risks Posed by the Oil & Gas Industry. It will take place at Ohio University Eastern on Friday January 24. “This is very relevant for local industry workers and their families,” said Jill Hunkler, a local environmental activist. “This information might effect them more than anyone but also may effect community, those concerned about injection wells. This information will alarm them even more about the risk imposed by the irresponsible placement of the injection wells and fracking waste processing facilities “ The presentation will get underway at 5:30 p.m. and will also feature Dr. Julie Weatherington-Rice. She is an environmental scientist who has studied the oil & gas industry of over 40 years. There will also be a question and answer service with those in attendance.
Cleaning up after Ohio’s oil and gas industry brings a growing price tag - Plugging the myriad orphaned oil and gas wells around Ohio costs, on average, more than $110,000 per well, according to a new analysis of Department of Natural Resources data.The research, which pulled from contracts the state awarded in 2019, was shared exclusively with the Energy News Network by the ARO Working Group, a network that studies the decommissioning of oil assets and is affiliated with environmental group Earthworks. Compared with Ohio’s actual cleanup costs, operators are only required to put up a fund, called a bond, of $5,000 per well or $15,000 for all of their wells. This money, a fraction of the true price tag, is returned to operators once they plug their wells, which is meant as an incentive to do so.“My big concern is that the business models here in Ohio are premised on cheap water, cheap waste and cheap landscape change,” About 900 orphaned wells are currently confirmed around the state, although that is a small percentage of the true number, according to Gene Chini, manager of the Orphan Well Program for Ohio’s Division of Oil and Gas Resources Management. “There are thousands more out there that have yet to be found or identified in this state,” Chini said. “We get calls every day from people building homes or plowing fields that come across these wells.” By one state count, there are as many as 19,000 orphan sites in Ohio, where the first oil well was drilled in 1814. Applying current reclamation costs to that number suggests the state could face a $2 billion cleanup bill. , which has plugged more than 1,000 deserted wells to date, is experimenting with an aerial magnetometer, a tool that measures magnetic fields, to identify more wells. “Orphan wells have been found and plugged in a school gymnasium, in building basements, amongst homes, in farm fields, in waterways and wetlands, along shorelines, and within forests,” read a recent department presentation. Some estimates place the number of orphan wells nationwide as high as 3 million. If Ohio’s cleanup costs serve as a rough per-well estimate, fully solving the U.S. orphan well problem could cost hundreds of billions of dollars.
Ohio Activists Rallying Against Bill To Criminalize Pipeline Protests - An advocacy group is opposing an Ohio bill that would restrict protests at sites that are considered "critical infrastructure facilities,” including oil and gas pipelines. Organize Ohio hosted a meeting in Cleveland on Monday to discuss opposition to SB 33, which was passed by the Ohio Senate in May 2019. The measure would criminalize protests occurring at places such as pipelines or utility poles. Backers say they aim to protect the facilities from serious harm. But Jacie Jones of Organize Ohio believes the bill would have a "chilling effect" on free speech. She says that’s happened in other states where similar laws have passed, such as Louisiana and Texas."When they hear about this bill and the effects, they become scared to go out and protest different environmental issues or concerns because they don’t want to be charged with felonies and subjected to the fines and prison sentences that would entail,” Jones says.NPR reported in September that a U.S. district judge blocked South Dakota’s law, saying it was unconstitutional, while protesters arrested under Louisiana’s law were never formally charged. Jones says that the legislation was developed as a response to demonstrations like Standing Rock in North Dakota.
Residents rally against cracker plant -- More than 30 people from communities such as Wheeling, Bridgeport, Moundsville, Shadyside and Weirton held signs and stationed themselves on both sides of W.Va. 2 at the Moundsville Plaza, located across the Ohio River from the proposed plant site. Many drivers honked horns as they passed, and some shouted encouragement and gave thumbs-up signs. PTT Global Chemical America and Daelim Industrial Corp., based in Thailand and South Korea, respectively, obtained an air permit-to-install and a modified wastewater discharge permit for the project in 2018. Environmental groups opposed to the project immediately challenged one of those permits, but that issue was resolved in September, when a settlement was announced. Vincent DeGeorge, representing the activist organization Concerned Ohio River Residents and president of Ohio Valley PEACE, said the protesters have environmental and health concerns. “We’re a group of local citizens who think the truth, all the information about this cracker plant, hasn’t come out, and we’re confident when that information comes out, the environmental concerns, the economic concerns, the health concerns, Ohio River residents will be convinced that this cracker plant is not the way to go, that there are much better alternatives,” he said. “(We’re) letting other people who have concerns about the cracker plant know that they’re not alone.” DeGeorge said they were concerned there would not be baseline monitoring of pollutants from such a plant. He said their projects include seeking funding to monitor the area for emissions and compile data. He also raised concerns that the plastics such a cracker plant would produce would not be regulated and would find their way into the environment. Members of the group also spread word of a petition on the Concerned Ohio River Residents website, Facebook page and at NoCrackerPlantOV.com.
Greenhouse gases from oil and gas projected to continue to increase - — The fracking boom across the country has resulted in greenhouse gas emissions steadily climbing each year since the United States has become the largest producer of oil and gas in the world. As a result of the boom, there are plans over the next five years to build or extend 157 petroleum and natural gas drilling sites and chemical manufacturing and refinery plants across the country, according to federal records. That expansion will result in greenhouse gas emissions across the U.S. totaling 990.5 million tons per year by 2025, according to a study by the Environmental Integrity Project. The nonpartisan and nonprofit group, established in 2002 by former U.S. Environmental Protection Agency attorneys, said that’s the equivalent of 50 new coal-fired power plants.The emissions estimate includes the proposed Thailand-based PTT Global Chemical America ethane petrochemical plant in Belmont County. The so-called “cracker” plant, which would use natural gas and create ethylene, an ingredient used in plastics, would emit an estimated 1.785 million tons of greenhouse gases each year.“It’s company-supplied information. The big picture, especially for Appalachia — Ohio, Pennsylvania and West Virginia — is this facility would create demand for even more oil and gas extraction and kind of lock this region into that economy,” said Courtney Bernhardt, research director for the Environmental Integrity Project. “Right now, renewable sources of energy are available. And I know that this facility would be creating plastic, ultimately, but there are other ways to make plastic.”Ohio officials say the estimated $5 billion plant, first announced in 2015, would be one of the state’s largest economic development projects ever — if it goes through. To construct the plant, thousands of construction jobs would be needed, and once the plant is up and running, there would be about several hundred permanent jobs.While there has been no official announcement to move forward with the plant, permits have already been secured. JobsOhio, the state’s economic development nonprofit agency, awarded $30 million to prepare the site. PTT Global Chemical America spent more than $100 million to conduct engineering designs.The company also contributed $10,000 to Gov. Mike DeWine’s campaign fund a year ago.
We’re past time for global plastic intervention - Randi Pokladnik - - Civilization stands at the edge of a dangerous precipice. Warning signs are all around us. We are destroying our home. The bushfires in Australia serve as another example of the many ways climate change has exacerbated extreme weather across the planet. Scientists say an area twice the size of the country of Wales, nearly 14 million acres, has burned. Scientific facts confirm the massive amounts of man-made greenhouse gases being pumped into the atmosphere are changing the planet’s climate systems. However, what is not surprising is that the fossil fuel industry was aware that burning coal, oil and gas would increase greenhouse gas emissions and lead to increases in the planet’s temperature. Their scientists knew this more than 50 years ago. We must remember that this industry is responsible for: 11 million gallons of oil spilled during the Exxon Valdez accident in 1989; 168 million gallons of oil that contaminated the gulf waters after the Deepwater Horizon explosion in 2010; and locally, the well pad explosion in Belmont County in 2018 that spewed out 90 tons of methane an hour for 20 days. The plans to create a petrochemical hub in the Ohio Valley happened behind closed doors with little to no input from the public.Given the alarming amount of plastic wastes and microplastics in our water, food, and air, many countries are now banning single-use plastic packaging which makes up close to 50 percent of plastic waste and is discarded within minutes of use. More than 60 counties have banned or taxed single-use plastic bags.Countries like China that once accepted our plastic wastes, which totaled 39 million tons last year, are now refusing our wastes. By 2021, Thailand and Malaysia will ban imported plastic waste. Where will all that plastic go?Incineration creates deadly emissions like dioxin and furans. The United States recycles only 9 percent of plastic wastes. We will be drowning in plastic if the fossil fuel industry has its way.According to ICIS, a global energy and petrochemical research firm, “U.S. producers of polyethylene plan to increase their production capacity by as much as 75 percent by 2022,” and much of this increase will be exported to foreign markets.It is beyond time for a global plastic intervention, but don’t count on our politicians to take a leadership role. As Upton Sinclair once said, “It is difficult to get a man to understand something when his salary depends upon him not understanding it.”
Massive oil refinery leaks toxic chemical in the middle of Philadelphia — Last May, an air monitor on the border of the East Coast's largest oil refinery recorded a level of benzene, a cancer-causing gas, more than 21 times the federal limit. In June, an explosive early morning fire rocked the Philadelphia Energy Solutions refinery, terrifying nearby residents. Weeks after the disaster, as PES filed for bankruptcy and wound down operations, another air monitor in the network that rings the facility quietly registered the same sky-high reading for benzene. Long-term exposure to the sweet-smelling chemical has been linked to leukemia, lymphoma and a host of blood and immune system disorders. That monitor, on the edge of this 1,300-acre complex of steel and pipe, is across an expressway from schools, parks, a strip mall and hundreds of homes. Charles Reeves lives less than a mile and a half north of both air monitors in the largely African American neighborhood of Grays Ferry. A community organizer in this area of low-slung row houses, Reeves keeps tabs on the news in the neighborhood. He said no one informed him or his neighbors that they may have been exposed to benzene until he was contacted by NBC News, E&E News and the Investigative Reporting Workshop, a nonprofit newsroom based at American University. "Poor people don't get information," said Reeves, 61, a grandfather and prostate cancer survivor. "Whichever way that blows, we're going to be affected." The refinery disaster in June unleashed over 5,200 pounds of deadly hydrofluoric acid. A 4 a.m. leak inside a unit that produced high-octane gasoline caused a series of explosions that sent a ball of fire into the night sky. One blast hurtled a slab of metal bigger than a school bus across the river. Quick action by workers meant no one was killed or seriously injured. The refinery ceased production in August. The catastrophic blaze provided a stark illustration of the hazards the refinery has long posed for Philadelphians. But even in its wake, officials gave no formal notice to residents that the same facility had registered among the highest benzene levels of any refinery in the country, according to data submitted to the U.S. Environmental Protection Agency. Philadelphia Energy Solutions, or PES, is just one of a dozen refineries of the more than 130 refineries operating across the country that have consistently exceeded the EPA's "action level" of 9 micrograms per cubic meter of air, according to data compiled and analyzed by the Environmental Integrity Project, a watchdog group that advocated for the fenceline monitoring program now required at all refineries. former EPA officials who examined the hard-to-access data compared ongoing high benzene concentrations around the Philadelphia refinery and near other top benzene emitters to levels more often seen in China and India. And they criticized local and federal officials for failing to address the problem or adequately warn the public.
Future of PES refinery may be decided at Friday auction - The future of the 1,300-acre site by the Delaware River, currently occupied by the Philadelphia Energy Solutions refinery, could be decided Friday behind closed doors in New York. The company filed for Chapter 11 bankruptcy in July, a month after a catastrophic fire and explosion destroyed part of the refinery’s capacity. The refinery shut its operations right after the fire, laying off nearly 1,000 employees. The refinery complex has been in the midst of a sale process since November. By then, 15 parties had expressed interest in acquiring the facility. Final formal bids were submitted Jan. 10, under nondisclosure agreements. The assets of PES could be sold to one or more buyers. An auction is expected to take place Friday at the New York City offices of the company’s law firm Kirkland & Ellis LLP, to maximize the sale price and provide the biggest value to PES. But the company also could decide to take one bid and call the auction off. “It’s very much an inside decision process, and it’s very hard to tell,” said Peter Winslow, a representative of SMART, a coalition of environmental organizations, who has been closely following the proceedings in U.S. Bankruptcy Court in Wilmington. In December, Bankruptcy Judge Kevin Gross approved the company’s restructuring proposal, which lacked critical information for creditors. According to court documents, PES will send that information after the sale and insurance recovery process — the company is expecting a $1.25 billion insurance payout — for creditors to vote on the plan before Feb. 3. The restructuring plan and the winning bidder would be presented in bankruptcy court at a confirmation hearing on Feb. 6.
Lake spill earns Mariner East pipelines another $2 million fine - The Pennsylvania Department of Environmental Protection added a $2 million fine this month to the tally of penalties racked up by Sunoco Pipeline for violations during construction of its Mariner East 2 pipeline project. The fine, announced Thursday but issued on Jan. 3, is on top of more than $13 million that Sunoco, a subsidiary of Texas-based Energy Transfer LP, has already been levied by DEP for spills and other damage the company caused while installing its cross-state natural gas liquids pipelines. The $1.95 million penalty is for a series of spills of lubricating drilling fluids in 2017 while the company was boring paths for parallel pipelines under Raystown Lake in Huntingdon County. More than 208,000 gallons of drilling fluids emerged in the lake, covering 8 acres of its bottom, DEP said. “In numerous cases, the company failed to immediately report those releases,” DEP Secretary Patrick McDonnell said. Some spills were not reported until 537 days after they occurred, according to the settlement document. On top of the fine, Sunoco will commit at least $1.15 million to improve fish habitat in Raystown Lake. It also will implement a plan to control invasive aquatic plants in 110 acres of the lake. Energy Transfer spokeswoman Vicki Granado said the company is "pleased to come to an agreement with the DEP regarding our work at Raystown Lake," which she noted is an important recreational area. "This will allow us to move forward to complete our construction activities in this area and others," she said. The Mariner East project includes three pipelines that traverse southern Pennsylvania, carrying propane, butane and ethane from southwestern Pennsylvania shale gas wells to the Philadelphia area, mostly for export. DEP recently issued Energy Transfer a $30.6 million fine for the explosion of its Revolution pipeline in Beaver County in September 2018. Under that agreement, DEP resumed reviewing environmental permits for Energy Transfer projects, including Mariner East, for the first time in nearly a year. DEP recently issued Energy Transfer a $30.6 million fine for the explosion of its Revolution pipeline in Beaver County in September 2018. Under that agreement, DEP resumed reviewing environmental permits for Energy Transfer projects, including Mariner East, for the first time in nearly a year.
Pennsylvania orders gas well plugged in fight over methane - — Gov. Tom Wolf’s administration on Monday told Range Resources that it must fix a Marcellus Shale natural gas well “once and for all” that it maintains has leaked methane since 2011 and contaminated groundwater and streams in north-central Pennsylvania. Wolf’s Department of Environmental Protection in 2015 issued — and then later rescinded — $8.9 million in fines over the well to its Fort Worth, Texas-based owner, which contends that the Lycoming County well is not the source of the methane contamination. The department insisted Monday that the Harman Lewis well’s cement casing is defective and that Range Resources’ cooperation is sporadic. The department’s 13-page order issued Monday gives Range Resources two months to submit a plan to reduce the gas migration and, after the department approves the plan, four months to submit a plan to plug the well and a bore hole next to it. “We have attempted to resolve this in good faith but after numerous attempts, the operator still has not completely addressed these violations,” Patrick McDonnell, Wolf’s environmental protection secretary, said in a statement. Range Resources’ refusal to accept responsibility and address the problem “is unacceptable,” McDonnell said, and the order is designed to solve the problem “once and for all.” A Range Resources spokesman, Mark Windle, said the company strongly disagrees with the department’s order. “We have worked tirelessly to fully cooperate with both regulators and nearby residents for years despite extensive third-party studies and analysis that determined the methane in the groundwater is naturally-occurring,” Windle said in a statement. Attempts in 2015 and 2016 to patch the cement well-casing on the Harman Lewis well apparently didn’t work and, in one attempt to reenter the well bore in 2016, Range mistakenly drilled outside the casing of the gas well, leaving an open bore hole near the gas well, the department said. Department inspectors continued to find combustible gas in groundwater, in soil surveys in nearby farm fields and surfacing on Greg’s Run and Sugar Run, the department said.
Bill to rollback natural gas drilling regulations clears House committee - Despite the looming promise of Gov. Tom Wolf’s veto, a Pennsylvania House panel has advanced a bill loosening regulations for conventional gas drillers. The bill sponsored by state Senate President Pro Tempore Joe Scarnati, R-Jefferson, cleared the House Environmental Resources and Energy Committee 16-9, with all Republicans, and one Democrat, voting in favor. The proposal rolls back an eight-year-old regulatory regime for the state’s natural gas drillers, known as Act 13, that was signed into law by former GOP Gov. Tom Corbett. The law set standards for typical gas production drilling — imagine an oil derrick — as well as unconventional drilling, or fracking. Included in the law are rules for land restoration around wells, conventional and unconventional, that the state’s chief oil and gas regulator has previously praised. But those same standards appear onerous to many conventional well operators, which are often smaller, independent companies, according Pennsylvania Independent Oil and Gas Association president Dan Weaver. Conventional drilling is a $1.2 billion industry, according to Weaver. Fracking, meanwhile, has contributed to four times that total in fees, taxes and royalties to the commonwealth’s coffers alone, according to industry group Marcellus Shale Coalition. If the law passed, the industry would be governed by 1980’s vintage regulations, with some adjustments to raise the threshold for reporting spills to the state. Such a rollback “poses an undeniable risk to the health and safety of our citizens, the environment, and our public resources,” Wolf spokesperson J.J. Abbott said in an email. For example, under the proposal advanced Monday, only spills greater than 210 gallons of drilling waste water, or five standard oil barrels, and 48 gallons of oil, or two barrels, would have to be reported — barring a risk to “downstream users of waters of the Commonwealth.” Previously, the state has required drillers to report spills of as little as five gallons of drilling waste water, DEP Secretary Patrick McDonell told the state Senate in a letter last October. Those new reporting standards were already a compromise. On Monday, the House panel included an amendment that assigned the new standards, and removed a provision that would allow drilling waste water to be sprayed on state dirt roads as a dust deterrent. The practice was allowed in Pennsylvania until 2018, when the state reversed its stance. A 2018 Penn State University study found that the use of drilling waste water risks the run off of heavy metals into local water supplies. Despite the changes, Wolf’s veto threat holds, Abbott said.
Wolf says despite GOP compromise, drilling bill still poses too much environmental risk - — State House and Senate lawmakers appear poised to pass a bill that would loosen some of the laws that govern certain oil and gas drillers. But despite a significant amendment intended to win over skeptical Democrats, Governor Tom Wolf and others say the measure still allows too much pollution.The legislation, SB 790, is sponsored by GOP Senate President Pro Tempore Joe Scarnati. It would give conventional oil and gas drillers looser environmental standards than the ones the state imposes on unconventional operators. Conventional drillers tend to be smaller companies that drill shallower wells. They’ve long complained they shouldn’t be subject to the same rules as unconventional drillers, which are generally major corporations extracting oil and gas from the Marcellus Shale. Among other things, the bill would allow conventional operators to spill more drilling wastewater — often referred to as brine — without notifying the Department of Environmental Protection, and likewise change the standards for crude oil spills. A 2018 Penn State study found that brine can contain contaminants like radium, a radioactive element and known carcinogen, “often many times above drinking water standards.” It also found that the water has the potential to leach metals, salts and radioactive material into surface or groundwater, soil and air. An amendment, added Monday in the House Environmental Resources and Energy Committee, softened the bill somewhat, reducing the amounts of oil and brine it would allow conventional drillers to spill before reporting it — from five to two barrels of oil, and from 15 to five barrels of brine. Republicans, like Butler County’s Daryl Metcalfe, said they compromised because they’re worried conventional drillers are struggling. “This is an issue that we’ve been working on,” he said. “I mean, how long do you expect companies to exist when they’re being overregulated to the point of losing the people and resources that they actually need to continue to have a business?” Several Democrats in Monday’s Environmental Resources and Energy Committee hearing said they agree conventional and unconventional drillers require distinct rules. Delaware County Democrat Greg Vitali, who serves as the committee’s minority chair, noted that he and others have traveled to well sites across the state to see the differences for themselves. But, he maintained, the bill needs work. “It doesn’t address the rollback of water supply protection [or] the avoidance of erosion and sediment control,” Vitali said. “There’s still a weakened protection for public resources [and it] still allows more wells to go unreported.”
Report: 21% drop expected in 2020 natural gas impact fee - A state agency is predicting a 21% drop in natural gas impact fee revenue in 2020, largely because of falling natural gas prices. The Pennsylvania Independent Fiscal Officee stimates that impact fee collections will total $198.2 million this year — down from $251.8 million last year. The 2019 fee must be paid by natural gas producers by April 1 and will be disbursed by the Pennsylvania Public Utility Commission in July. The impact fee is the annual fee that the state applies to each new unconventional (i.e. horizontal) well drilled into the Marcellus shale. Some of the money is distributed directly to counties to offset the costs of increased drilling activity. Some is made available to individual communities through grants. The impact fee is highest in a well’s first operating year and can range from $60,000 in the well’s first year to $5,000 in the well’s 15th year, according to the Marcellus Shale Coalition. The IFO said the primary reason for the expected 21% drop was natural gas prices which dipped below the $3 trigger in the law (Act 13 of 2012), causing a $5,000 per-well decrease in the impact fee. The average annual price of natural gas on the New York Mercantile Exchange for 2019 was $2.63 per million British thermal units, according to IFO. Per Act 13’s provisions, impact fee revenue is distributed according to four broad categories: state oversight agencies; counties and municipalities directly affected by well drilling activity; all 67 counties for conservation, recreation and bridge repairs; and statewide environmental grant programs, such as the Marcellus Legacy Fund.
Time to Overturn Precedent on FERC Orders, Landowners Tell Court - Federal judges should seize an opportunity to reverse a “fundamentally flawed” precedent that keeps pipeline opponents out of court until it’s too late to halt a project, lawyers for landowners and environmentalists said in new court filings. “The United States Constitution and federal common law guarantee property owners a meaningful opportunity to be heard in opposition to a faulty public use determination before their property can be permanently taken,” the Jan. 10 brief says, referring to a stretch of the Atlantic Sunrise natural gas pipeline in Pennsylvania. The filing is the opening salvo in a high-stakes case set for argument in March before the full slate of active judges for the U.S. Court of Appeals for the District of Columbia Circuit. Energy and administrative law experts say the outcome could have broad implications across the natural gas and power sectors. The case centers on how the Federal Energy Regulatory Commission fields challenges to its gas pipeline approvals, a process one D.C. Circuit judge deemed “Kafkaesque.” If landowners, environmentalists, or others want to challenge a FERC permit, they must first file a petition with the commission and wait for it to be resolved before pursuing a lawsuit. The Natural Gas Act gives FERC 30 days to take action on a challenge, but the agency routinely issues “tolling orders,” which indefinitely extend the deadline for resolving the petition. FERC litigants have long criticized tolling orders as unfair and unconstitutional. Challengers often can’t get to court to challenge a project before construction has begun—or sometimes finished.
Low Gas Prices Crush Appalachia Shale Boom - Low natural gas prices have finally brought the decade-long shale gas boom in Appalachia to a halt. Gas production in Appalachia declined by about 1 billion cubic feet per day (Bcf/d) over the past 30 days, bringing output down to an average of 32.7 Bcf/d, according to S&P Global Platts Analytics. That helped drag down overall U.S. gas production to 91.8 Bcf/d, a 1.7 percent decline from 93.4 Bcf/d in November. The Permian hogs a lot of attention in the press, but the Marcellus shale has been growing at a blistering rate for about a decade. That is now coming to an end as the shale gas industry struggles with oversupply and low prices, lack of profits, debt, investor skepticism and also competition from associated gas in the Permian. Natural gas prices fell sharply last year, ending the year down more than 25 percent. The rig count in the Marcellus fell by 1 last week, dropping the total to 40. Eight months ago there were 65 rigs operating in the area. Front-month gas contracts are trading at about $2.12/MMBtu, although at the wellhead prices can be much weaker. S&P said that prices at Dominion South, a hub in the Marcellus, have averaged just $1.78/MMBtu in the past month. S&P says that average breakeven prices are $1.80/MMBtu, but that likely understates the price level that drillers need, given the struggles that many have gone through. “Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” Toby Rice, EQT’s new president and CEO, told the West Virginian legislature in December “A lot of this development doesn’t work as well at $2.50 gas.” An IEEFA analysis from last November found that seven of the largest producers in Appalachia spent nearly a half billion dollars more than they generated in the third quarter. With natural gas prices wallowing down close to $2/MMBtu, the cash burn rate may grow worse, unless the spending cuts continue. Range Resources announced on January 6 that it would take an ax to its spending plans, cutting capex by 29 percent for 2020 compared to last year’s levels. The company also suspended its dividend, saving $20 million annually, Chevron recently announced a write down on the order of $11 billion for the fourth quarter, with its assets in Appalachia the principle cause.The situation in the Appalachia is worse than for oil drillers in North Dakota, Colorado or Texas. To be sure, unconventional oil drilling is also riddled with financial problems and is based on a questionable business model. Oil wells still suffer from steep decline rates.
Is Chevron's $11B Write-Down an Oilpatch Warning? - In December 2019, American oil major Chevron announced a major write-down of some $11 billion in the value of its assets, including its gas holdings in the Appalachia region, a deep-water Gulf of Mexico project and its proposed Kitimat LNG export project in British Columbia. In fact, Chevron’s Appalachian shale projects contributed to more than half of a massive impairment charge that the company reported for the last quarter.This write-down is in response to Chevron’s own long-term forecast for oil and gas prices, which predicted much lower energy prices than previously. In December Chevron Chief Executive Mike Wirth in an interview with the Wall Street Journal said: “We have to make the tough choices to high-grade our portfolio and invest in the highest-return projects in the world we see ahead of us; and that’s a different world than the one that lies behind us.”Decision makers at Chevron have realized the company is facing a market surplus in both oil and gas worldwide, which is impacting profit margins. As a result of such factors, it is becoming increasingly difficult to justify investment in large gas fracking projects, especially with the prospect of slowing demand. Is it time to change the industry’s exploration strategy to more profitable targets? It is likely that this California-based oil major will not be alone amongst oil companies announcing that their holdings in terms of market value are likely to be worth significantly less than previously estimated. This is because of current market conditions that are resulting in many American fracking projects failing to break even, and fluctuating public/investor concerns about the long-term future of the industry. A recent study by Institute for Energy Economics and Financial Analysis (IEEFA) found that for many operators, investing in Appalachia fracking operations has resulted in losing money. In its recent study published in November 2019, Negative Cash Flows Highlight Struggles of Appalachian Fracked Gas Producers,[i] the results found that at least seven of the largest frackers in the region had burned through half a billion dollars in the third quarter of 2019. The writers of the report found that, “Despite booming gas output, Appalachian oil and gas companies consistently failed to produce positive cash flow over the past five quarters.” The IEEFA study discovered that of the seven companies examined, five enterprises were losing money, including Antero Resources, Chesapeake Energy, EQT, Range Resources, and Southwestern Energy. However, only Cabot Oil & Gas and Gulfport Energy were making a profit in the third quarter.
Is the US Shale Boom Really Slowing Down? -Since taking flight in 2008, the American shale oil revolution has probably been the biggest energy story since the end of World War II. U.S. crude oil production has leaped 160 percent to almost 13 million b/d. Shale has transformed global energy markets and obliterated the long-held notion that U.S. crude production peaked in 1970 at 9.7 million b/d. In fact, thanks to shale, the U.S. has accounted for almost all new global oil production over the past five years. For 2019 alone, the shale industry added some 1.2 million b/d of crude, enough to even cover new global demand. The emerging question now is whether or not the U.S. shale oil boom is slowing down. In truth, however, the more poignant question is whether or not the industry is just “growing more slowly.” Indeed, these are fundamentally different questions that too often get conflated. Regardless, already accounting for a rising 80 percent of U.S. crude production, without shale there may be no new U.S. supply. For sure, rapid shale well decline rates mean more drilling, higher debt, and smaller profits. The question of peaking shale though really lies in West Texas’ Permian basin. The Permian is now one of the largest oilfields in the world and accounts for over 35 percent of U.S. crude production. The Permian though has some 3-4 million b/d of new pipeline capacity coming within the next few years, with numerous additional gas pipelines meaning less flaring and more oil. Further, if oil prices can stick above $65 or $70, U.S. shale would be given the proverbial “shot in the arm” to better its finances. Such low prices in recent years have already forced the industry to slash costs and greatly increase efficiency. Many producers have sharpened their knife so much that they have breakevens in the $40 range. But the real driving force behind more U.S. oil production is the ongoing importance of oil. Let us be clear: oil supplies some 33 percent of global energy and projections of absolutely declining demand are speculation since oil currently has no material substitute. Although lower in 2019, global oil demand usually rises at 1.3 million b/d. Any slower growth in oil demand comes more from slower economic conditions than any structural change. Electric cars are overstated since they are not affordable. The average Tesla buyer, for instance, makes a whopping $400,000 per year. The rise of gas-guzzling SUVs in the still developing nations will likely compensate for oil demand reductions that come from electric cars. Indeed, an ever-expanding U.S. oil export complex will mandate more domestic production. We already know that the oil is there: in December 2018, the “largest U.S. oil and gas discovery ever” was made in the Permian basin. Nationally, proven reserves have more than doubled over the past decade to 65 billion barrels. The resource available is many times that.
EIA expects lower natural gas prices in 2020 as production outpaces demand - In its January 2020 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that average U.S. natural gas prices will be 9% lower in 2020 than in 2019. EIA expects lower natural gas prices will be the result of continued production growth primarily in response to Improved drilling efficiency and cost reductions, higher associated gas production from oil-directed rigs, and increased takeaway pipeline capacity from the Appalachian and Permian production regions This production growth outpaces the growth in domestic demand and exports. EIA expects the natural gas spot price for the U.S. benchmark Henry Hub will average $2.33 per million British thermal units (MMBtu) in 2020, about 24 cents lower than the 2019 average of $2.57/MMBtu. Following a year of decline, EIA expects 2021 natural gas prices to rise by 9% because of upward pricing pressure from declining growth in natural gas production. EIA expects record volumes of U.S. dry natural gas production to continue through 2020, from an estimated 92.0 billion cubic feet per day (Bcf/d) in 2019 to 94.7 Bcf/d in 2020. Most U.S. production will come from the Appalachian Basin in the Northeast, followed by the Permian Basin in western Texas and New Mexico and the Haynesville shale formation in eastern Texas. Cost reductions in drilling and well completions and improved drilling efficiency will support continued record-production levels in 2020. In addition, a growing share of natural gas production is coming from oil wells that produce natural gas, also called associated gas. Increased takeaway capacity from the highly productive Appalachian and Permian production regions will further enable growth. However, in 2021, EIA expects dry natural gas production to decline by less than 1% to 94.1 Bcf/d in response to lower forecast natural gas spot prices in 2020, which would reduce Appalachian Basin production. EIA forecasts natural gas consumption to decrease slightly in the residential and commercial sectors as a result of expected milder weather that will require less energy for space heating in the winter and air conditioning in the summer. Based on forecasts by the National Oceanic and Atmospheric Administration, EIA forecasts 1.8% fewer heating degree days (HDD) in 2020 compared with 2019, which had a colder-than-normal first quarter. EIA expects U.S. natural gas use in the electric power sector to increase 1.3% in 2020 as a result of natural gas-fired generation additions that continue to displace coal-fired generation. However, in 2021, because of a forecast of higher natural gas spot prices and increased competition from renewables, EIA estimates that natural gas consumption in the electric power sector will decline 3.2% in 2021. EIA expects the natural gas share of electricity generation in 2021 to be 37%, about the same as its 2019 share, while coal’s share of electricity generation will fall from 24% in 2019 to 21% in 2021.
US working natural gas in underground storage drops by 109 Bcf: EIA — US working gas stocks fell by a larger-than-anticipated margin last week, prompting meager gains to Henry Hub following the Thursday morning announcement. Storage inventories fell 109 Bcf to 3.039 Tcf for the week ended January 10, the US Energy Information Administration reported Thursday morning. The pull was more than an S&P Global Platts' survey of analysts that called for a 92 Bcf draw. It even proved to be greater than responses from analysts polled, with the largest estimate expecting a 101 Bcf draw. The withdrawal was also stronger than the 84 Bcf pull reported during the corresponding week in 2019, but less than the five-year average draw of 194 Bcf, according to EIA data. As a result, stocks were 449 Bcf, or 19.4%, more than the year-ago level of 2.545 Tcf and 149 Bcf, or 5.2%, more than the five-year average of 2.890 Tcf. The draw was more than double the 44 Bcf pull reported for the week ended January 3. Total demand was 6.3 Bcf/d higher on average for the reference week as residential-commercial demand, and power burn gained 3.2 Bcf/d and 2 Bcf/d, respectively, according to S&P Global Platts Analytics. The Northeast saw the largest increase at 3 Bcf/d, although demand there is still lower than normal after nearly a month of significantly warmer-than-normal weather. Another 0.8 Bcf/d of the total US demand growth during the week came from higher exports to Mexico. Upstream, supplies were marginally higher, thanks in no part to production, which fell by 0.8 Bcf/d on the week, mostly a drop in Texas. Canadian imports and LNG sendout helped offset this drop in supplies, leaving total supplies 0.3 Bcf/d higher from the week before. The NYMEX Henry Hub February contract rose 4 cents to $2.16/MMBtu in the minutes of trading following the larger-than-expected weekly storage report. The February-March strip traded down by nearly 7 cents Wednesday, bringing the contract pair to an average $2.10/MMBtu price. Expectations for structurally weak gas prices go unchallenged at this point given the massive supply growth the US has seen in the past year. It also leaves open several possibilities for prices to climb in the medium to long term. Further clarity should come as producers release updated guidance in the coming weeks, with many major producers expected to announce far-more conservative upstream development plans than in years past. A forecast by S&P Global Platts Analytics' supply and demand model calls for a draw of 70 Bcf for the week ending January 17, which would increase the surplus to the five-year average by more than 100 Bcf. US demand is down by roughly 3 Bcf/d overall, after cooler weather in the Midwest helped offset sizable demand declines in the Northeast and Southeast, according to Platts Analytics. The Northeast alone has seen demand fall by 4.5 Bcf/d week on week, as temperatures there are trending 8 degrees warmer over the same period.
Natural-gas futures log lowest finish since 2016; oil prices post a second weekly decline - Natural-gas futures fell Friday as ample U.S. supplies and forecasts for milder-than-normal weather in much of the nation pushed prices to their lowest finish since May 2016. Oil futures, meanwhile, ended slightly higher Friday, but marked a weekly decline for a second week. February natural gas lost 7.4 cents, or 3.6%, to settle at $2.003 per million British thermal units, with prices down about 9% for the week, according to FactSet data. February West Texas Intermediate oil CLG20 added 2 cents, or 0.03%, to settle at $58.54 a barrel on the New York Mercantile Exchange, with front-month contract prices down nearly 0.9% from the week-ago finish.
EQT, Largest US Natural Gas Producer, Takes $1.8 Billion Write-Down, Admits it Can’t Succeed in Low-Price Shale-Gas Environment - The largest natural gas driller in the United States just announced a massive write-down for its assets, offering more evidence that the shale sector faces fundamental problems with profitability. In a regulatory filing on Monday, Pittsburgh-based EQT took a $1.8 billion impairment for the fourth quarter, as the natural gas market continues to sour. EQT said that the write down comes as a result of the “changes to our development strategy and renewed focus on a refined core operating footprint,” which is a jargon-y way of saying that some of its assets are now worth much less.EQT also slashed spending for 2020 to between $1.25 and $1.35 billion, down by another $50 million compared to the guidance the company provided in the third quarter of last year. Although not a household name, EQT is the largest gas producer in the country, and is a giant in the Marcellus shale. EQT purchased Rice Energy in 2017, growing into a huge gas producer and pipeline company, but it has posted disappointing results in the last few years. So far, the company’s problems continue. Natural gas prices slid sharply in 2019, and are at rock-bottom levels, particularly for the time of year. According to the FT, while Henry Hub natural gas prices for February delivery trade at $2.24/MMBtu, they are only trading at around $1.83/MMBtu at the Dominion South hub in Pennsylvania. EQT itself admits that it can’t succeed in this environment. “Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” Toby Rice said in December “A lot of this development doesn’t work as well at $2.50 gas.”EQT hopes to cut $1.5 billion in debt by selling assets and boosting cash flow. However, the cash flow part will be hard to pull off with prices stuck in the doldrums.Moody’s cut EQT’s credit rating on Monday to Ba1 with a negative outlook, moving it into junk territory after the gas giant said it would issue new bonds to refinance debt. “EQT’s significantly weakening cash flow metrics in light of the persistent weak natural gas price environment and the company’s intent to refinance its 2020 maturities in lieu of debt reduction through repayment drives the ratings downgrade,” Moody’s senior analyst Sreedhar Kona said.The agency also noted the “volatility associated with the cash flow of pure-play natural gas producers necessitate a higher retained cash flow to debt ratio threshold than EQT can deliver over the medium term even with significant debt reduction.” “Additionally, EQT’s cash flow metrics compare poorly to other Baa3 rated oil producing companies, despite EQT’s size and scale,” Moody’s concluded
U.S. Gas Giant Downgraded To Junk Status - The largest natural gas driller in the United States just announced a massive write-down for its assets, offering more evidence that the shale sector faces fundamental problems with profitability.In a regulatory filing on Monday, Pittsburgh-based EQT took a $1.8 billion impairment for the fourth quarter, as the natural gas market continues to sour. EQT said that the write down comes as a result of the “changes to our development strategy and renewed focus on a refined core operating footprint,” which is a jargon-y way of saying that some of its assets are now worth much less.EQT also slashed spending for 2020 to between $1.25 and $1.35 billion, down by another $50 million compared to the guidance the company provided in the third quarter of last year.Although not a household name, EQT is the largest gas producer in the country, and is a giant in the Marcellus shale. EQT purchased Rice Energy in 2017, growing into a huge gas producer and pipeline company, but it has posted disappointing results in the last few years. The poor performance led to an internal battle for control of the company. Toby Rice, who co-founded Rice Energy and maintained small ownership stakes in EQT after the tie up, wrestled control from management, convincing the company’s board that he could right the ship. He became CEO last year.So far, the company’s problems continue. Natural gas prices slid sharply in 2019, and are at rock-bottom levels, particularly for the time of year. According to the FT, while Henry Hub natural gas prices for February delivery trade at $2.24/MMBtu, they are only trading at around $1.83/MMBtu at the Dominion South hub in Pennsylvania. EQT itself admits that it can’t succeed in this environment. “Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” Toby Rice said in December “A lot of this development doesn’t work as well at $2.50 gas.” EQT hopes to cut $1.5 billion in debt by selling assets and boosting cash flow. However, the cash flow part will be hard to pull off with prices stuck in the doldrums.
EIA forecasts slower growth in natural gas-fired generation while renewable energy rises --In its latest Short-Term Energy Outlook (STEO), released on January 14, the U.S. Energy Information Administration (EIA) forecasts that generation from natural gas-fired power plants in the electric power sector will grow by 1.3% in 2020. This growth rate would be the slowest growth rate in natural gas generation since 2017. EIA forecasts that generation from nonhydropower renewable energy sources, such as solar and wind, will grow by 15% in 2020—the fastest rate in four years. Forecast generation from coal-fired power plants declines by 13% in 2020.During the past decade, the electric power sector has been retiring coal-fired generation plants while adding more natural gas generating capacity. In 2019, EIA estimates that 12.7 gigawatts (GW) of coal-fired capacity in the United States was retired, equivalent to 5% of the total existing coal-fired capacity at the beginning of the year. An additional 5.8 GW of U.S. coal capacity is scheduled to retire in 2020, contributing to a forecast 13% decline in coal-fired generation this year. In contrast, EIA estimates that the electric power sector has added or plans to add 11.4 GW of capacity at natural gas combined-cycle power plants in 2019 and 2020.Generating capacity fueled by renewable energy sources, especially solar and wind, has increased steadily in recent years. EIA expects the U.S. electric power sector will add 19.3 GW of new utility-scale solar capacity in 2019 and 2020, a 65% increase from 2018 capacity levels. EIA expects a 32% increase of new wind capacity—or nearly 30 GW—to be installed in 2019 and 2020. Much of this new renewables capacity comes online at the end of the year, which affects generation trends in the following year.Forecast generation mix varies in each of the 11 STEO electricity supply regions. A large proportion of the retired coal-fired capacity is located in the mid-Atlantic area, where PJM manages the dispatch of electricity. EIA forecasts that coal generation in the mid-Atlantic will decline by 37 billion kilowatthours (kWh) in 2020. Some of this decline is offset by more generation from mid-Atlantic natural gas-fired power plants; EIA expects generation from these plants to grow by 23 billion kWh. In the Midwest, where the Midcontinent ISO (MISO) manages electricity, EIA expects coal generation to fall in 2020 by 33 billion kWh. This decline is offset by an increase in natural gas electricity generation (12 billion kWh) and by nonhydropower renewable energy sources (13 billion kWh). The regional increase in renewables is primarily a result of new wind generating capacity.
The U.S. Natural Gas Boom Is On Its Last Legs - Weak natural gas prices amid abundant supply and a falling rig count across the United States will slow down U.S. natural gas production growth this year, and some basins will even see production declines, analysts say. Due to the shale revolution, natural gas production in the U.S. has been growing rapidly over the past decade, and growth accelerated over the past two years. But now companies are struggling with negative cash flows as prices stay low, and investors are not rewarding production growth if they don’t have returns.The natural gas glut created from the continuously rising production amid insufficient pipeline takeaway capacity has been recently aggravated by the gushing associated gas in the oil wells in the Permian, where pipeline capacity is not nearly enough to accommodate additional natural gas volumes. Gas flaring has hit record highs as producers are unable to find any useful and reasonably cost-efficient application for that gas.Due to continuously rising U.S. natural gas production, natural gas prices at the U.S. benchmark Henry Hub averaged US$2.57 per million British thermal units (MMBtu) in 2019—the lowest annual average price since 2016.Lower prices and fewer rigs are expected to slow down U.S. natural gas production growth this year. Some regions in the Mid Continent could see declines in their gas production, according to estimates from S&P Global Platts Analytics. For example, the SCOOP/STACK play in Oklahoma saw its active rig count drop to a multi-year low of 23 this week, according to data from energy data analytics company Enverus cited by Platts. This year, gas production in the SCOOP/STACK is set to slow down to 3.2 Bcf/d, down from the 3.4 Bcf/d average production in 2019, according to S&P Global Platts Analytics. In the broader Midcon Producing region—including the SCOOP/STACK, Cleveland Tonkawa, Mississippi Lime, and Granite Wash plays—production in 2020 is set to average 6.6 Bcf/d, down from 6.8 Bcf/d in 2019, according to Platts Analytics’ forecasts based on the current rig count in the areas. In 2019, the Marcellus and Utica basins saw pipeline relief but “aggressive gains in production continued to surprise and caused renewed price weakness this past fall,” Enverus said. In the Permian, promising economics will continue to be challenged by pipeline capacity shortages, while Haynesville’s growth last year was likely limited to Tier 1 acreage, “which is the only area reliably in the money with a $2.13/MMBtu gas breakeven,” according to Enverus.
'Raging granny' faces music for pipeline protest: 'Happy that I did it' - Activist and self-identified “raging granny” Glenna “Duff” Benjamin traveled to Montgomery County in September to lock herself to a sideboom pipelayer and block construction of the Mountain Valley Pipeline for five hours. On Monday, she returned to face the consequences of her act of non-violent civil disobedience. The 76-year-old Benjamin pleaded not guilty to a charge of trespassing, but acknowledged the evidence against her would be enough to return a conviction. In return, she received a $200 fine that would be suspended on the conditions that she keep at least 100 yards away from the pipeline and its construction sites and that she not harass MVP employees or contractors. Four other related charges were held under advisement by General District Court Judge Gino Williams and will be dismissed in 12 months if Benjamin abides by the court’s conditions. “You understand I’m going to get to be the referee about what harassing is from here on out, as long as it’s within the jurisdiction of this court, OK?” Williams told Benjamin. “Do you understand that? I don’t want to cut you off from doing the things you’re legally allowed to do, but if there’s a question in your mind about what’s harassment, it would be a good idea not to do that.” Benjamin meekly acquiesced. But a few minutes later, as she walked out of the courtroom, she grinned like the cat that ate the canary. “I’m happy that I did it,” Benjamin told reporters outside the courtroom, as a crowd of pipeline protesters and supporters listened. Her lawyer, former Montgomery County supervisor Chris Tuck, added, “She doesn’t have any regrets. In channeling the teachings of Martin Luther King and his actions, she’s committed to nonviolent protest, and that’s what she did. She’s appreciative of the compassion the commonwealth’s attorney showed her in this case. She will continue to be a voice in protecting our environment and a cause she believes in with all of her heart.”
In Virginia, anti-pipeline activists feel ‘justice was served’ with court ruling -- The momentous decision by a three-judge panel from the Richmond-based 4th U.S. Circuit Court of Appeals is potentially a huge setback for Dominion Energy’s pipeline and a gargantuan gain for environmental justice in a state where that topic is only recently being broached. Union Hill, a tiny rural community in Buckingham County settled after the Civil War by free blacks and formerly enslaved people, has been tracked by pipeline opponents nationwide as a test case. It’s 70 miles west of Richmond. Chief Judge Roger Gregory of Virginia joined judges James Wynn Jr. of North Carolina and Stephanie Thacker of West Virginia in issuing the 47-page opinion. The judges basically reprimanded the seven-member board for following the Department of Environmental Quality’s lead and choosing to ignore reams of substantive evidence that petitioners had submitted about the pumping station’s impact on a vulnerable community. For instance, Dominion and the board didn’t acknowledge the community’s makeup as majority African American. Many of the residents are elderly and suffering from respiratory and heart ailments. As well, the board didn’t account for either the 60 homes within a mile of the 68.5-acre site for the compressor station or the impact of the noise and pollutants emitted during its construction and operation. Dominion claimed the wooded acreage near Rose’s house on Highway 56 was ideal for the compressor station because of a necessary connection to Transco, a separate and existing natural gas pipeline. The permit application stated that four turbines — with a combined 58,162 horsepower — would burn gas 24/7 to pump natural gas through the pipeline. The board failed to even consider replacing those turbines with technology such as electric motors, which would have eliminated the on-site air pollution.In the fall of 2018, the board opted to delay its vote on the compressor station permit because several members wanted more information on environmental justice issues. That November, Democratic Gov. Ralph Northam caused an uproar in anti-pipeline quarters when he replaced two board members who had voiced concerns about the disproportionate harm to Union Hill. The reconfigured board’s final vote for approval came in January 2019. “What matters is whether the Board has performed its statutory duty to determine whether this facility is suitable for this site, in light of EJ [environmental justice] and potential health risks for the people of Union Hill,” the judges wrote. “It has not.”
15 states oppose Trump plan to allow LNG shipments by rail (AP) — The attorneys general of 15 states said this week that they oppose a Trump administration proposal to allow rail shipments of liquefied natural gas, arguing the trains will share tracks with passenger trains and travel through congested areas. The protesting states included Pennsylvania and New Jersey, where the Trump administration issued a special permit in December to ship LNG by rail. The rulemaking by the U.S. Pipeline and Hazardous Material Safety Administration stems from Trump signing an executive order in April that, in addition to seeking to speed up oil and gas pipeline projects, directed the transportation secretary to propose a rule allowing liquefied natural gas to be shipped in approved rail tank cars. In their 18 pages of comments submitted Monday, the states said the Trump administration’s proposed rule would put residents, first responders and the environment at greater risk of catastrophic accidents. The administration failed to adequately analyze those risks and failed to consider the environmental and climate effects of allowing LNG to be shipped in rail tank cars, the states said. The flammable and odorless liquid would be transported “through densely populated areas, potentially in unit trains of up to 100 tank cars operated by just one person, on the same rail lines used by high speed passenger trains, with inadequate safety precautions,” the states said. They asked the pipeline administration to withdraw the proposed rule pending the completion of more safety studies and the development of an environmental impact statement. Federal hazardous materials regulations allow LNG shipments by truck, but not by rail, except for with a special permit. In December, the Trump administration issued a special permit to a New Fortress Energy subsidiary to ship LNG by rail from northern Pennsylvania’s Marcellus Shale natural gas fields to a yet-to-be-built storage terminal at a former explosives plant in New Jersey, along the Delaware River near Philadelphia. From there, the LNG would be exported to foreign markets. Monday was the deadline for comments to be filed. The other objecting states were California, Delaware, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington, as well as the District of Columbia.
9 Arrested In Latest Protest At Weymouth Compressor Plant — The protest groups Extinction Rebellion and 350 Mass Action are claiming nine more arrests Thursday in the latest in a series of demonstrations at a Weymouth natural gas compressor construction site. For the third time in the past two months, protestors blocked the entrance of the site of the 7,700-horsepower compressor construction site with ensuing arrests. The groups on Thursday took credit for delaying entrance to the plant for three hours. The nine arrests Thursday makes it 19 arrested for civil infractions since Dec. 5. "We thank these brave individuals for putting their bodies on the line to protect people and the planet from further climate destruction," the protest groups said in a joint statement. The groups are calling on Gov. Charlie Baker and the Department of Environmental to reconsider approval given to the project in light of fierce opposition from climate activists and some local officials. They cite what they call the "industrial environmental hazards" associated with the project with posing a danger for the densely populated coastal community with two schools and 3,100 students located within an mile of the compressor site. "Governor Baker and the agencies he oversees are responsible for protecting citizens from health risks and initiating real change to protect the environment. The fossil fuel industry will not voluntarily sacrifice its profits for the greater good," said Amanda Nash, a vocal member of the recent protests. "That industry has spent the last 30(-plus) years lying to the public about the severity of global heating and the industry's role in creating it. Governor Baker and the legislature need to stop acting on behalf of the fossil fuel companies and take drastic measures to protect our communities and ensure a livable future."On Dec. 5, protestors from the Fore River Residents Against the Compressor Station were out in force in Weymouth where they said about 30 protestors blocked the national gas compressor station entrance on Bridge Street. Four were arrested that day in what they called "an act of civil disobedience.Later that week, six more protestors from the group were arrested after they laid down in front of the gates of the station during an hours-long protest.
Weymouth councilors raise concerns over trucks at compressor site - — Town councilors want federal regulators to enforce a traffic plan after residents say crews working to excavate contaminated fill at the site of a planned natural-gas compressor station are not following agreed-upon routes and allowing hazardous materials to spread. Town Council President Arthur Mathews this week sent a letter to Kimberly Bose, secretary of the Federal Energy Regulatory Commission, outlining concerns of residents and officials regarding traffic at the compressor station site since crews have started remediation of hazardous materials at the Bridge Street site ahead of compressor station construction. The compressor station is being built by Algonquin, a subsidiary of Enbridge, and is part of the Atlantic Bridge project, which would expand the Houston company’s pipelines from New Jersey into Canada. Algonquin got the final go-ahead from the Federal Energy Regulatory Commission in November after a series of health, safety and environmental reviews. Mathews said contractors have not been following the traffic plan and using residential streets in Weymouth, rather than the designated route through Quincy and Braintree on Routes 53 and 18. Mathews said the council also wants to make sure the vehicles are properly washed prior to leaving the site. “This construction will come with the removal of approximately 11-18K tons of arsenic laden soil. Some levels of the arsenic are as much as 500% over the safe standards,” the letter reads. “There is also concern that the parcel contains asbestos as the entire peninsula has been filled with industry debris throughout the years. ... Given the significant health risks of asbestos, more thorough testing should be conducted in this regard prior to offloading these truckloads of contaminated soil.”
MAINE: Federal judges send pipeline fight back to state court -- Monday, January 13, 2020 -- A federal appeals court is seeking clarification on Maine state law in a legal dispute over whether a city can halt an oil infrastructure project.
Michigan seeks extensive records about underwater oil pipes (AP) — Michigan officials demanded an extensive set of records Monday from Enbridge Inc. in an investigation of the company’s oil pipeline that runs beneath a channel linking two of the Great Lakes. In a letter to the Canadian company, the state Department of Natural Resources requested documents dating back to 1953, when two 20-inch pipelines were placed across the bottom of the Straits of Mackinac. They are part of Line 5, which carries crude oil and natural gas liquids used in propane from Superior, Wisconsin, to Sarnia, Ontario. The straits connect Lakes Huron and Michigan. Gov. Gretchen Whitmer last June ordered a review of Enbridge’s compliance with an easement that set conditions for the company to place the pipelines on the Great Lakes bottomlands. The Democratic governor, who has echoed environmentalists’ concerns that the pipes are unsafe and could leak, said violations of the easement could justify an order to shut down the line. “The documents requested today from Enbridge will provide important information in the department’s continuing review” of the company’s performance, said Ed Golder, spokesman for the natural resources department. The Canadian company, based in Calgary, Alberta, issued a statement saying it had received the information request. Spokesman Michael Barnes said the company had no comment on how it would respond. The underwater pipeline segment “has been operating safely and reliably since it was constructed more than 60 years ago,” Enbridge said. In the letter, natural resources director Daniel Eichinger asked Enbridge to provide all company letters, emails, reports and other materials involving any spills or leaks from Line 5. He also requested documents involving gaps that have appeared beneath the pipelines and damage to the pipes’ outer coating, as well as curves that might have formed in the piping and strikes by ship anchors or other objects. The pipes were dented by an anchor dropped by a tugboat in April 2018, although Enbridge said they remained intact.
Opinion: Line 5 tunnel is a high-stakes gamble - Should Michigan allow a Canadian oil company to risk the Great Lakes for its own profit? A Line 5 oil tunnel in the Straits of Mackinac does that for Enbridge Energy. Pipeline Hazardous Materials Safety Administrator Skip Elliot said, “You will not find a more sensitive area anywhere in the United States” for an oil pipeline. Yet Enbridge pursues the shortest, most profitable route to its East Coast markets.At 66 years, Line 5 is damaged and needs replacement, so a new pipeline in a tunnel is planned. However, continued operation of old Line 5 while building the tunnel increases risk. A September accident left drilling equipment embedded in the lake bottom and leaning against Line 5, yet went unreported. This is the fateful beginning of the tunnel, which Enbridge says will “make a safe Line 5 even safer.”Drilling 100 feet into bedrock for an oil tunnel in such narrow confines as the Straits is unprecedented and risky. Doing it next to an aged pipeline carrying a million gallons of oil each hour is a high stakes gamble. Gov. Snyder’s lame duck deal stipulated Michigan will own the tunnel and lease it to Enbridge for 99 years. It allows Enbridge to back out. Unlike Michigan, Enbridge has almost nothing to lose and everything to gain from a tunnel that keeps oil flowing in the old pipeline until it is replaced in five years or more. Enbridge, backed by ExxonMobil and big oil, created the Moving Michigan Campaign to convince Michigan it needs a tunnel — when 90 percent of Line 5’s oil and 98 percent of its propane liquids go directly to Sarnia. Gov. Whitmer pledged to shut down Line 5 to protect the Great Lakes and Michigan’s economic future. Her UP Energy Task Force finds that the U.P. need for propane, like Michigan overall, isn’t dependent on Enbridge. She doesn’t believe a 99-year commitment to fossil fuels during a climate crisis is wise. An Oct. 29 study by American Risk Management shows Enbridge’s pledge to cover cleanup costs of a Line 5 spill is hollow because the parent company, Enbridge Incorporated, isn’t responsible for liabilities incurred by its subsidiary, Enbridge Energy. Michigan is left holding the bag. The tunnel represents an unacceptable and completely unnecessary risk. Michigan could lose more than money if Canadian oil keeps passing through the heart of the Great Lakes until the pipeline finally fails.
Appeals panel decision means Michigan must process Enbridge permits — A state Court of Appeals ruling Thursday reaffirmed Enbridge Energy’s right to move forward with plans for tunnel construction to house the controversial Line 5 oil pipeline beneath the Straits of Mackinac. In a brief 2-1 decision from the Court of Appeals, judges Michael Gadola and Patrick Meter denied Michigan Attorney General Dana Nessel’s request to stay a lower court opinion that overruled Nessel’s objections to the agreement that allowed for the tunnel construction. Appeals Judge Amy Ronayne Krause wrote she would have granted Nessel’s request, noting that arguments for and against the constitutionality of the tunnel agreement “seem very well-reasoned and a stay should be granted until the appeal on this issue in this court is resolved.” The appellate decision came after the Michigan Court of Claims in October ruled Enbridge Energy’s tunnel construction agreement with the state of Michigan — entered into under Republican former Gov. Rick Snyder — was valid. Nessel filed a brief Thursday with the Court of Appeals to reverse the decision, arguing the agreement was unconstitutional because it violated the title-object clause of the state Constitution and involved two unrelated objects: the tunnel and the Mackinac Bridge. Nessel's request would have temporarily halted the implementation of the Court of Claims opinion pending appeal. Without the stay, the agreement remains in effect, overruling Democratic Gov. Gretchen Whitmer’s March executive directive ordering agencies to stop processing permit applications for Enbridge. “If Enbridge applies for permits needed for the construction of the proposed tunnel, state agencies would have the responsibility to process the applications as provided by law; the potential unconstitutionality of Act 359 is not a basis at this time for declining to do so,” said Nessel spokeswoman Kelly Rossman-McKinney.
Hearings set on We Energies gas line project - Public hearings on a new 46-mile natural gas pipeline that will run from Whitewater in Walworth County to the Town of Paris in Kenosha County will take place in February. The hearings were triggered by the Thursday release of the final environmental impact statement, a 297-page analysis of the economic, social, cultural and environmental impacts that could result from the construction of the project, known as the Lakeshore Lateral Project. The report was prepared jointly by the state Public Service Commission, which is expected to make a determination on the project proposal by April, and the Wisconsin Department of Natural Resources. Two routes for the gas line were presented by We Energies, which designated the route that travels through Elkhorn, Burlington and Brighton as its preferred route. The route has been altered to reflect landowner requests at previous public hearings.
Chesapeake Energy is Drowning in Debt, Without a Life Raft in Sight - Chesapeake Energy is the very definition of a “dead man drilling.” The only reason to keep it alive is to try and pay off some of its roughly $9 billion in debt. This is working for its bankers, but not CHK stock investors. The other analogy that comes to mind is the dead parrot in the Monty Python sketch. You can argue all you like about whether the Oklahoma City-based oil and gas producer is resting, or perhaps pining for the fjords. But its situation is hopeless. The fact can be seen by looking at one number, its annual interest expense. In 2016 Chesapeake paid $286 million to service its loans, on revenue of nearly $7.9 billion. Last year it paid about $518 million. In 2020 it will pay nearly $700 million. Revenue is expected to remain under $10 billion.The company is the very definition of a “dead man drilling.” The only reason to keep it alive is to try and pay off some of its roughly $9 billion in debt. This is working for its bankers, but not its investors.Most have finally figured that out. The shares fell decisively under $1 each in November and open for trade this morning at about 68 cents each. Chesapeake Energy is the poster child for the latest boom-bust cycle in oil. Chesapeake came to prominence early in the last decade, under Aubrey McClendon, by fracking the Marcellus Shale, a formation in the Appalachian Mountains containing huge reserves of untapped natural gas. It later made investments in nearly all the other big plays of the decade, from Ohio to Colorado to Texas and its Permian Basin.McClendon himself died in a March 2016 traffic mishap, while under indictment for trying to rig auctions on oil and gas leases. The company has struggled without him, trying to pay down or put off the mountain of debt accumulated during its glory days.
Florida agrees to buy swath of Everglades to protect it from oil drilling - (Reuters) - The state of Florida has reached a deal with a private real estate firm to buy a large swath of environmentally sensitive wetlands in the heart of the Everglades to spare the tract from oil drilling, the governor announced on Wednesday. Florida’s agreement to purchase 20,000 acres (8,094 hectares) of land from Kanter Real Estate LLC, if consummated, would mark the largest wetlands acquisition by the state in a decade, Governor Ron DeSantis said in a statement. The deal was reached after a Florida appeals court last year sided against the state Environmental Protection Department’s bid to deny the Miami-based real estate company a permit to explore for oil on the land in question. The Kanter family agreed to sell the property for $16.5 million, but the price would jump to $18 million if the deal closes after June 30. Acquisition of the Kanter property would bring to nearly 600,000 acres (243,000 hectares) the amount of wetlands placed under permanent protection within a key Everglades conservation area set aside for environmental restoration and recreation, the state said.
New Enterprise Plant Begins Service at Mont Belvieu - Enterprise Products Partners L.P. reported Monday that its isobutane dehydrogenation (iBDH) plant near Mont Belvieu, Texas, recently began service, adding that volumes should continue ramping up during the next two weeks. “The completion of the new iBDH facility extends our butane value chain by allowing us to increase production of both high-purity and low-purity isobutylene to be used primarily as feedstock to manufacture lubricants, rubber products and fuel additives,” A.J. “Jim” Teague, CEO of Enterprise’s general partner, commented in a written statement. According to Enterprise, the new iBDH plant – supported by long-term, fee-based contracts – will ultimately be able to process approximately 25,000 barrels per day of butane into nearly 1 billion pounds per year of isobutylene. Enterprise stated that market demand is growing for isobutylene – a byproduct of ethylene production plants – amid increased use of low-cost, light-end feedstocks such as ethane rather than more expensive crude oil derivatives. The firm pointed out the iBDH facility will turn plentiful, cost-advantaged natural gas liquids into a higher-value product using the company’s integrated midstream network. “I would like to commend the performance of our construction contractor, Optimized Process Designs, and our employees whose expertise, diligence and more than 25 years of experience with the Oleflex technology allowed the project to be completed on-time and under-budget,” stated Teague. Teague added that Enterprise is applying the same technology and project execution strategy on the propane dehydrogenation plant (PDH) under construction at its Mont Belvieu complex. The PDH plant is slated for completion in the first half of 2023, he stated.
Company inspects former Pegasus Pipeline in county -Inspection and testing of the pipeline that ruptured and released 5,000 barrels of crude oil in a Mayflower subdivision in 2013 is underway in Garland County. Energy Transfer Partners, the owner of the 859-mile conduit formerly known as Pegasus Pipeline, informed Garland County last week that tests would be conducted Wednesday through Friday. The 20-inch pipeline's 648-mile northern segment from Pakota, Ill., to Corsicana, Texas, has been out of service since the oil spill. A digital map maintained by the Pipeline and Hazard Materials Safety Administration showed the pipeline, now called Permian Express, runs northeast to southwest across the county, crossing Highway 7 north between Jessieville and Blue Springs and Lake Hamilton near the Treasure Isle Road area. Its path takes it across numerous creeks and streams in the lake's watershed. "We are performing integrity tests to ascertain the status of the pipeline as it has been inactive since 2013," Amanda Gorgueiro, who works in Energy Transfer Partners' media and public relations department, said in an email. "As with all of our pipelines, these tests are performed per PHMSA regulations. The testing involved the use of a smart pig, which has magnetic sensors to examine the inside of the pipeline. "At this time, our primary focus is on performing the integrity of the pipeline per PHMSA regulations. All appropriate notifications have been made to landowners within the area." The Dallas-based energy services company acquired the pipeline in 2016 through a joint venture with Exxon Mobile. The latter's pipeline subsidiary owned and operated the Pegasus line when it ruptured. According to the accident report, a 22-foot section failed in the Conway-to-Jessieville segment, spilling 5,000 barrels of crude oil flowing from Illinois to Texas and causing $57.5 million in property damage. The report said it took 16 minutes from the time of detection to isolate the failure, with upstream and downstream valves closing off an 18-mile section. An estimated 2,000 barrels collected in ditches and a cove south of Lake Conway. The report said the pipeline is buried 2 feet underground. The northern section was manufactured and installed in 1947.
Pipeline responsible for Mayflower oil spill being inspected - — The Permian Express pipeline, formerly known as Pegasus, that spilled half a million gallons of crude oil in Mayflower in 2013 is being inspected. According to its new owner, Energy Transfer, they are going through the over 600 miles of pipeline testing out its integrity. They're doing so by way of a "smart pig" which is a device that has magnetic sensors to examine the inside of the pipeline. Energy Transfer didn't disclose why they are conducting this inspection or if there are any future plans with this pipeline, but if it does get back online at some point, Central Arkansas Water has some concerns considering it runs right along Lake Maumelle. "Oil and water don't mix, and that pipeline runs through several watersheds just in Arkansas alone. Ours just happens to be the largest drinking water reservoir in the state," said Doug Shackelford, director of public affairs for Central Arkansas Water. The pipeline also runs straight through Garland County. Its judge, Darryl Mahoney, never thought he'd see that pipeline working again, saying, "I really didn't after the event in Mayflower, just an assumption on my part, I just assumed they would never charge it again because it caused so many problems in Mayflower and I'm sure they're not through there yet." Mahoney says his main concern is the safety of the county residents especially since the pipeline was originally constructed in the 1950s. "Although there are probably pipelines running everywhere right now that never have a problem, we don't want to have that problem here at all or any part of the state of Arkansas for that matter," he said. Both parties plan to request the findings from Energy Transfer once they have completed the inspection. In the event of a spill, Central Arkansas Water says they have an extensive plan in place to try to limit the damage. Garland County is in the process of working with their emergency management department to create one as well.
The battle over pipelines, population and property rights in Texas’ Hill Country - Hershey Ranch covers 1,565 acres and is the largest protected property in Gillespie County, located west of Austin and in the heart of Hill Country. Samson and his wife, Nona—both in their seventies—split their days between Austin and the ranch, where they have devoted much of their time since 2011 when Andy Samson inherited the property as a life estate. They work on restoring the native habitat at least five hours a day, three or four days a week. Samson wishes he could put in longer hours, but Texas heat is a limiting factor. The Samsons spent years stewarding and restoring their land. But this month, Hershey Ranch could face an upheaval: bulldozers would clear a 150-feet-wide path, ripping out trees to make room for a 42-inch natural gas pipeline. It started a year ago, in October, when the couple received a letter from Kinder Morgan, one of the largest oil and gas infrastructure companies in the United States. The two-page memo dropped a bombshell: the company planned to build a 432-mile pipeline, stretching all the way from the Permian Basin in West Texas to the Gulf Coast. The pipe would cut straight across Hill Country, Hershey Ranch included. It would snake under rivers and highways, cut across ranches, and burrow near houses and future developments. The Samsons are among roughly 30,000 landowners within three miles of the proposed route. In the letter, Kinder Morgan asked landowners for permission to set foot on their property to survey the land. But the company didn't need permission: they needed to submit a four page application to the Texas Railroad Commission (RRC), who would then grant them the power of eminent domain.
Kinder Morgan mobilizes for pipeline construction in Central Texas; opponents prepare to sue --After more than a year of community meetings, negotiations, resolutions and legal action, the pipeline company Kinder Morgan is getting ready to begin construction on the Permian Highway Pipeline in Central Texas—at least if legal challenges do not stop it.Work has already begun on the westernmost section of the 430-mile, $2 billion natural gas conduit, which stretches from the Permian Basin to the Gulf Coast, nearly bisecting Hays County. But in the Central Texas area, the company is waiting for the U.S. Army Corps of Engineers and the U.S. Fish & Wildlife Service to issue required permits.It is what happens with those permits that will most likely determine how soon Kinder Morgan can break ground. The permit issue is at the heart of two letters of intent to sue—required before filing a lawsuit against a federal agency—filed in the last six months to try to force Kinder Morgan to perform a full and public environmental review.The first letter, filed with the U.S. District Court on July 17, focused on the impacts of the pipeline on the golden-cheeked warbler; the second, filed Oct. 16, focuses on aquifer-based species such as salamanders. Hays County and the Travis Audubon Society signed onto the July letter, while plaintiffs in the second included Austin, San Marcos and Kyle, in addition to Hays County. Both letters charge that the Permian Highway Pipeline passes through endangered species habitat and that the company is trying to avoid rigorous environmental review by seeking a general nationwide permit from the Corps, which would not require it.
Valley Crossing maintenance could pressure Texas exports, prices — Maintenance on Valley Crossing Pipeline will begin restricting all receipts and deliveries on the intrastate pipeline beginning later this week, potentially putting downward pressure on South Texas gas exports and prices. From January 16 to January 22, the planned maintenance on Valley Crossing will halt shipments along the Nueces Header and Brownsville portions of the pipeline, according to a recent critical notice posted by operator Enbridge. On January 3, a similar maintenance event also halted transmissions on Valley Crossing, resulting in a steep decline in volumes delivered to Mexico from the Sur de Texas-Tuxpan cross-border pipeline. During its single-day duration, exports on Sur de Texas fell to just 130 MMcf – a decline of nearly 400 MMcf/d and the lowest daily transmission volume on the pipeline since it entered service in September. A nearly commensurate increase in exports on NET Mexico at the time of the maintenance helped to backfill for the drop on Sur de Texas, with no appreciable impact on South Texas gas exports or prices, S&P Global Platts data shows. The longer, seven-day duration to the upcoming maintenance event, though, could test NET Mexico's capacity to backfill for the Sur de Texas decline. In that case, cash prices at Texas Eastern STX and locations as far north as Houston Ship Channel could come under downward pressure as stranded supply pushes it way back into the Texas market. After entering service in February 2019, shippers on Valley Cross waited over seven months to deliver export volumes to Mexico on Sur de Texas amid construction delays and an extended contractual setback. The Valley Crossing and Sur de Texas pipelines combined have enabled shippers in Texas to significantly boost exports to points south of the border. In the fourth quarter, Texas exports to Mexico averaged nearly 4.6 Bcf/d – about 600 MMcf/d or 15% higher compared to the year-ago period. In January, outflows from Texas have averaged just over 4.4 Bcf/d, having come under downward pressure earlier this month when the extended holiday period kept Mexico's gas demand to a minimum.
U.S. Sees Most Available Oil And Natural Gas In History - Recent data shows that the U.S. had more minable oil and natural gas reserves than ever before. “Proved” oil and gas reserves are the amount that drillers could get out of the ground affordably and with current technology. The U.S. Energy Information Administration found that in 2018, those reserves reached historic peaks. After decades of decline starting in the 70s, the advent of fracking in the mid-2000’s boosted the amount of oil and gas we could get leading to these recent highs. Peter Maniloff, an assistant professor of economics at the Colorado School of Mines, says more reserves may mean more employment in oil and gas states, but, “There’s the saying that the stone age didn’t end because they ran out of stones. We have vast quantities of fossil fuels in the ground. If we’re going to address climate change, then we’re going to have to leave some of them in the ground.” He says there also isn’t a guarantee that oil and gas industries will out-perform increasingly cheap renewable energies and electric vehicles. Mountain West oil and gas reserves were mixed. Natural gas reserves decreased between 2017 and 2018 in Montana, Wyoming, Idaho, Utah and Colorado. Meanwhile oil reserves in Wyoming, Colorado and Utah all went up.
Experts Insist Permian Output is Approaching a Peak - -- Such is the extent of the shakeout in the U.S. shale industry that Permian Basin oil production is closer to peaking than many forecasts suggest, according to one energy investor. Adam Waterous, who runs Waterous Energy Fund, regards the sector’s financial position as unsustainable after years of disappointing returns for investors and negative free cash flow. With capital markets now largely shunning shale producers, the impact will begin to show in oil and natural gas output from the largest U.S. oil patch, he said. “We think we are at or near peak Permian” production, Waterous said last week in an interview. “The North American oil market has been grossly overcapitalized, which is not sustainable.” Predicting peak Permian output for 2020 isn’t a mainstream view. There’s plenty of debate about how much production growth in the West Texas and New Mexico patch may slow this year as shale drillers slash capital spending, but the consensus is that supplies will rise, albeit at a slower pace. Tai Liu, an analyst at BloombergNEF, said in a report Tuesday that the pessimism may be overdone. Such considerations have global ramifications, as the U.S. is expected to account for a large portion of worldwide supply growth this year. As head of investment banking at Bank of Nova Scotia, Waterous had a direct hand in mergers and acquisitions that reshaped the energy sector. But he says the model those deals represented, one in which oil and gas companies prioritized production gains and M&A, is now a relic. “The capital gains model is broken,” he said. “The M&A market is gone and it’s not coming back.” The kind of industry rationalization Waterous describes may work to his advantage. His Calgary-based private equity firm, which he founded in 2017, controls two Canadian oil producers. One of them, Cona Resources Ltd., agreed to buy Pengrowth Energy Corp. in November for C$28 million ($21 million) after Pengrowth’s share price cratered as the company buckled under a huge debt load. Waterous Energy is looking for more assets in Canada and the U.S. Waterous likens the plight of U.S. shale in recent years to the five stages of grief. The first stage, denial, is characterized by a belief that the M&A market will return, he said. That’s followed by anger (“the market is wrong”), then bargaining, by trying to operate within cash flow, followed by depression -- moving to the free cash-flow model that many shale operators have been touting. The final stage, acceptance, is defined by Waterous as the industry finally resolving to provide investors with cash payouts via dividends so that they recover their initial investments.
Trump Admin Ordered ‘Climate Censorship’ in Plans to Lease Texas Public Lands for Fossil Fuel Extraction - An environmental group has uncovered another case of "climate censorship" ordered by the Trump administration. Administration officials had references to the climate crisis removed from a Forest Service notice of intent (NOI) to prepare an environmental impact statement on opening national forests and grasslands in Texas to oil and gas leasing. "The Deputy who is reviewing the NOI requested every reference to 'climate' and 'greenhouse gasses' be removed. We did," Robert Potts, the Forest Service's natural resources and planning team leader in Lufkin, Texas, wrote in a July 25 email obtained by environmental group the Center for Biological Diversity (CBD). CBD obtained the email through a Freedom of Information Act request after it noticed something strange about two different versions of the NOI posted in the Federal Register, E&E News reported Wednesday. The first, posted Aug. 26, mentioned climate change and greenhouse gases. The second, which replaced it the next day, did not. "This is another example of climate censorship that we've been seeing as a pattern under the Trump administration," CBD senior public lands campaigner Taylor McKinnon told the Houston Chronicle/ The drilling plans concern areas of the Sam Houston National Forest, Davy Crockett National Forest, Angelina National Forest, Sabine National Forest, Caddo National Grasslands and LBJ National Grasslands, which are parts of the Haynesville and Barnett shales. The Obama administration barred new oil and gas leasing on the lands in 2016 over concerns about the health and environmental impacts of fracking. The Trump administration is now looking to open them to new leasing once again and is working to supplement the last oil and gas analysis of the area, which was conducted in the 1990s, according to E&E News.
Texas’ Biggest Oil And Gas Industry Group Accepts Role In Climate Change – The head of the Texas Oil and Gas Association said Tuesday that his industry group agrees fossil fuels contribute to global warming but industry will find ways to reduce emissions.“I think Texas is at risk if we don’t have a very real, factual-based conversation about our climate, about our environment, and about the progress that needs to be made,” Todd Staples, president of TXOGA, said in a media conference call. “I think Texas-based oil and natural gas companies are committed to making climate progress. They’re committed to a lower emissions future.”Scientists have said for more than a century that emitting carbon dioxide by burning fossil fuels heats up Earth’s atmosphere. But, until recently, industry representatives and their political allies have avoided acknowledging the link publically.Before taking over at TXOGA, Staples was Texas’ agriculture commissioner. He was among a group that sued the EPA in 2010 to stop it from regulating greenhouse gas emissions, claiming the rules were based on “fabricated science.”Staples said his comments Tuesday were “fairly consistent” with other statements he’s made recently. But while he has addressed methane emissions and climate in the past, the remarks appear to be his most unambiguous linking oil and gas to global warming.But that doesn’t mean his group will support regulation to curb emissions.Since arriving at TXOGA, Staples has criticized the Paris climate agreement, EPA methane reduction rules and local efforts to combat warming like a plan adopted last year in San Antonio.The comments come amid a public relations push from the American Petroleum Institute, the country’s largest oil and gas lobby, to paint the industry as a proactive force in the fight against climate change.The goal seems to be to highlight innovations like carbon capture technology to argue fossil fuels should remain a major energy source in a decarbonized economy. That rebranding has been described as “embarrassing” by environmental groups.
Texas oil and gas industry could see a major slowdown in 2020 - The oil and natural gas industry paid a record-setting $16.3 billion in taxes and royalties to local governments and the state in 2019, the Texas Oil and Gas Association announced Tuesday. It is the highest sum since the 100-year-old association began tracking payments in 2007 — an indicator of the historic nature of the oil and gas boom that's gripped the state in recent years. The frenzy has driven U.S. fossil fuel production — and exports — to record levels. But the announcement comes as the industry appears on the precipice of a major slowdown as high production rates, softened global demand and a host of other economic and political factors have shifted the calculus. While fossil fuel production continued to rise in Texas in 2019, major cracks emerged in the latter half of the year: a significant drop in the number of active oil rigs, thousands of industry job losses and a spate of bankruptcies. Some analysts have said that already modest oil prices could drop below a key level of $50-per-barrel, which would deal a further blow. Texas Oil and Gas Association President Todd Staples said on Tuesday to expect more of the same in 2020. "With production strained by prices, we may have additional bankruptcies and mergers and acquisitions as companies work to maintain a competitive [advantage]," Staples said during a conference call with reporters. "Job growth may continue to lag further than we’ve enjoyed in recent years." Aside from more industry-specific pressures, Staples said there's "no question the trade war with China has put a strain on U.S. natural gas producers." The announcement of a final trade deal, he said, was "welcome news." Citing the tax and royalty figures released Tuesday, which are broken down in a report that emphasizes support for K-12 and higher education, Staples repeatedly emphasized that fossil fuel production, transport and processing remain a crucial factor in the state's economic well-being. At the same time, Staples openly acknowledged that manmade climate change is a threat and said the industry is "absolutely committed to climate progress" — definitive comments that would have been unheard of just a few years ago. "We believe that all emissions contribute to climate change and we believe that our industry is committed to doing our part to make improvements," he said.
Tallgrass/Rockies Express's Recontracting Efforts for Rockies Gas Flows - Tallgrass Energy’s Rockies Express Pipeline (REX) has been through a lot in its 10-plus years of operation. Since its first eastbound-only segments started moving natural gas out of the Rockies in 2008, flows on the pipeline have evolved due to market events, primarily the onset of the Shale Revolution, which has resulted in a surge of gas supplies in the Eastern U.S. and increasing gas-on-gas competition across North America. Rising to the challenge, REX has undergone a number of transformations to adapt to the shifting gas flow patterns and price relationships, including reversing flows on the eastern zone of the pipe to move gas west from Ohio. In 2019, REX was again put to the test, this time on the western end of the pipe, where the bulk of its legacy long-term contracts for eastbound flows out of the Rockies expired, with the last of them rolling off on November 11, 2019. Some of that has since been recontracted, and the in-service of the REX Cheyenne Hub Enhancement and Cheyenne Connector projects could further shore up REX mainline flows. Today, we begin a short series providing an update on REX’s eastbound gas flows and contract changes. You could say REX is the Madonna of gas pipelines. The Queen of Pop’s four-decades-long (and still going) career has been attributed to her habit of constantly reinventing herself. Similarly, REX’s long-term success has depended on its ability to morph, particularly given the rapid-fire changes that have buffeted the gas market over the past decade, all driven by the dramatic effect the Shale Revolution has had on the geographic distribution — and sheer volume — of gas supply across the Lower 48. The large-diameter, long-haul pipeline is now a robust bidirectional cross-country system that behaves like a massive header system for interregional flows. But it didn’t start out that way. As we’ve recounted many times in the RBN blogosphere (see Get Back to Where You Once Belonged, Walking Talland Big Deal! for a few of those instances), REX began as a much-needed outlet for surplus Rockies gas supply, initially only extending east to delivery points in the Midcontinent and terminating at the Panhandle Eastern Pipe Line (PEPL) interconnect in northeastern Missouri (blue dot on Figure 1 map). But by November 2009, the easternmost section was completed, allowing REX to flow as much as 1.8 Bcf/d all the way east to Clarington, OH (lavender dot to the right), for further delivery into the Northeast’s premium consuming markets along the Atlantic seaboard. This eastern section of REX — or Zone 3 (aqua line) — added more than 15 interconnects with other interstate pipelines running generally perpendicular to REX and feeding Midwestern and Eastern markets plus a number of local utilities in Illinois, Indiana and Ohio. This all made sense at a time when Rockies natural gas producers were looking to sell into the Eastern U.S., and when the Northeast region — the biggest heating demand region in the U.S., then and now — had little local supply of its own to help balance its consumption.
Emails Reveal U.S. Justice Dept. Working Closely with Oil Industry to Oppose Climate Lawsuits In early 2018, a few months after the cities of Oakland and San Francisco sued several major oil companies over climate change, attorneys with the U.S. Department of Justice began a series of email exchanges and meetings with lawyers for the oil companies targeted in the litigation. At one point, Eric Grant, a deputy assistant attorney general in the Justice Department's Environment and Natural Resources Division, sent an email to Indiana's solicitor general saying that his "boss" had asked him to set up a meeting to go over a plan for the government to intercede in the cases on the companies' behalf. The cities were arguing that oil companies should be held liable for catastrophic flooding, sea-level rise and other harmful consequences caused by climate change. The DOJ was preparing an amicus brief in support of the industry, and the Indiana solicitor general was leading the charge by Republican attorneys general from 15 states to also file a court brief supporting the industry. In another email, an assistant U.S. attorney general referred to the DOJ attorneys and industry lawyers—many of them former DOJ environmental lawyers—as a "team." The messages were among 178 pages of emails exchanged by government and industry from February through May 2018 as they worked together to oppose the cities' lawsuits. They were obtained by the Natural Resources Defense Council (NRDC) under a federal Freedom of Information Act request and shared with InsideClimate News.
Trump Moves to Limit Environmental Reviews, Erase Climate Change from NEPA Considerations - President Donald Trump on Thursday proposed sharply limiting environmental reviews of pipelines and other major federally permitted infrastructure projects, a move that would sweep away a hurdle slowing his agenda for unfettered fossil fuel development. The new guidance would curb federal agencies from considering climate impacts by specifying that agencies are only required to analyze impacts that are immediate, local and direct. The administration's proposed rule, which will be open for public comment before being finalized, also would relieve agencies of any duty to consider cumulative environmental impacts. "Many of America's most critical infrastructure projects have been tied up and bogged down by an outrageously burdensome federal approval process," Trump said in an address from the Roosevelt Room of the White House. "From day one, my administration has made fixing this regulatory nightmare a top priority. For the first time in 40 years, we're going to completely overhaul the dysfunctional bureaucratic system that has created these massive obstructions." The move to overhaul implementation rules for the National Environmental Policy Act (NEPA), which marked its 50th anniversary on Jan. 1, was portrayed by Trump as a modernization. But critics argue that the president is proposing changes that would undermine the bedrock environmental protection law, which establishes the duty of the federal government to act "as trustee of the environment for succeeding generations." They vowed to fight the effort. "While our world is burning, President Trump is adding fuel to the fire by taking away our right to be informed and to protect ourselves from irreparable harm," said Gina McCarthy, the new president and CEO of the Natural Resources Defense Council (NRDC). McCarthy, who served as administrator of the Environmental Protection Agency in the Obama administration, added: "We will use every tool in our toolbox to stop this dangerous move and safeguard our children's future." Flanked by men in hard hats and orange construction vests, industry officials and members of his economic team, Trump stressed his aim to speed the building of highways, roads and bridges. But the NEPA impact that has proved most nettlesome to the administration has been stalling the oil and gas pipelines and coal leasing Trump's administration has sought to push. Trump's move follows a series of federal court rulings that have stymied his efforts to spur fossil fuel projects—most notably the high-profile Keystone XL pipeline to expand U.S. imports of carbon-intensive Canadian tar sands oil. Trump had signed an executive order within days of taking office to reverse President Barack Obama's decision to halt the project over climate concerns. But Keystone XL has been tied up in litigation since then, with a federal judge ruling last August that federal agencies "cannot escape their responsibility" to evaluate alternatives under NEPA.
Revealed: US listed climate activist group as ‘extremists’ alongside mass killers - A group of US environmental activists engaged in non-violent civil disobedience targeting the oil industry have been listed in internal Department of Homeland Security documents as “extremists” and some of its members listed alongside white nationalists and mass killers, documents obtained by the Guardian reveal. The group have been dubbed the Valve Turners, after closing the valves on pipelines in four states carrying crude oil from Canada’s tar sands on 11 October 2016 which accounted for about 15% of US daily consumption. It was described as the largest coordinated action of its kind and for a few hours the oil stopped flowing. The five climate activists, members of Climate Direct Action, cut their way through fencing and turned the valves. The activists notified the energy companies whose pipelines were being disrupted and posted videos of their protest online and waited patiently to be arrested. They have since been dubbed the “Valve Turners”, profiled in the New York Times magazine and featured in a recent documentary titled The Reluctant Radical. Their trials have also tested the willingness of courts to allow climate activists to make use of the necessity defense – the idea that a criminal action is justified if it helps to prevent greater future harm – as part of a legal strategy. But the group’s actions attracted the attention of the DHS. In a recent intelligence bulletin evaluating domestic terrorism threats between 2018 and 2020, the department included the Valve Turners and described the group as “suspected environmental rights extremists”. The document also listed two of the group’s members alongside violent white supremacists and other extremists who have engaged in mass killings, including the man behind the racist 2015 slaying of nine black churchgoers in Charleston, South Carolina.
Two separate oil spills confirmed in North Dakota - State environmental officials say a spill of oilfield wastewater caused by a faulty valve has affected some pastureland in western North Dakota. The state Department of Environmental Quality said the 12,180-gallon produced water spill happened on Saturday at a well pad about 14 miles east of Watford City. State environmental scientist Bill Suess said only about 168 gallons of produced water escaped the well site. He said about 800 square feet of pastureland was affected. He said no water sources were harmed. Another pipeline spill of oilfield wastewater has affected cropland in northwestern North Dakota. State environmental scientist Bill Suess said regulators were notified Monday of the 8,400 gallon pipeline leak in Renville County. The pipeline is operated by Wichita Falls, Texas-based Cobra Oil and Gas. The spill of produced water happened 2 miles north of Sherwood, and within a 1 mile of the U.S.-Canada border. About 1,000 square feet of cropland was affected.
Faulty valve blamed for North Dakota oil wastewater spill (AP) — State environmental officials say a spill of oilfield wastewater caused by a faulty valve has affected some pastureland in western North Dakota. The North Dakota Department of Environmental Quality said the 12,180-gallon (46,000 liters) produced water spill happened on Saturday at a well pad about 14 miles (22.5 kilometers) east of Watford City. Minot-based Landtech Enterprises notified regulators of the spill on Monday. State environmental scientist Bill Suess said only about 168 gallons (635 liters) of produced water escaped the well site. He said about 800 square feet (74 square meters) of pastureland was affected. He said no water sources were harmed. Produced water is a mixture of saltwater and oil that can contain drilling chemicals. It’s a byproduct of oil and gas development. Suess said a berm around the well site contained most of the spill but some escaped through a gate at the facility.
Hydraulic oil spill occurs near Williston - minotdailynews– A failed seal on a water heater unit caused the release of 30 gallons of hydraulic oil at a site 7 miles northeast of Williston on Sunday. The spill occurred while Zavanna, LLC was pumping water from the Little Muddy River to use for enhanced oil recovery. The North Dakota Department of Environmental Quality (NDDEQ) was notified of the spill on Tuesday. Zavanna estimates about 10 gallons were recovered. The remainder of the oil dispersed on the ice of the Little Muddy River, with an estimated 5 gallons released into the river. Personnel from the NDDEQ have inspected the site and will continue to monitor the investigation and remediation.
Oil spill reported in Williams County - A 30-gallon release of hydraulic oil in was reported in Williams County. The spill occurred while Zavanna, LLC was pumping water from the Little Muddy River to use for enhanced oil recovery. The incident took place about 7 miles northeast of Williston on January 12 and was reported to the North Dakota Department of Environmental Quality two days later. The cause of the spill was a failed seal on a water heater unit. To date, 10 gallons have been recovered. The remaining oil spill onto ice along the Little Muddy River, with an estimated 5 gallons spilled into the river. NDDEQ has inspected the site and will continue to monitor the investigation and remediation.
Pipeline fights class certification in California oil spill suit (CN) – A company responsible for an oil spill that dumped more than 123,000 gallons of crude oil off the California coast in 2015 asked a judge Monday to decertify a federal class action brought by beachfront property owners and business owners seeking damages from the environmental disaster. On May 19, 2015, thousands of gallons of crude oil flowed into the Pacific Ocean along the Gaviota Coast north of Santa Barbara. The ruptured pipeline, owned by Texas-based Plains All American Pipeline, spewed oil through a storm drain under Highway 101 and into the ocean for several hours. The disaster forced the closure of multiple state marine conservation areas and public beaches as well as fishing and shellfish businesses. Plaintiffs in the ensuing class action include property owners, seafood suppliers, a petrol company that suffered lost wages and an international trading company that were impacted by the disaster. They claim Plains All American Pipeline should have had a shut-off valve on its 10-mile long, 24-inch wide pipeline. On Monday, attorneys for Plains All American Pipeline argued an analysis by class witness Igor Mezić, a University of California, Santa Barbara, professor, on the dispersion of crude oil is inaccurate. Mezić’s analysis involves the amount of oil that washed ashore after the disaster, what areas it covered and where it became submerged on the ocean floor. The pipeline’s attorney Daniel Levin with Munger Tolles Olson called Mezić’s findings “a “methodological failure” because he didn’t include important data points in his analysis, like the amount of oil that was cleaned up from specific sites. But class attorney Leila Noel with Cappello Noel said Mezić’s formula was peer-reviewed and while some sites may have been cleaned, oil residues remained. The defense seeks to decertify the class because the amount of oil found on the affected properties varies from property owner to property owner, and the case should therefore be handled individually rather than as a class action. Levin said there are multiple variables related to lessees and owners, those with property easement that goes to the beach from further inland and other individualized claims for damages from each class member. “You can’t do it with a class,” Levin told U.S. District Judge Philip Gutierrez. For the plaintiffs, Robert Nelson with Lieff Cabraser Heimann Bernstein said the class has already been narrowed down once before by Gutierrez to deal with the common questions. Nelson said the class attorneys have expert analysis on where the oil went and who was affected. Nelson also noted conventional use of the beaches was affected – a wrongful occupation and therefore a cost to the property owners.
Green groups sue Trump administration over California fracking plans analysis - Environmental groups sued the Trump administration Tuesday over its fracking plans in California, arguing that a federal analysis it adopted didn't adequately review "serious environmental and health impacts." The lawsuit filed Tuesday on behalf of the Center for Biological Diversity, the Sierra Club and others accuses the Bureau of Land Management (BLM) of opening public lands "to harmful oil and gas leasing and development, in violation of the National Environmental Policy Act (NEPA)." It seeks to prevent the agency from carrying out oil and gas leasing under a 2014 resource management plan "pending compliance with NEPA." The groups argue that the analysis adopted by BLM's Bakersfield, Calif., office "unlawfully minimizes the number of wells predicted to be fracked on new leases, and fails to adequately analyze the impacts of fracked wells on existing leases, leading to an underestimation of the impacts to air quality, climate, water quantity and quality, human health and safety, recreational uses, national park units and other public lands, and seismicity." A BLM spokeswoman said in a statement that the agency "will be reviewing" the lawsuit. "The BLM’s supplemental analysis on hydraulic fracturing did not make any new public lands or Federal minerals available to oil and gas development, nor did it issue any new leases or approve any permits to drill. If proposed, those actions and the potential impacts would be addressed at the site or project-specific level in subsequent tiered environmental analysis," the statement read. Michelle Ghafar, one of the lawyers on the case, said in a statement that BLM was choosing the oil industry over health and safety. "We’re returning to court once again to ensure the agency properly analyzes the impacts of devastating fracking activities in its plan,” Ghafar said. The Trump administration also announced last year that it would open up 725,000 acres in California to oil and gas lease sales, ending a five-year pause. That decision is facing a court challenge.
Democratic debate: the best case for and against a fracking ban – Vox - In the Democratic presidential debate on Tuesday, Minnesota Sen. Amy Klobuchar was asked why she hasn’t called for a ban on hydraulic fracturing of oil and natural gas like some of the other candidates.“I actually see natural gas as a transition fuel,” Klobuchar said. “It’s a transition fuel to where we get to carbon neutral.” But Vermont Sen. Bernie Sanders, who has called for a ban on hydraulic fracturing, aka fracking, argued that the harms to the climate outweigh the benefits. “If we as a nation do not transform our energy system away from fossil fuel ... the planet we are leaving our kids will be uninhabitable and unhealthy,” he said.Most of the Democratic presidential contenders agree that the United States should zero out its greenhouse gas emissions by 2050 while helping the workers and communities that may suffer job losses in the switch to clean energy. But candidates differ on some of the details, and the role of fracking in the fight against climate change is a key point of contention. Activists have pushed the candidates to address fracking — which involves pumping high pressure water, sand, and other chemicals into a rock formation to create fractures that can release trapped oil and gas — because it has radically reshaped the US economic, energy, political, and environmental landscape. It’s turned the United States into the largest oil producer in the world. It helped pull the country out of a recession. It’s created boomtowns flush with cash in once sparsely populated parts of the country. At the same time, fracking has led to a reduction in greenhouse gas emissions in the US. Wastewater injection from fracking wells has also caused a spike in earthquakes. It has caused local air quality and safety problems. And while they’re cleaner than coal, oil and gas from fracking are still fossil fuels. For policymakers, the difficult choice is deciding whether the benefits outweigh the harm, and if fuels from fracking can be a stepping stone toward cleaner energy. “
Fracking ban warranted to protect some of British Columbia’s biggest dams, FOI documents reveal - Fracking should be immediately banned close to BC Hydro’s two existing Peace River dams as well as the Site C dam construction project until a full public inquiry determines whether a comprehensive ban is warranted, the BC office of the Canadian Centre for Policy Alternatives says. The CCPA issued the call today after reviewing hundreds of documents obtained through a Freedom of Information (FOI) request, which shows that BC Hydro’s Peace Canyon Dam could fail in the aftermath of an earthquake triggered by fracking operations. “Allowing natural gas industry fracking and disposal well operations to occur anywhere near these dams is lunacy and that includes Site C,” says Dave Unger, a former BC Hydro construction manager who oversaw $350 million in refurbishment projects at the Peace Canyon and W.A.C. Bennett dams in 2007, and who is speaking out publicly for the first time about his concerns. “There should be outright bans on activities that could trigger earthquakes near the region’s dams, otherwise we may reach a dangerous tipping point where one of these dams fails,” he said. Unger personally experienced three “felt events” while working at the Peace Canyon Dam in 2007—events that coincided with encroaching natural gas drilling operations. In November 2018, the second-largest fracking-induced earthquake in BC was triggered at a fracking operation 20 kilometres from the Site C project, resulting in a “strong jolt” at the site. Ben Parfitt, CCPA resource policy analyst who filed the FOI request, says while the risk of a dam failure may be remote, the FOI documents indicate that it could happen with potentially deadly consequences for residents and workers downstream. “We need an immediate ban on fracking within 10 kilometres of the Peace River from the W.A.C. Bennett to Site C dams, and strict limits on fracking for 15 ki lometres beyond that unless a neutral body of experts rules there is no possibility for induced earthquakes,” Parfitt said. “Then the BC government must do the right thing and launch a full public inquiry into whether fracking is acceptable in any form whatsoever in the Peace River region given the known risks.”
Canada Faces A New Oil Price ‘’Blowout’’ --Prices for heavy crude in Canada have fallen to $36.66 per barrel, once again coming under pressure because of limits on pipeline capacity. Western Canada Select (WCS) typically trades at a discount relative to WTI, due to quality differences and because of the long-distance it needs to travel. But the discount tends to increase – or, put another way, the price of WCS tends to drop – when oil producers run into pipeline bottlenecks. In severe cases, such as late 2018, there is a “blowout” in the price differential between WCS and WTI, which can be interpreted as a kind of glut of oil trapped in Alberta.Last year, Alberta put mandatory cuts into place to rescue WCS prices, which had dropped as low as $13 per barrel in late 2018, which meant that it was trading roughly $50 per barrel below WTI. The cuts the provincial government put into place helped to rescue WCS prices almost immediately.Fast-forward to early 2020 and WCS is once again trading at much lower levels compared to the U.S. benchmark.“Canadian crude failed to participate in the relatively constant price increase since October, remaining largely below $40 per barrel,” JBC Energy said in a note on Friday. WCS prices have been trading at a discount relative to WTI of about $23 per barrel so far in 2020, which is a larger discount than was seen even after the Keystone pipeline leaked a few months ago.WCS is now trading at its widest discount since December 2018, the month just before Alberta’s mandatory production cuts went into effect. “The suppressed prices are coming on the back of strengthened supply, in particular of heavy crude amid upgrader maintenance,” JBC added. Oil sands production was up 80,000 bpd in November, compared to the same month a year earlier. “Furthermore, Albertan stock levels jumped to 74 million barrels in November, within grasp of the all-time highs seen in 2018 and earlier last year,” JBC Energy said. The surge in inventories is also the result of the Keystone pipeline leak, which kept the pipeline offline for a period of time and resulted in Canadian oil exports falling by 500,000 bpd in November.
Norway Suffers Setback In Quest For Arctic Oil Discoveries - One of the most active companies on the Norwegian Continental Shelf, Lundin Petroleum, said on Monday that it had revised downwards its resource estimate for a recent discovery in the Barents Sea, and that it no longer considers that a stand-alone development would be commercial.Although Lundin Petroleum reported overall increased reserves and contingent resources as of December 31, 2019, its estimate for the Alta discovery in the Arctic waters of the Barents Sea “has been adjusted downwards,” based on the high specification 3D seismic survey and extensive data and analysis from the well drilled for the extended well test conducted in 2018. Initially, Lundin had expected that the combined gross resource range for the Alta discovery and nearby Gohta discovery was at between 115 and 390 million barrels of oil equivalent (MMboe). As of September 2018, the development concept for Alta was a subsea field development connected to a standalone floating production and storage vessel.But now, Lundin is revising down its resource estimate, although it did not say by how much, and notes that “a standalone development of the Alta and nearby Gohta discoveries is no longer considered to be commercial.”The options for development now include a subsea tie-back development to either the Johan Castberg oilfield or another future host development in the area, Lundin said on Monday.The decreased resource estimate is another blow to the hopes of the Norwegian Petroleum Directorate (NPD) that major discoveries in the Barents Sea could sustain Norway’s oil and gas production into the next decades. The operators offshore Norway are exploring for oil and gas in both mature areas and in frontier regions in the Barents Sea in the hopes of finding the next giant Johan Sverdrup, which started pumping oil in early October 2019.
Norway Arctic Oil Vision Suffers Another Blow -- Norway’s vision of establishing a new major oil province off its northern tip has suffered another blow. Lundin Petroleum AB, one of the most active explorers in the Norwegian Arctic, cut resource estimates for its Alta discovery in the Barents Sea and won’t develop the project independently, the company said on Monday. The field and the nearby Gohta find represented one of the hottest candidates for new projects in the Barents, an area estimated to hold two-thirds of the country’s undiscovered oil and gas. Lundin didn’t provide a new estimate for Alta, which together with Gohta was previously thought to have resources of as much as 390 million barrels of oil equivalent. The company said the two discoveries could be connected to Equinor ASA’s Johan Castberg field, which is due to start production in 2022, or to another future development. Regardless, unless Lundin finds more oil nearby, the two projects on their own won’t bring much-needed infrastructure like platforms or production vessels to the area, which in turn could have made other developments possible. Despite the potential for vast resources in the Barents Sea, only two fields have started production. Lundin’s latest downgrade for Alta follows other disappointments for the region, where the first four wells drilled by Equinor in a new area failed to produce commercial discoveries. After a record exploration year in 2017 with 17 wells, the total tally fell to seven in 2018 and five last year, according to the Norwegian Petroleum Directorate. ‘Limited Pipeline’The reduction at Alta shows a “limited pipeline” of projects for Lundin in a portfolio where the bulk of reserves is linked to the massive Johan Sverdrup field in the North Sea, Citigroup Inc. analysts said in a note to clients. The cut also highlights “the lack of meaningful exploration success recently,” it said. In a first sign its Barents optimism had limits, Lundin said in 2018 that it would need to rethink its efforts in the region if no significant new oil discoveries were made by the end of 2020.
Why U.S. LNG Can’t Win In Europe -- When Washington imposed sanctions on companies, the move drew criticism not just from Russia but from Germany as well. The sanctions, targeting firms building the pipeline that will increase Gazprom’s export capacity for Europe, were seen as interference in Germany’s internal affairs while the legislators who approved them saw them as a tool for deterring Russia’s energy influence in Europe. For some, however, the reason for the sanctions was the U.S.’s own energy plans for Europe. The Trump administration is following an agenda of energy dominance, and this dominance has to include Europe, which is one of the biggest markets for natural gas and, what’s more relevant to the U.S., liquefied natural gas. However, lessons from history, and that’s a history of Gazprom, would suggest that the energy dominance approach won’t work--not in Europe.Bloomberg’s Liam Denning recently reviewed a book by an IHS Markit expert on Russian energy, Thane Gustafson, titled The Bridge. The Bridge, according to Denning, contains, among other things, a cautionary tale for U.S. gas ambitions in Europe. The gist of it is that the European gas market is a lot more open and transparent than it used to be, and while this has served to reduce the influence of Gazprom on the continent, it has also served to deter anyone else that might want to try to take Gazprom’s place. The truth is that today, Europe has developed a continental gas network, and that network features LNG terminals. This means that many European countries are today a lot more flexible in their gas imports than they were 30 years ago, when Russia and Norway dominated the market. There is just one catch: the LNG has to be cheap enough to beat alternative supplies. Poland is already buying U.S. liquefied natural gas. The country is ready and willing to pay more if it has to, in order to reduce its dependence on Russian gas for a number of historical reasons. Yet last year Bulgaria, too, bought two cargos of U.S. LNG from Cheniere’s Sabine Pass liquefaction plant. Even so, Poland and Bulgaria are small potatoes. Germany is the biggest gas market in Europe and it will become even bigger as the country aims to shut down all its remaining nuclear power plants by 2022. This is why Gazprom is building Nord Stream 2 with Angela Merkel’s blessing, after all. And this is why the U.S. is sanctioning it if we leave aside the ideology that every government uses to advance its purely pragmatic agenda.
Livestock carrier spills fuel oil at port of Ceuta - The captain of the port of Ceuta has requested that the livestock carrierHolstein Express pay a bond of about $410,000 after the vessel allegedly spilled five tons of fuel oil into the harbor during bunkering operations. It is reportedly the largest spill at the tiny Spanish autonomous territory in two decades, according to local TV media. The bond amount includes funds to cover a possible future fine, plus the costs of cleanup. The owner, operator, insurer and ship's master are jointly liable for the cost of the bond, according to local media. The spill occurred during bunkering operations in the early hours of Friday morning. Initial reports indicate that human error led to a tank overflow, and an investigation into the root cause. is under way. Pollution containment and abatement began immediately when the spill was detected. Cleanup work was completed over the weekend, allowing the port authority to free up the pier where Holstein Express had been located. Before departing the dock, the ship's hull was cleaned off as well to prevent her from spreading pollution elsewhere in the harbor, according to El Faro Ceuta. Before her arrival at Ceuta, the Holstein Express delivered a consignment of 3,000 head of cattle to Alexandria, Egypt. As of Monday night, she was still moored alongside the breakwater in Ceuta's harbor.
Oil thieves behind major spills in Nigeria – FG -- The Federal Government on Friday attributed most of the oil spills in Nigeria to the activities of oil thieves. The Minister of State for Environment, Sharon Ikeazor, stated this during the opening of the office and laboratory of the National Oil Spill Detection and Response Agency in Port Harcourt, the Rivers State capital. She lamented that oil spills had impacted negatively on communities through the degradation of the environment, air and water pollution, adding that communities also faced disease and death as a result of oil spills. Explaining that oil spills had also caused the depletion of national revenue base, the minister said, “These illegal and inhuman practices must be stopped if we are to develop and progress as a nation. It is very sad to note that a majority of the oil spills that occur almost on a daily basis in Nigeria are caused by artisanal refining, pipeline vandalism, oil theft and illegal bunkering. “Only recently, the National Economic Council noted with concern that oil theft and other sources of leakages in the oil sector accounted for the loss of 22 million barrels of crude oil between January and June, 2019.” She said government was working with other stakeholders on the review of the NOSDRA Establishment Act in order to strengthen the agency and make it more effective in the discharge of its duties. On Ogoni clean-up, Ikeazor pointed out that the President, Major General Muhammadu Buhari (retd.) had begun the implementation of the United Nations Environment Report on Ogoniland through the setting up of the Hydrocarbon Pollution Remediation Project. According to her, remediation was ongoing at different sites, while the target is to ensure that remediated sites are restored to all practical extent.
Chennai oil spill- Panel to evaluate remedial measures undertaken - Nearly three years after the devastating Chennai oil spill, southern bench of National Green Tribunal (NGT) has constituted a joint expert committee to assess the remedial measures by the State government to restore the coast and submit a report in three months. This follows complaints of government’s inaction in taking up full-scale restoration works. Now, the panel, comprising expert members from Union Environment Ministry, Tamil Nadu Pollution Control Board (TNPCB) and State fisheries department, has been mandated to check the quality of aquatic life, look for residual remains of oil spill in seabed and river mouths. After the oil spill off Ennore coast on January 28, 2017, the coast has been cleaned, but sufficient efforts were not made to assess the extent of environment damage caused by the spill, it is pointed out. A detailed long-term monitoring programme on health of larvae, benthic organisms, turtles and birds during the post-spill period is what is needed to understand the extent of recovery of biological system and the likely period that would take for complete recovery of the ecosystem in the oil spill affected Ennore and Marina coasts. Committee on Assessment of Environmental Impact of Oil spill, constituted by State Department of Environment three months after the incident submitted its report, which gathered dust even as Central and State research institutes awaited funds for long to commence the studies on various aspects, including fisheries. Integrated Coastal and Marine Area Management Project Directorate (ICMAM) carried out analysis of Total Petroleum Hydrocarbons (TPH) in edible fish caught using trawl nets operated by fishing trawlers at depths of about 10m. The analysis showed 21 species were contaminated by TPH measuring 4.51 µg/g. No data on safe limits for TPH in fish is available, which makes it difficult to interpret whether the observed value of 4.51 µg/g in fish is within safe limit. Experts are concerned about the probable environmental impacts. Experts concerned Considering the high viscosity of bunker oil, low reactivity and persistency in environment, it is certain that the oil will continue to be present in sediments and organisms at least for a period of five-eight years, experts say.
Misfired explosion behind Pertamina oil spill in West Java - A misfired explosion during the drilling of the YYA-1 oil well caused a massive oil spill in West Java in July last year, according to an Energy and Mineral Resources investigation team. The ministry’s oil and gas environment director Adhi Wibowo said on Tuesday that the explosive – whose function was to perforate the bore pipe to allow gas inside – should have been detonated 6,600 feet below the surface. Instead, the explosive was detonated at 700 feet, where the lower pressure enabled greater damage. “It damaged the bore pipe and the geological formation such that the drill rig became tilted,” he said, referring to the fact that the YYA-1 oil rig, owned by state-owned oil company Pertamina, was tilted 13 degrees following the oil spill. Pertamina had even deployed tug boats to ensure the rig did not tilt any further. The broken well is one of three wells underneath Pertamina’s offshore platform in the ONWJ Block, 2 kilometers north of Karawang. The spill had reached nine islands in Thousand Islands regency as of September, with islands such as Untung Jawa and Lancang suffering the most. Officials from the Environment and Forestry Ministry previously estimated environmental cleanup efforts would take as long as six months. “We are still investigating why this premature explosion happened. There might have been unexpected pressure from the rock formation that triggered the explosive," Adhi said. He added that the investigative team, consisting of academics and industry practitioners, was expected to have the final investigation result out by next month. They determined a "premature explosion" as the oil spill’s cause in December last year. The oil spill was caused by a gas well kick – the release of gas caused by low pressure in a wellbore – on July 12, 2019, that worsened two days later. The spill is estimated to cost "hundreds of billions of dollars" to clean up, according to a source.
China's 2019 annual crude imports set record for 17th year - Last year, China imported a record 506 million tonnes of crude oil, according to data from the General Administration of Customs. That is equivalent to 10.12 million barrels per day (bpd), according to Reuters’ calculations based on the data. Chinese crude imports have set records every year since 2003, according to customs data on Refinitiv Eikon. December arrivals were 45.48 million tonnes, customs reported. That is equivalent to 10.71 million bpd, according to Reuters’ calculations, the third-highest ever on a daily basis and down from a record of 11.13 million bpd set in November. The annual increase equates to 882,000 bpd in incremental purchases, largely because of demand from new plants that added 900,000 bpd to China’s oil-processing capacity, although some of the units started operating only in December. December imports were boosted by private refiners using up their annual import quotas, while state plants stocked up on oil before the holiday shutdown that accompanies China’s Lunar New Year festival, which falls in late January this year. “Chinese independent refineries, including two mega projects Hengli and Rongsheng, stepped up purchases before year-end to maximize the utilization of crude import quotas,” However, state refiners likely slowed down opportunistic purchases amid elevated freight rates in October, resulting in slightly lower December arrivals, said Chen. Last year marked the biggest penetration of private chemical companies into China’s refining business, after the emergence between 2016 and 2018 of smaller independent oil processors often known as “teapots”. Hengli Petrochemical and Zhejiang Petrochemical Corp, controlled by Zhejiang Rongsheng Holdings, each added 400,000 bpd in processing capacity, mainly focused on petrochemical output. That boosted China’s crude oil imports notably from Saudi Arabia, helping the kingdom reclaim its title from Russia as China’s top crude supplier. Meanwhile, natural gas imports, including fuel supplied as liquefied natural gas (LNG) and via pipeline, were 9.45 million tonnes, the third-highest on record on a monthly basis. The hefty December purchases included LNG imports that rose to a record last month with China overtaking Japan the world’s top importer of the fuel for the second month in a row.
Middle East tensions draw crude oil eyes, but China may matter more - (Reuters) - What’s the bigger risk to global crude oil markets this year, the threat of escalating conflict and even war between the United States and Iran, or a surge in exports of refined products from The obvious answer is the possibility of military confrontation between the United States and Iran, but if the question is swapped to which factor is more likely to influence crude markets, then China comes to the fore. While the actions of both U.S. President Donald Trump and Iran’s hardline leaders are challenging to predict, the chances are that both sides manage to hold off from an outright war, while still trying to undermine each other’s position in the volatile Middle East region. This is the pattern seen again with the U.S. killing of Iranian general Qassem Soleimani and the subsequent missile attacks by Tehran against U.S. military bases, which killed nobody and seemed calculated not to draw a further round of retaliation. The tensions in the Middle East are likely to remain front and centre in media headlines, meaning that the issue will occupy crude producers, traders and buyers, even if the actual impact on oil prices is muted. But assuming some kind of lid can be kept on war in the Middle East, a more pertinent issue for the crude oil market may be what’s happening in China, the world’s largest importer. Last year saw a sharp increase in both China’s imports of crude and its exports of refined fuels.While official December figures have still to be released, it looks like China’s crude oil imports will have risen by around 10% in 2019 from the year earlier. In the first 11 months of the year they were up 10.5% to the equivalent of 10.1 million barrels per day (bpd). Refinitiv data points to Chinese imports of about 10.7 million bpd in December, which if achieved would mean full year imports of around 10.1 million bpd, an increase of about 906,000 bpd over 2018. This means that China is by far and away the most important driver of global oil demand growth, given the expectation by the International Energy Agency that world demand growth was about 1.2 million bpd in 2019.
What happens if China really does try to buy $52 billion of U.S. crude, coal, LNG?: Russell - (Reuters) - The problem for energy markets isn’t whether China can actually buy the amount of crude oil, coal and liquefied natural gas (LNG) it has apparently committed to under the trade truce with the United States. The real issue is what happens if Beijing tries and succeeds? The terms of the deal imply an absolutely massive increase in Chinese imports of U.S. energy, and if this actually comes to pass, it will have serious disruptive effects across global markets. U.S. President Donald Trump and Chinese Vice Premier Liu He signed a deal in Washington on Wednesday that cut some U.S. tariffs on Chinese goods in exchange for Beijing agreeing to substantial increases in purchases of energy and agricultural commodities, as well as manufactured goods and services. As part of the agreement, China agreed to buy at least $52.4 billion in additional energy purchases over the next two years, from a baseline of $9.1 billion in 2017. That will be broken into $18.5 billion in 2020 and $33.9 billion in 2021. For this year the deal implies that China will have to buy about $27.6 billion in energy products from the United States. It’s worthwhile to look at a little history to put this figure in context. For crude oil, the best-ever month for China’s imports from the United States was June 2018, when 14 million barrels arrived, according to Refinitiv data. If that record performance is annualised, it would mean that China would buy about 170 million barrels, which would be worth about $9.82 billion at the current price for West Texas Intermediate futures of $57.81 a barrel. For LNG, the record month for China’s U.S. imports was January 2018, when 452,000 tonnes of the super-chilled fuel arrived. If this top performance is annualised it would mean imports of around 5.42 million tonnes of LNG, which at the current North Asian spot price of $5.30 per million British thermal units (mmBtu) equates to a value of about $1.54 billion. For coal, the record month of Chinese imports was February 2017, when imports from the United States were 957,000 tonnes. Annualising this figure results in a value of $1.77 billion, and that’s assuming all of the U.S. exports to China are higher value coking coal, which hasn’t been the case as there have been small volumes of cheaper thermal coal in the mix. Under this hypothetical scenario, the combined value of the highest-volume years for these three energy products comes out to $13.13 billion. This means that for China to reach the 2020 target of $27.6 billion in energy imports from the United States, it would take more than a doubling of the record months achieved in the past.
OPEC brings crude oil output below 2020 cap ahead of schedule: Platts survey - OPEC pared its crude oil production by 100,000 b/d in December, the latest S&P Global Platts survey finds, putting the bloc under its new, more-stringent quotas a month early. OPEC pumped 29.55 million b/d, according to the survey, with kingpin Saudi Arabia producing well below its cap as usual and compliance laggards Iraq and Nigeria improving their discipline. Now entering their fourth year of production cuts to prop up the oil market, OPEC, Russia, and nine other countries agreed last month to deepen their cuts to 1.7 million b/d — of which OPEC would shoulder 1.2 million b/d — from January to March. The 10 members with quotas under the accord, which exempts Iran, Libya, and Venezuela, produced 25.06 million b/d in December, making good on their new collective ceiling of 25.15 million b/d. Despite the reduced output and concerns about supply disruptions because of escalating hostilities in the Middle East, OPEC officials have said the market is in no danger of a shortage and that they see no reason to reverse their cuts for now. Indeed, many analysts continue to forecast a supply glut through the first half of the year and say additional production restraint from OPEC and its partners may be needed to prevent an oil price slump. Saudi Arabia, OPEC’s largest producer by far, trimmed its production in December to 9.82 million b/d, according to the survey, after surging it in November to replenish stocks depleted in the wake of the September 14 attacks on the Abqaiq processing facility and Khurais oil field. That is far below its quota of 10.31 million b/d under the deal that expired at the end of December, and also well under its new cap of 10.14 million b/d. Saudi energy minister Prince Abdulaziz bin Salman has pledged to hold the kingdom’s output at around 9.74 million b/d starting in 2020, as long as other members respect their quotas.
Oil Glut Overshadows Geopolitical Risk In 2020 - The risk of oil supply disruptions from around the world has diminished, and rising non-OPEC production provides a “solid base from which to react to any escalation in geopolitical tension.” In its January Oil Market Report, the International Energy Agency (IEA) said that there is plenty of oil sloshing around, despite the U.S. and Iran nearly going to war.“We cannot know how the geopolitical situation will play out over time, but for now the risk of a major threat to oil supplies appears to have receded,” the IEA said. “As was the case following the attacks on Saudi Arabia in September, once the initial fears of a sustained supply shock subsided, the Brent price rapidly gave up its $4/bbl spike.”Oil inventories held in OECD countries is 9 million barrels above the five-year average, and there are also plenty of strategic stockpiles to call upon in the event of an outage, the agency said.Still, while geopolitical risk has “faded,” it has not gone away entirely. The Trump administration may have refrained from all-out war against Iran, but the assassination of General Soleimani took the confrontation to new heights.While Trump’s speech earlier this month was widely interpreted as one of “de-escalation,” he also prefaced his comments by saying Iran would never have a nuclear weapon. But, sanctions, “maximum pressure,” and the assassination of one of its top leaders will obviously provoke a response. With little left to lose, Tehran is backing out of most of its commitments under the 2015 nuclear agreement, a deal that the U.S. already exited nearly two years ago.All of which is to say the countries are seemingly locked on a collision course. The world breathed a sigh of relief when the two countries backed away from the brink, but there are decent odds that the conflict flares up again in the not-so-distant future. There are few pathways for actual de-escalation, absent an overhaul of U.S. policy. At the same time, Iran has already lost much of its oil supply due to sanctions. So, the additional supply risk is concentrated in Iraq, where the U.S. and Iran conflict is actually playing out. “Recent events have shown that Iraq is a potentially vulnerable supplier, just as its strategic importance has grown,” the IEA said. The agency noted that Iraqi oil exports have doubled since 2010, from 2 million barrels per day (mb/d) to 4 mb/d. China and India each import roughly 1 mb/d of supply from Iraq.“Iraq’s rising capacity has been very welcome as sanctions have reduced Iran’s exports to only 0.3 mb/d and Venezuela’s production has collapsed,” the IEA wrote. Left unsaid was that those outages were both the result of U.S. sanctions.
IEA- The Oil Glut Is Going Nowhere - - Global oil markets will remain well supplied this year, with a possible overhang of some 1 million bpd, the head of the International Energy Agency, Fatih Bitol, told Reuters. “Non-OPEC production is very strong. We still expect production coming from, not just United States, but also Norway, Canada, Guyana, among other countries,” Birol said, adding “Therefore, I can tell you that the markets are, in my view, very well supplied with oil, and as a result of that, we see prices remain at $65 a barrel.” Norway is about to experience a sharp jump in oil production in the next four years, a new forecast from its Petroleum Directorate has shown. After a steady decline over several years, production is set for a 43-percent increase between 2019 and 2024, the NPD said, reaching 2.02 million bpd in 2024. This will be thanks to the start of production at the Johan Sverdrup offshore field along with several smaller fields. In Guyana, Exxon has just begun production from the Liza-1 well. Daily output from the deepwater field should reach 120,000 bpd before the end of 2020. Exxon is also building a second production vessel that should raise the total to 220,000 bpd.In Canada, meanwhile, oil production is also set to grow despite a government-imposed curtailment aimed at supporting prices. The curtailment was relaxed twice in 2019 and it only concerns large producers, allowing smaller ones to pump as much as they can sell. Based on this, the Canadian Conference Board recently forecast oil production in the country will be growing at 4.2 percent annually between this year and 2024.Demand growth, however, will be slow, according to Birol.“We are expecting a demand growth of slightly higher than 1 million barrels per day,” the top IEA man told Reuters. This means that except sudden spikes in prices due to geopolitical factors or possible production outages in a major producer, oil prices this year will remain largely range-bound.
Oil markets will soon have to rethink predictions of ‘ample’ global supply, minister says - There could be a recalibration of oil market expectations regarding an “ample” global oil supply, Bahrain’s oil minister said Monday, despite expectations that U.S. shale oil production could be hurtling towards 14 million barrels per day in the next few years. Speaking at a CNBC-moderated panel at the International Petroleum Technology Conference (IPTC) in Saudi Arabia, Bahrain’s Oil Minister Sheikh Mohammed bin Khalifa Al Khalifa said that an abundant supply of oil, currently seen amid rampant U.S. shale production, might not be so reliable as we progress through 2020. “Going forward, all eyes are on U.S. production again, if there’s going to be an extra million barrels (of production a day), yes, this will suppress oil prices but the current indicators of rig counts ... are telling you that maybe that is going to be a challenge,” he told CNBC’s Hadley Gamble, speaking on the panel in Dhahran. “So, my recommendation is all eyes on U.S. production, if they can hit 14 million (barrels) then yes oil prices will extend a bit further but, eventually, this sentiment that there is ample supply will have to shift, there will be a scarcity impulse in supply and when that happens in the next few years, definitely, it could be as early as the end of this year, we will have to see.” Al Khalifa cautioned that there had been few major oil discoveries recently and investment was ebbing; “So we are challenged, I think the future is challenged in terms of supply, more than people expect today.” “We can see that investments are not as bold as they once were, then perhaps that inflection point isn’t that far away,” he added. At that point, he said the challenge would be making sure that other producers “can meet the demand that keeps rising.” The U.S. Energy Information Administration (EIA) expects American oil production to average 13.2 million barrels a day (b/d) in 2020, an increase of 0.9 million b/d from the 2019 level. However, growth in supply is slowing from the last few years with 2018 growth of 1.6 million b/d and 2019 growth of 1.3 million b/d. In September 2019, the U.S. exported exported 90,000 b/d more total crude oil and petroleum products than it imported, the first month recorded in U.S. data where it had exported more than it had imported. But in its latest short-term energy outlook released in January, the IEA noted that slowing crude oil production growth will result from a decline in drilling rigs over the past year and that it expected this trend to continue into 2020.
Oil price slides as hedge funds' buying fades: Kemp - (Reuters) - Despite the increase in tensions across the Middle East after the killing of an Iranian general by a U.S. air strike, hedge fund managers added only modestly to their bullish position in petroleum last week. Hedge funds have gambled heavily on an oil price recovery this year, pricing in accelerating global growth, restrictive output policy by Saudi Arabia and continued tension short of war between the United States and Iran. As a result, the potential to add further bullish positions is more limited than a couple of months ago and prices are vulnerable to a sharp correction if growth disappoints or the threat of open conflict diminishes. Hedge funds and other money managers increased their bullish position in the six most important petroleum futures and options contracts by only 19 million barrels in the week to Jan. 7 (https://tmsnrt.rs/2tQ0WzD). Bullish positions increased by the smallest amount for five weeks, according to position records published by the U.S. Commodity Futures Trading Commission and ICE Futures Europe. On the eve of the air strike that killed Qassem Soleimani, funds had already amassed a large bullish position in crude and refined fuels such as gasoline and diesel, which may have discouraged further buying. Moreover, the crisis that erupted on Jan. 3 already appeared to be contained by Jan. 7, probably contributing to the limited rise in bullish positions evident in the weekly records. Funds have been net buyers of petroleum futures and options in 11 out of the past 13 weeks, increasing their combined position by a total of 533 million barrels since early October and helping to propel prices higher. Portfolio managers have anticipated an acceleration in global economic growth and oil consumption during 2020 as well as continued output restraint by Saudi Arabia and its allies in the OPEC+ group of major oil exporters. But the number of bullish positions is now at its highest for 15 months and is already in the 82nd percentile for all weeks since 2013, which may have made fund managers wary about increasing their exposure any further.
Oil Prices Turn Negative as Supply Worries Overcome Initial US-Iran Tensions - Oil prices turned negative for the year after dropping on Monday as traders and investors focused on the possibility of oversupply in crude amid dissipating tensions that initially threatened tanker movements in the Middle East.Brent, the global benchmark for crude, was down 65 cents, or 1 per cent, at $64.33 per barrel by 11:37 a.m. EST (15:37 GMT), continuing its slide from the middle of last week when the United States and Iran moved away from an outright war after Tehran fired missiles at US airbases in Iraq.West Texas Intermediate (WTI), the US crude benchmark, was down 74 cents, or 1.3%, at $58.28 per barrel.As of Monday, Brent was down 2.6% on the year while WTI showed a 4.5 per cent loss.Brent hit four-month highs of $71.75 last week, while WTI surged to an eight-month peak of $64.72, reacting to the Tehran action which was in retaliation to the US killing of top Iranian general Qasem Soleimani on January 3. But the missile attacks on the Iraqi airbases did not kill anyone and US President Donald Trump stood down from escalating his fight with Iran, easing geopolitical tensions in the Middle East, which often send oil prices higher. Oil tankers avoided the Strait of Hormuz that straddles Iran last week as a precautionIran was rocked by street protests on Monday in response to the Islamic Republic’s accidental downing of a Ukraine Airlines flight while firing at the US airbases in Iraq. But the unrest was contained and did not threaten the movement of oil in any way. Easing geopolitical tensions aside, analysts said oil prices were also pressured by worries that crude supplies could balloon from seasonal lows in demand.
Oil prices expected to stay around $65-70 through 2024 - (Reuters) - Long-term expectations about oil prices remain firmly anchored around $65-70 per barrel, according to the latest annual survey of energy professionals conducted by Reuters. Plentiful supplies from U.S. shale plays and other sources outside the Organization of the Petroleum Exporting Countries are expected to keep prices close to their recent range for the indefinite future. Fears about peaking oil supplies, common ten years ago, have disappeared; now there are some indications that expectations about peaking oil demand are taking hold.Brent is forecast to average $65 per barrel in each of the next five years based on the median, or $67 this year rising slightly to $69 by 2024 based on the mean.Most forecasters expect average prices to remain between $60 and $75 per barrel in each of the next five years, with only a very small number expecting them to dip below $50 or rise above $90.The results are based on a questionnaire sent to over 9,000 energy market professionals, with responses received from 950 between Jan. 7 and Jan. 10 (https://tmsnrt.rs/2FNjC5J).Price forecasts are very close to last year’s survey and previous years, though in most cases the average has fallen by $1 or $2. In earlier surveys, there was some slight upward drift in price expectations for the out years, but there is no sign of that this year. Most respondents seem convinced there will be enough oil to meet conceivable demand at around $65 per barrel in the medium term. Fewer than 5% thought oil prices would average $100 or more in 2024, prices that would signal pressure on production, which were once common between 2011 and 2014. In contrast, nearly 16% of respondents thought prices would average less than $50, a possible a sign of softening consumption and market saturation as part of the transition away from an oil-based transportation system.
Citi explains why there’s an ‘ultimate cap’ on oil prices - The cost of producing electricity from solar energy has in the last two years been lower than that of fossil fuels — and that “permanent change” will limit how high oil prices can climb, according to Citi. That shift is coming at a time when global oil supply is running ahead of demand, which is already weighing down on energy prices, David Bailin, chief investment officer at Citi Private Bank, said on Thursday. As evidence of the limited upside in oil prices, Bailin pointed to last year’s drones attack on the world’s largest oil processing facility in Saudi Arabia. The attack on two Saudi Aramco facilities — claimed by Iran-aligned Yemen’s Houthi rebels — cut Saudi oil production by half and the world’s daily output by 5%. “We saw an 11-day impact in the markets: The initial spike of as much as 8% in oil prices, and then it was 4% and then ultimately down to zero,” Bailin told CNBC’s “Squawk Box Asia.” “It’s going to take something much bigger to make a permanent impact on oil prices and have them sustainably higher than that,” he added. A shift from oil, natural gas and coal to solar power in electricity generation will be “the ultimate cap” on prices of fossil fuels, said the CIO. “We believe that’s a permanent change. In fact, our clients were investing in that as an unstoppable trend because now you can identify that cost point, it’s a great opportunity,” he said. A report released last year by the International Renewable Energy Agency predicted that electricity generated by onshore wind and solar will be consistently cheaper than any fossil fuel source starting 2020, reported Reuters. The agency is an inter-governmental body that aims to help countries transition to sustainable energy sources.
‘Very high’ chance of oil falling toward $40 if Iran sees regime change, says JBC Energy - Oil prices could plummet toward $40 per barrel if the Iranian regime collapses, according to the chairman of an energy research institute. Johannes Benigni, chairman of JBC Energy, made the comments on CNBC’s “Capital Connection” amid continuing unrest in Iran. Demonstrations erupted on Saturday and have continued for three days since, following the government’s announcement that its military was responsible for shooting down a Ukrainian passenger plane. Protesters reportedly chanted slogans including “they are lying that our enemy is America, our enemy is right here,” outside a university in Tehran. Iran’s economy has also been under immense pressure from U.S. sanctions that were reimposed after President Donald Trump withdrew from the 2015 nuclear deal. Former President Barack Obama’s national security advisor on Sunday said Iran is closer “than ever before” to a possible collapse in the regime. “So you take the removal of (top Iranian commander Qasem Soleimani), you take the accidental downing of the civilian aircraft coupled with the amount of popular unrest — the needle towards possible collapse of a regime has to be something that people think about,” General James Jones told CNBC’s Hadley Gamble. “It’s probably not politically correct to talk about it, but you have to think about it.” JBC Energy’s Benigni said a change in leadership in Tehran would have a major impact on energy prices. “For the oil market, it would mean that the likelihood of oil prices dropping towards $40 is very high,” he said on Tuesday. Brent crude traded around $64.23 on Tuesday afternoon in Asia.
Oil snaps five day losing streak as Street eyes US-China trade deal - Oil prices climbed on Tuesday after five days of declines as the United States and China prepared to sign a preliminary trade deal and as Middle East tensions eased. Brent crude gained 31 cents, or 0.5%, to trade at $64.51 per barrel. U.S. West Texas Intermediate crude futures rose 15 cents or 0.3% to settle at $58.23 per barrel. That put WTI front-month futures on track to close below the second month for the first time since Nov. 19, which is known in the trading industry as contango. In addition, oil also found technical support after WTI fell to a more than five-week low of $57.72 before bouncing off the 200-day moving average. The outlook for oil demand was supported by the expected signing of a Phase 1 U.S.-China trade agreement on Wednesday, marking a major step in ending a dispute that has cut global growth and dented demand for oil. “Oil prices are tentatively rebounding after seller exhaustion kicked (in) as investors await the next developments on the trade front and whether we see a strong pickup with global demand following the phase-one trade deal,” Edward Moya, senior market analyst at OANDA in New York, said in a report. China has pledged to buy more than $50 billion in energy supplies from the United States over the next two years, according to a source briefed on the trade deal. Despite the trade dispute, China’s crude oil imports in 2019 surged 9.5% from the previous year, setting a record for a 17th straight year as demand growth from new refineries propelled purchases by the world’s top importer, data showed. However, gains were limited as concerns about possible supply disruptions eased due to a decline in tensions in the Middle East.
Oil prices settle higher for the first time in 6 sessions - Oil futures settled higher Tuesday, snapping a five-day losing streak that dragged the U.S. benchmark to its lowest level since early December. “The broader energy market is likely falling back into its familiar range with WTI trading between $52 and $63” a barrel, analysts at Sevens Report Research wrote in their latest newsletter. Fundamentals are largely bearish due to oversupply concerns, especially given the huge build in stockpiles reported in the refined products for the week ended Jan. 3, Sevens Report said. Tensions between the U.S. and Iran have eased, though the “threat of more geopolitical unrest still exists and is likely to keep a floor under the market, preventing a decisive breakdown in the near term.” West Texas Intermediate crude for February delivery CLG20, +0.74% rose 15 cents, or 0.3%, to settle at $58.23 a barrel on the New York Mercantile Exchange, while March Brent BRNH20, +0.73% added 29 cents, or about 0.5%, to $64.49 a barrel on ICE Futures Europe. WTI, the U.S. benchmark, closed Monday at its lowest level since Dec. 3, while Brent, the global benchmark, saw its lowest close since Dec. 12. Analysts said oil was buoyed in part by upbeat expectations around the expected signing Wednesday of a so-called phase one U.S.-China trade deal. The terms include a call for China to buy more than $50 billion in energy supplies, Reuters reported, citing a source familiar with the details. Oil jumped earlier this month as tensions between Iran and the U.S. flared following a U.S. military strike that killed a top Iranian military commander in Iraq. But crude prices gave back gains last week as tensions appeared to ebb following a retaliatory strike by Iran aimed at bases housing U.S. troops in Iraq that produced no casualties. Analysts said the focus returned to market fundamentals as geopolitical worries faded. “Unfortunately for the bulls, the fundamental outlook over the first half of this year is not overly constructive. The market is set to see a sizable surplus, which should mean weakness for both the flat price and time spreads,” said Warren Patterson, head of commodities strategy at ING, in a note.
WTI Dips After Surprise Crude Build Zero Hedge - After 5 straight down days, oil managed modest gains today with WTI bouncing off $58.00 on the heels of some optimism surrounding the imminent signing of the trade deal."The broader energy market is likely falling back into its familiar range with WTI trading between $52 and $63" a barrel, analysts at Sevens Report Research wrote in their latest newsletter.Fundamentals are largely bearish due to oversupply concerns, especially given the huge build in stockpiles reported in the refined products last week, so all eyes will be on tonight's API data (barring any geopolitical headlines)... API:
- Crude +1.1mm (-1.1mm exp)
- Cushing -69k (-1.0mm exp)
- Gasoline +3.2mm (+3.4mm exp)
- Distillates +6.78mm (+1.1mm exp)
After the prior week's surprise build, analysts expected a small draw in crude (but continued builds in products). However, crude saw a build and products saw significant builds... WTI hovered around $58.40 ahead of the data, and dropped modestly on the surprise build... "Unfortunately for the bulls, the fundamental outlook over the first half of this year is not overly constructive. The market is set to see a sizable surplus, which should mean weakness for both the flat price and time spreads," said Warren Patterson, head of commodities strategy at ING, in a note.
WTI Extends Losses After Massive Product Inventory Build, New Record Production - Oil prices are extending losses after last night's surprise crude build reported by API, with WTI trading below $58 following OPEC’s latest forecasts suggesting a weaker outlook for global oil markets this year as surging supplies from competitors from Norway to Guyana threaten the group’s efforts to defend crude prices. DOE:
- Crude -2.55mm (-1.1mm exp)
- Cushing +342k (-1.0mm exp)
- Gasoline +6.678mm (+3.4mm exp)
- Distillates +8.171mm (+1.1mm exp)
The prior week was dominated by a surprise crude build and huge product inventory builds. This week saw crude inventories drop modestly (-2.55mm) but gasoline and distillates inventories soar (and the first Cushing build in 9 weeks) US Crude production pushed higher, hitting 13mm b/d for the first time... WTI traded sub-$58 ahead of the API print, and dropped notably after the huge buiulds in products.
Oil down slightly after U.S.-China trade deal, U.S. product build – (Reuters) - Oil prices were down slightly on Wednesday, pressured early by data showing big increases in U.S. refined products but recovered some of the losses later by the signing of a Phase 1 trade deal between Washington and Beijing. Brent LCOc1 futures lost 49 cents, or 0.8%, to settle at $64 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 ended 42 cents, or 0.7%, lower at $57.81. “The bullish impetus that we had expected off of today’s weekly EIA report failed to develop and as a result, the complex appears headed for lower levels than we had anticipated despite the late session recovery,” Under the Phase 1 trade agreement, China will buy $18.5 billion more in U.S. energy products in the first year and $33.9 billion in the second. However, commodity traders and analysts remained cautious - struggling to map out how China will reach the eye-popping amounts it is committing to buy from the United States. Trump said he would remove all U.S. tariffs on Chinese imports as soon as the two countries completed Phase 2 of their trade agreement, adding he does not expect there to be a Phase 3 pact. Earlier, oil prices fell to their lowest in over a month after the U.S. government reported big increases in gasoline and distillates inventories and a record crude output. U.S. gasoline stockpiles last week rose to their highest since February, while distillate inventories jumped to their most since September 2017, according to the U.S. Energy Information Administration (EIA). “I think they were able to look past the build in gasoline and distillates, realizing that it will probably work itself out in the next couple of weeks,” Flynn said. The EIA report also showed crude production for the week ended Jan. 10 rose to 13 million barrels per day (bpd) and a much-bigger-than-expected draw in crude inventories.
Oil prices fall back to multiweek lows as U.S. gasoline, distillate supplies jump - Oil futures declined Wednesday with U.S. prices at their lowest in six weeks after weekly government data revealed hefty increases in domestic supplies of gasoline and distillates.Petroleum products, especially heating oil, “had an eye opening, much larger build than was expected,” Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch. Also noteworthy, inventories at the U.S. trading hub of Cushing, Okla. “saw a build for the first time in several weeks.”The move lower for crude oil came despite an unexpected decline in U.S. crude stockpiles and the official signing of the Phase 1 U.S.-China trade agreement. West Texas Intermediate crude for February delivery lost 42 cents, or 0.7%, to settle at $57.81 a barrel on the New York Mercantile Exchange, after gaining 0.3% on Tuesday. The settlement was the lowest for a front-month contract since Dec. 3, according to Dow Jones Market Data. March BrentBRNH20, +0.77% shed 49 cents, or 0.8%, to $64 a barrel on ICE Futures Europe for the lowest finish since Dec. 11.The Energy Information Administration data showed supply increases of 6.7 million barrels for gasoline and 8.2 million barrels for distillates for the week ended Jan. 10. Analysts polled by S&P Global Platts had shown expectations for a smaller climb in supplies of 3.3 million barrels for gasoline and 1.3 million barrels for distillates, which include heating oil.The build in distillates is “among the highest in history,” and it comes with a weather forecast that is calling for a mild February,” said Phil Flynn, senior market analyst at Price Futures Group.
Oil ends higher as U.S. trade deals with Mexico, Canada and China boost demand prospects - Oil futures finished higher on Thursday as news of the Senate approval of the U.S.-Mexico-Canada trade agreement, along with the signing of the China-U.S. trade deal on Wednesday, boosted prospects for energy demand. Crude-oil prices were supported by the signing of the trade deal with Beijing that “could mean more U.S. oil headed for China, in addition to the prospects for improved global economic growth this year, which ought to improve oil demand growth,” said Marshall Steeves, energy markets analyst at IHS Markit.The Senate approval of the USMCA on Thursday added to those earlier gains, “in theory,” he told MarketWatch. “It remains to be seen how much new trade actually results from the agreement, but there should be some improvement at the margins.” Mexico and Canada are the top two destination countries for U.S. petroleum exports.In a broader context, however, the U.S. benchmark crude oil price is “back where it was just a few days ago, so today’s gain marks no apparent change in trend,” he said.West Texas Intermediate crude for February delivery CLG20, +0.46% rose 71 cents, or 1.2%, to settle at $58.52 a barrel on the New York Mercantile Exchange, after trading as high as $58.87. Prices on Wednesday settled at $57.81, the lowest for a front-month contract since Dec. 3, according to Dow Jones Market Data. March Brent BRNH20, +0.77%, the global benchmark, picked up 62 cents, or 1%, to end at $64.62 a barrel on ICE Futures Europe, following its lowest finish since Dec. 11 in the previous session.
Oil up Most In 2 Weeks, Betting on U.S.-China Deal - - There are still uncertainties that the Chinese will deliver, but oil traders seem willing to take their chances. Crude prices jumped their most in two weeks on Thursday in anticipation of big orders from China following its much-awaited phase one deal with the United States. New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled up 71 cents, or 1.2%, at $58.52 per barrel. London-traded Brent, the global crude benchmark, settled up 62 cents, or 1%, at $64.62. Thursday’s rebound was the biggest in two weeks for both the benchmarks, although WTI remained below the psychologically-important $60 per barrel level and Brent under the key $65 mark. U.S. crude had raced to eight-month highs of $64.72 and Brent four-month peaks of $71.22 after Iran fired missiles at U.S. airbases in Iraq on Jan. 6, heightening geopolitical tensions in the Middle East, the biggest production hub for oil. A calmer world since then pushed oil prices to six-week lows, with WTI touching $63.56 and Brent $58.36. Thursday’s rebound was a belated reaction to the previous day’s phase one agreement, which saw China agreeing to buy $50 billion in U.S. crude oil, liquefied natural gas and other energy purchases over the next two years under a larger $200 billion deal. “The consensus expectation is that if the deal is respected, China’s crude oil imports from the U.S. will rise to at least 500,000 barrels per day from zero in last October,” said Olivier Jakob, founder of Petromatrix, an oil risk consultancy in Zug, Switzerland. “However, at this stage, it is difficult to see how China would do this with its current import tariffs; something must change there,” Jakob added. He explained that if China were to increase its U.S. energy consumption to fulfill the deal, the United States would account for almost all of Chinese oil import growth in the next 12 months “to the detriment of OPEC+ and the North Sea (the production hub for Brent.” But Jakob said he doubted that would happen. Balancing some of oil’s upside on Thursday was major political uncertainty in Russia following the en bloc resignation of the government in Moscow, while Vladimir Putin remained as president. The Russian crisis is an important one in oil since the country is the second-largest oil producer after the United States.
Oil falls on China growth concerns - Oil prices fell on Friday as sluggish economic growth in China, the world's biggest crude importer, raised concerns over fuel demand.Brent crude futures fell 9 cents to $64.55 a barrel. U.S. West Texas Intermediate crude futures shed 20 cents to trade at $58.35 per barrel.For the week, both benchmarks were little changed. Brent was due to fall 0.5%, while WTI was on track for a 0.9% loss.China's economy, the world's second-largest, grew by 6.1% in 2019, its slowest expansion in 29 years, government data showed on Friday."Mounting downward economic pressure will perhaps limit oil's upside in the mid- to long-term," said Margaret Yang, market analyst at CMC Markets.But surging Chinese demand, as seen in refinery throughput figures, helped offset the less positive economic growth data.In 2019 Chinese refineries processed 651.98 million tonnes of crude oil, equal to a record high 13.04 million barrels per day (bpd) and up 7.6% from 2018, government data showed. Throughput also set a monthly record for December."The increase in China's refinery capacity is reshaping the trade flows of refined products, while the increase in U.S. crude oil production is reshaping the trade flows of crude oil," said Olivier Jakob of consultancy Petromatrix.Prices rose on Thursday after China and the United States signed their Phase 1 trade accord. As part of the deal, China committed to an additional $54 billion in energy purchases.But still, some were skeptical about fallout from the deal."China has agreed to purchase a massive amount of U.S. oil that may prove difficult to digest," Jim Ritterbusch, president of trading advisory firm Ritterbusch and Associates, said in a note. "This has contributed to the oil market's muted response to Phase 1 thus far."The market was also lifted by the U.S. Senate's approval of changes to the U.S.-Mexico-Canada Free Trade Agreement.Looking ahead, the International Energy Agency (IEA) on Thursday offered a bearish view of the oil market outlook for 2020.Supply from the Organization of the Petroleum Exporting Countries will exceed demand for its crude, the IEA forecast, even if OPEC member states comply fully with output cuts agreed with Russia and other producers in a grouping known as OPEC+.The IEA view is somewhat reflected by OPEC's own view, which found non-OPEC supply this year growing by more than overall demand.OPEC+ has been curbing oil output since 2017 to balance the market and support prices.
Oil futures suffer a second weekly decline -Oil futures ended with a modest gain on Friday, but registered a loss for a second week in a row as traders continued to weigh the prospects for energy demand in the wake of the China-U.S. trade deal and Senate approval of the U.S.-Mexico-Canada trade pact this week. Oil prices had spent the front half of the week moving lower “largely thanks to lingering oversupply concerns and a continued unwind of the geopolitical fear bid that was triggered by the U.S.-Iran tensions at the turn of the year,” said Tyler Richey, co-editor at Sevens Report Research. “Trade deal optimism stemming from the phase-one deal signing ceremony between the U.S. and China on Wednesday, as well as the[Senate passage of the revised U.S.-Mexico-Canada trade agreement Thursday “are both bolstering demand expectations, which has helped oil stabilize into the weekend,” he told MarketWatch. “While there are energy specific details within the respective trade deals, the more important and overarching theme is that the progress is positive for the broader global growth outlook, and ultimately, that is bullish from a demand standpoint,” Richey said. West Texas Intermediate crude for February delivery ended little changed, up 2 cents, or 0.03%, to settle at $58.54 a barrel on the New York Mercantile Exchange, after rising 1.2% on Thursday. March Brent, the global benchmark, advanced 23 cents, or 0.4%, to end at $64.85 a barrel on ICE Futures Europe, following a 1% gain a day ago. However, for the week both contracts suffered declines for a second week. Brent saw a weekly loss of about 0.2%. while WTI saw a nearly 0.9% weekly skid. Among the petroleum products, February gasoline RBG20, +0.41% fell 0.9% to $1.6406 a gallon, building a weekly loss of 1.1%, while February heating oil HOG20, +0.43% shed 0.04% to $1.8592 a gallon, for a weekly loss of 3.6%. Oil prices dipped lower Friday shortly after Baker Hughes BKR, +0.43% reported that the number of active U.S. oil rigs rose by 14 to 673 this week. That followed declines in each of the past three weeks.
Oil Market News: How It Learned to Live With Middle East Tension – - A dramatic U.S. drone strike kills Iran’s most important general. Tehran vows retribution and oil prices jump almost 5% as traders rush to cover the risk of a Middle East war. Then the selling starts. It’s a trading pattern that would have been unthinkable a decade ago, but has become increasingly familiar. The threat of conflict loomed over the heart of the global oil market this past week, but the usual panic buying by traders and consumers was met quickly by a wave of U.S. shale drillers grasping the opportunity to lock in prices for future production. The sudden price spike was blunted, and when the dust settled the plunge back down was steep. These trades, known as hedges, combined with a massive expansion of oil stockpiles in Asia and surging U.S. crude exports, are the recipe for a market that’s capable of quickly shrugging off disruptions that until recently were considered nightmare scenarios. “When prices spike in response to geopolitical events, producers tend to lay on more hedges,” said Ed Morse, global head of commodities research at Citigroup Inc. in New York. “The higher the price the more they hedge,” which makes any increase short-lived, he said. West Texas Intermediate crude, the U.S. benchmark, has slipped back below $60 a barrel as the last of the gains from President Donald Trump’s standoff with Iran faded. That didn’t just reflect the easing tensions after Tehran’s retaliation for the killing of General Qassem Soleimani inflicted no U.S. casualties. It was a manifestation of how the shale revolution has changed the psychology of the market. The same day that American missiles killed Iran’s most important military leader near Baghdad airport, the U.S. Energy Information Administration announced record net oil exports of 1.73 million barrels a day. That’s a historic change for a country that a decade ago was one of the world’s biggest importers, and it has transformed the way the market responds to a crisis. The shale boom that triggered this shift has been led by a multitude of independent drillers that are less able to absorb the financial impact of price swings than giants such as Exxon Mobil Corp. or Royal Dutch Shell Plc. Unlike the era that was dominated by the supermajors, any oil rally today finds a natural seller as smaller companies minimize their risks by hedging.
Saudi energy minister on Trump’s actions in the Middle East: ‘He can do whatever he wishes’ - Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said Monday that President Donald Trump should be able to do as he chooses when it comes to international security. Speaking during a panel session at the International Petroleum Technology Conference (IPTC) in Dhahran, Saudi Arabia, Abdulaziz said: “The president of the United States is the president of the United States, he can do whatever he wishes.” He’s “certainly” not accountable to me or “anybody in this room,” he added. Abdulaziz’s comments come as energy market participants continue to closely monitor heightened tensions in the Middle East. The U.S. killed Iranian military commander Qasem Soleimani earlier this month, triggering a dramatic escalation that many feared could result in a widening regional conflict. Iran, an arch-rival of Saudi Arabia in the region, responded to the U.S. attack by launching missiles at two military bases housing U.S. troops in Iraq. Iran’s supreme leader Ayatollah Ali Khamenei has since said the missile attacks were a “slap on the face” of the U.S., but such military actions were “not enough.” The situation remains tense, but both sides have sought to back off from intensifying the conflict over recent days. Stable oil markets “The U.S. is a strategic partner and it has a big role in terms of international security,” Abdulaziz told CNBC’s Hadley Gamble. “We are leaving it to our friends of the U.S. to conduct themselves in a manner they see fit in attending to a situation like this,” he added.
Aramco Supersizes IPO, Issues More Shares - Aramco has exercised the greenshoe option attached to its initial public offering, issuing another 450 million shares to raise an additional $3.8 billion, the company said as quoted by CNN. As a result, the already record-breaking IPO of the Saudi energy giant has been pushed up to a total $29.4 billion. Aramco listed 3 billion of its shares on the Tadawul exchange in early December and quickly touched the much-hyped $2-trillion valuation Crown Prince Mohammed was after when he decided to list a minority stake in the company. After that, however, the shares retreated, and last week took a nosedive on the renewed tension between the United States and Iran, which indirectly threatens the security of Saudi oil supply due to its proximity to Iran and the mutual hostility between the two largest countries in the Middle East. Using the greenshoe option, as CNN’s Claire Duffy notes in her report on the news, is commonly used by issuers to keep the stock from falling below the issuing price. This, however, is not the case with Aramco. The additional shares were allocated to buyers before the listing and they will not be floated on Tadawul. Even so, the stock was down by 10 percent since the listing as of January 6. The top concern among investors is geopolitical right now, but this can change when the holding period instituted by the Saudi government for retail investors expires. The holding period is meant to prevent a quick selloff the moment Aramco’s share price rises enough to be turned into a fat profit. Once it expires, six months after the listing, a selloff may still happen.
Saudi Arabia Carried Out Record Number Of Executions In 2019 - Saudi Arabia's shortage of executioners didn't stop the kingdom from carrying out a record number of death sentences in 2019, according to the non-profit Reprieve, which monitors how KSA handles capital punishment. According to figures provided to ABC News, KSA executed 184 people last year, including 90 foreign nationals. The most common crime committed by the prisoners who were put to death was drug smuggling (82 were executed for smuggling narcotics) while 57 were executed on murder charges. That's compared to a total of 22 executions in the entire US. Notably, KSA has seen a rise in killings since 2015, when Reprieve first started keeping track. In 2014, 88 people were executed, with that number nearly doubling to 157 executions in 2015. Executions stayed at around that level until last year, when the state killed 35 more people than they had in 2018. As we reported at the time, the Saudis killed 37 people in a single day, including a student who was supposed to be on his way to college in the US, which prompted Rep. Rashida Tlaib to lash out at the kingdom. It's not publicly known how many prisoners are currently on death row in Saudi Arabia. However, among those awaiting "imminent execution" are Ali al-Nimr, Abdullah al-Zaher and Dawood al-Marhoon, all of whom were sentenced to death for their roles in anti-government protests during the Arab Spring, nearly a decade ago.
Oman's Sultan Qaboos dies; successor vows to pursue peace - (Reuters) - Oman’s Sultan Qaboos bin Said, one of the Middle East’s longest- serving rulers who maintained the country’s neutrality in a turbulent region, died on Friday and his cousin Haitham bin Tariq al-Said was named as his successor in a smooth transition. With his death, the region loses a leader seen as the father of modern Oman, who balanced ties between two neighbors locked in a regional struggle, Saudi Arabia to the west and Iran to the north, as well as the United States. In a televised speech, Haitham promised to uphold Muscat’s policy of peaceful coexistence with all nations while further developing Oman. “We will continue to assist in resolving disputes peacefully,” he said. Oman and other Gulf states declared three days of official mourning with flags at half-mast for the Western-backed Qaboos, 79, who ruled since taking over in a bloodless coup in 1970 with the help of former colonial power Britain.
A Dangerous New Era in the Middle East - Der Spiegel - U.S. Secretary of Defense Mark Esper and Chairman of the Joint Chiefs of Staff Mark Milley traveled from Washington, D.C. on Dec. 28 to Florida, where Trump was vacationing in his luxury property, Mar-a-Lago. Outside, tourists were strolling along the beach. Inside, U.S. leadership was discussing how best to effectively punish Iran. The day before, Tehran allies had carried out a rocket attack on a military base in northern Iraq, killing an American. The U.S. was certain that Tehran had ordered Kataib Hezbollah, one of the Shiite militias Iran cooperates with, to carry out the assault. U.S. military leaders prepared a retaliatory attack and presented Trump with several options, most of them conventional military targets such as, according to an account in the New York Times, ships, missile facilities or Kataib Hezbollah positions. But as they generally do, the Pentagon officials also included a more extreme option: killing General Qassem Soleimani, the second-most powerful man in Iran and the country's chief military strategist. Soleimani had long been considered untouchable due to his senior position in Tehran. As commander of the Quds Force, he was in large part responsible for Iranian activities in the Middle East. Trump's predecessors in the White House, George W. Bush and Barack Obama, had both rejected the idea of killing Soleimani due to the very real risk of it triggering an uncontrollable war with Iran. Trump, too, was initially wary of making such a move, instead authorizing the Air Force to bomb Kataib Hezbollah positions on Dec. 29. But that did little to quell the burgeoning crisis. On the contrary, Islamists attacked the U.S. Embassy in Baghdad two days later, again likely at the behest of Iranian leaders. Trump was furious as he followed the events on television. The images were reminiscent of the 2012 assault on the U.S. Consulate in Benghazi, which resulted in the death of the American ambassador. Back then, the Republicans tried to pin responsibility for the attack on Secretary of State Hillary Clinton. On Jan. 2, Trump then made a decision that surprised even his closest advisers: He ordered the killing of Soleimani. It was the most extreme of the options available to the president and one that had, until then, only been discussed in largely theoretical terms in the Pentagon. It was a momentous decision, the most important foreign policy move of his tenure thus far, and one with deep and unpredictable implications for the Middle East and beyond. And he did so, according to U.S. media, without consulting his Iran experts – an impulsive decision. Just hours later, Soleimani was dead, killed by an American drone.
“Act of Divine Intervention:” ISIS Celebrates Killing of Iran’s Top General - It is no secret even to western media, particularly now that the U.S. has extinguished him completely, that the late Quds commander Qasem Soleimani fought ISIS to great effect. While not often talked about, the US essentially used him as an unofficial ally at one stage in the fight against the extremist group. It shouldn’t be a surprise therefore that ISIS has heralded the death of the late commander as an “act of divine intervention.” They are now reportedly planning a regroup in Iraq as the U.S. paused all of its anti-ISIS operations. Shortly before Soleimani’s death, many major newspapers were reporting that ISIS militants were already regrouping in Iraq. A top Kurdish official described the extremists as being like “Al-Qaeda on steroids” (something he already warned about two years prior). The corporate media is now alleging that if the U.S. were to leave completely, as per Iraq’s wishes, that this would also benefit ISIS. There is some merit to this argument as well, however, it only holds true as long as the U.S.-led coalition is genuine in its attempts to eradicate the organization (and not, say, secretly give them safe passage from one territory to another). If this is all hard to swallow, consider that Secretary of State Mike Pompeo was the mastermind who rallied Trump to deliver the strike on the prominent Iranian official. Pompeo is the new and improved Kissinger, receiving tips straight from the horse’s mouth on a regular basis. While it may sound counter-productive to some, it would make sense that the U.S. would want to postpone the defeat of ISIS as it gives the world’s superpower a never-ending excuse to operate its military inside the region. It has already made itself clear that withdrawing its troops, even at the serious request of the host country, is completely off the table—so the media need not worry about the potential end of U.S. imperialism in Iraq. Whatever the intentions, the immediate outcomes following the assassination are crystal clear. The U.S. may have ignited a spark in the region between Iran and itself to prolong the threat of an antagonized Iran, all the while keeping alive a terror threat that can also justify its presence for the next few years at least.
Protests in Tehran after Iran admitted shooting down plane - A group of Iranian protesters has demanded Iran's Supreme Leader Ayatollah Ali Khamenei and other senior leaders step down after Tehran admitted its forces mistakenly shot down a Ukrainian passenger plane, killing all 176 people on board. "Commander-in-chief [Khamenei] resign, resign," videos posted on Twitter showed hundreds of people chanting in front of Tehran's Amir Kabir University on Saturday. Protesters chanted slogans denouncing "liars" and demanded the resignation and prosecution of those responsible for downing the plane and allegedly covering up the accidental action. Others on Twitter asked why the Boeing 737-800 was allowed to take off on Wednesday, at a time when tensions between the United States and Iran were so high - Ukraine International Airlines Flight 752 crashed moments after departing from Tehran, hours after Iran struck bases housing US troops in neighbouring Iraq in retaliation to the US assassination of a top Iranian commander last week. Fars news agency reported that Iranian police dispersed students that were chanting "destructive" and "radical" slogans during the gathering in the capital. The United Kingdom confirmed its ambassador, Rob Macaire, was arrested briefly during the demonstrations, accused of "inciting" the protesters in front of the Amir Kabir University. Foreign Secretary Dominic Raab said the arrest was a "flagrant violation of international law" and repeated calls for Iran to de-escalate tensions. Earlier on Saturday, after days of denials, Iran said its military had shot down the Ukrainian plane, calling it a "disastrous mistake" but blaming the US for heightened tension. The military claimed air defences were fired in error during an alert which was imposed after the missile struck against US targets in Iraq. Authorities promised to bring those responsible to justice.
Canada's Trudeau: Iran plane victims would be alive had there been no regional tensions - (Reuters) - Canadian Prime Minister Justin Trudeau said on Monday that the victims of the Ukrainian airliner shot down in Iran would still be alive if the recent escalation of tensions in the region had not happened, according to a transcript of an interview with Global News TV. The U.S. killing of Iranian General Qassem Soleimani in Baghdad in a Jan. 3 drone strike prompted Iran to launch a missile attack on Iraqi bases housing U.S. troops on Jan. 8, hours before the passenger jet was shot down. All 176 aboard were killed, including 57 Canadians. “I think if there were no tensions, if there was no escalation recently in the region, those Canadians would be right now home with their families,” Trudeau said in the interview. Trudeau said Canada did not receive a heads up before the United States killed Soleimani, and that he “obviously” would have preferred one. “The U.S. makes its determinations. We attempt to work as an international community on big issues. But sometimes countries take actions without informing their allies,” he said. Trudeau said that while the government was working as quickly as possible to bring the bodies home for burial, it was likely to take weeks or “perhaps even months.” Canada said on Monday that Iran had signaled that Canadian investigators would take an active role in the probe of the crash, which Iran said at the weekend had been caused by a missile it fired in a “disastrous mistake.”
Pompeo: Killing Soleimani Part of ‘Broader Strategy’ Applying to China, Russia— Secretary of State Mike Pompeo still has not totally abandoned the pretext that the US assassination of Gen. Qassem Soleimani was based on an “imminent threat,” but is moving to rebrand the operation as part of a broad new strategy “that also applies to China and Russia.” Pompeo set this rather disturbing claim out in talks at Stanford’s Hoover Institute. He avoided mention of the “imminent threat” talking point that President Trump has since abandoned. He says that killing Soleimani was part of the Trump Administration’s goal of “real deterrence.”He said nations have to understand that the US is not only capable of imposing cost on nations by killing their leaders but “willing to do so,” saying that the killing put the US in the “greatest position of strength ever.” Pompeo presented the killing of Soleimani as part of the same strategy that has seen the US sending lethal military aid to Ukraine, and withdrawal of the US from arms control deals and testing of intermediate-range nuclear weapons. He also said sending more ships through the South China Sea was “restoring credibility.”
Iran: Mass protests call for leaders to resign --Protests took place across Iran on Sunday for the second day in a row following revelations that the fatal crash of a Ukrainian passenger jet was caused by an Iranian surface-to-air missile. Riot police and soldiers were deployed in large numbers around the capital, Tehran, especially to key sites like Vali-e Asr Square and university campuses.About 3,000 people took part in protests at Azadi Square in western Tehran, while hundreds more convened on university campuses. Protesters called for the resignation of many members of Iran's ruling elite. It appeared that much of the nationalist sentiment that the government had hoped to capitalize on following the assassination of General Qassem Soleimani by US forces in Iraq has begun to evaporate, particularly as the Revolutionary Guards did not admit their role in the airplane tragedy until Canada, the US and the UK announced they had evidence the jet was downed by a missile. The aircraft was shot down on Wednesday, hours after Iran launched a missile attack on two US air bases in Iraq. Iran also indicated on Sunday that a de-escalation of tensions between Iran and the US could be the only way forward. "We agreed... that the only solution to these crises is de-escalation from everyone and dialogue," said Emir Sheikh Tamim bin Hamad Al-Thani of Qatar, after diplomatic talks with Iranian President Hassan Rouhani on Sunday. On Twitter, US President Donald Trump called on Iranian security services not to react violently to protests, referencing the hundreds of demonstrators who died in anti-government actions in the fall.. Later he tweeted that he "couldn't care less" if Iran agrees to negotiate with the US, but also urged Iran: "don't kill your protesters."
Iranians take to social media to push for more protests: 'We're coming to the streets'- Iranian anti-government protestors have used social media to continue their calls for further protests in Tehran, Reuters reports. Protestors have been holding daily protests in Tehran and other cities around the country since the Iranian government admitted last week that it mistakenly shot down a Kyiv-bound commercial plane. All 176 people on board the plane — most of whom were Ukrainian, Canadian and Iranian — were killed. The Iranian government said that its military misidentified the plane for a U.S. missile. The plane went down Jan. 8, just hours after Iran launched a retaliatory missile strike on two Iraqi military bases that house U.S. troops. The attack was in response to a U.S. air strike that killed Iran's top military commander Qassem Soleimani in Baghdad the week before. A social media post on Wednesday reportedly read: “We’re coming to the streets,” and urged people to stand and protest against a “thieving and corrupt government." Immediately following Iran's admission, there was widespread unrest in Tehran. Videos surfaced on the internet of Iranian authorities beating protestors with electric batons, according to the wire service. However, protests Tuesday didn't end in violence, so it's unclear if continued protesting will lead to sustained violence. The political unrest follows the events of two months ago, when hundreds of Iranian protestors were killed by authorities after an outcry sparked by fuel price hikes.
"You Killed Our Geniuses" - Regime Crackdown Intensifies As Iranians Flood Streets In Third Day Of Protest --Despite an aggressive crackdown by the Iranian regime that reportedly included soldiers and riot police firing into crowds of civilians - in open defiance of President Trump's warning to Tehran not to "kill your protesters" - anti-government protests over Iran's mistaken shoot-down of UIA Flight 752 continued on Monday for a third straight day, following the regime's admission of responsibility on Saturday. During the protests, which erupted out of anger over the regime's initial lies about Flight 752 (it initially insisted that a "mechanical error" was responsible despite video evidence suggesting a missile strike), Iranian security forces fired both live ammunition and tear gas into crowds of angry demonstrators. Some of the video and images have shown what appear to be casualties, though death tolls and counts on the number of injured have been difficult to pin down. As Reuters explains, the protests against the regime "are the latest twist" in the Trump Administration's campaign of maximum pressure against Iran and its government. Over the weekend, President Trump tweeted a couple of messages of support for the protesters on the ground, including one tweet sent in Arabic: مشاور امنیت ملی امروز عنوان کرد كه تحریم ها و اعتراضات، ایران را«به شدت تحت فشار»قرار داده است و آنها را مجبور به مذاكره می كند.در واقع، اصلا برایم اهمیتی نداردکه آیا آنها مذاکره می کنند یا نه.این کاملاً به عهده ی خودشان است، اما سلاح هسته ای نداشته باشیدو«معترضان خود را نکشید.» https://t.co/DBGGs8QFcJ — Donald J. Trump (@realDonaldTrump) January 13, 2020 Videos posted to social media on Sunday recorded gunshots in the vicinity of protests in Tehran’s Azadi Square. The wounded could be seen being carried off on stretchers as riot police fired what looked like rubber bullets. Other videos showed riot police beating protesters with batons, while others nearby screamed "Don’t beat them!"Moreover, shouts of "Death to the dictator" could be heard in footage circulating on social media. It showed protesters shouting, directing their fury at Supreme Leader Ayatollah Ali Khamenei and the system of clerical rule."They killed our geniuses and replaced them with clerics," demonstrators chanted at a one protest outside a university on Monday, a reference to the dozens of Iranian students who were returning to school in Canada who were aboard the flight.
How fragile is Iran’s regime? Smartphone videos of anti-regime protests in Tehran circulated in global news media this weekend, after the Iranian government admitted it shot down a Ukrainian civilian airliner. The latest demonstrations followed a national wave of protests last November in which up to 1,500 demonstrators were killed. Hard information about the origins and extent of the anti-regime protests is difficult to find. But there is a good deal of evidence of extreme dissatisfaction with the regime due to economic stress. Iran’s average monthly after-tax wage was US$318.53, according to the website Numbeo, which tallies thousands of user inputs to arrive at wage and price data. Using Numbeo’s prices I constructed a monthly survival budget in US dollar equivalents: One average salary pays for a small apartment outside the center, utilities, enough calories to keep body and soul together, and bus fare, which is subsidized. Throw in cell phone service, clothing, fruits and vegetables, and one or two meat meals a month, and an Iranian couple will require two average salaries. According to official data, food price inflation was 28% year-on-year as of December. Medicine is another matter. Some imported items, for example, insulin pens, can’t be found at pharmacies in some provinces, according to a Persian-language report by IRNA. The Chancellor of the University of Isfahan told the national news agency that imported medicine such as chemotherapy drugs was in short supply, but that most other medication was available. Import controls to spare foreign exchange have put autos outside the range of most Iranians. A VW Golf costs the local-currency equivalent of $48,000, according to Numbeo, or about 14 years’ average pay. Reduced consumption has taken a toll on Iranian family life. According to the Tehran Times, citing Mohammed Javad Mahmoudi, head of the committee on population studies of the Supreme Council of the Cultural Revolution. According to Mahmoudi, the number of babies born in Iran fell by nearly 25% between 2015 and 2019. That short-term decline in absolute numbers of births is unprecedented outside of wartime. The number of Iranian women of child-bearing age increased slightly over the same period, so the collapsing birth rate clearly reflects decisions not to bear children. As I have reported in the past, Iran faces a demographic crisis over the next two decades as its population ages rapidly. There are five prime-age Iranians supporting every Iranian over the age of 65, but by mid-century, the ratio will collapse to just 1.6 to one. Strangely, the Iranian authorities have reported an increase in the “total fertility rate,” namely the estimated number of children that the average woman will bear during her lifetime. The increase evidently is due to optimistic assumptions about the future rather than observed behavior in the present.
Europe stands by Iran nuclear deal for now, defying US calls to abandon it - The leaders of Germany, France and the U.K. have said they will stand by the Iran nuclear deal, defying a call from President Donald Trump to abandon the 2015 pact. But they warned Iran that it must comply with the commitments within the Joint Comprehensive Plan of Action (JCPOA), chiefly, the non-proliferation of nuclear weapons. “Despite increasingly difficult circumstances, we have worked hard to preserve the agreement. All remaining parties to the JCPOA, China, France, Germany, Russia, the United Kingdom and Iran, with the EU as coordinator, have stated their continuing commitment to preserve the JCPOA,” the leaders of Germany, France and the U.K. said in a statement issued Sunday evening. “We urge Iran to reverse all measures inconsistent with the agreement and return to full compliance; we call on Iran to refrain from further violent action or proliferation; and we remain ready to engage with Iran on this agenda in order to preserve the stability of the region. German Chancellor Angela Merkel, French President Emmanuel Macron and British Prime Minister Boris Johnson said in the statement that “it is essential that Iran return to full compliance with its commitments under the agreement” and expressed “deep concern at the actions taken by Iran in violation of its commitments since July 2019.” Iran announced last summer that it had breached the deal by exceeding its stockpile limit of low-enriched uranium. “These actions must be reversed. We reserve recourse to all the provisions of the JCPOA to preserve it and to resolve the issues related to Iran’s implementation of its JCPOA commitments within its framework,” the European leaders said Sunday. The statement comes after EU foreign ministers held an emergency meeting on Friday to discuss heightened tensions in the Middle East and how (and whether) to keep the nuclear deal — dealt a severe blow when the U.S. withdrew from it in May 2018 and reimposed sanctions on Iran — alive. The summit came after Iranian airstrikes on Iraqi military bases housing U.S. troops, in retaliation for the U.S.′ assassination of its top military commander Qasem Soleimani. The meeting happened before Iran’s military admitted accidentally shooting down an Ukrainian passenger jet, killing all 176 passengers. Last week, Trump had said the time had come for Europe to abandon the JCPOA. Speaking Wednesday, Trump said “Nations have tolerated Iran’s destructive and destabilizing behavior. Those days are over.” “The time has come for the U.K., Germany, France, Russia and China to … break away from the remnants of the Iran deal or JCPOA.”
Putin & Merkel Urge All Parties Back To Iran Deal - Vow To Preserve By All Means - Amid the ongoing US-Iran crisis German Chancellor Angela Merkel met Russian President Vladimir Putin in Moscow on Saturday in her first visit since May 2018. Crucially it also comes the same day Iran's leadership admitted to shooting down a Ukrainian passenger plane amid launching ballistic missiles on US bases in Iraq, killing all 176 passengers and crew. Also topping the agenda for the Saturday afternoon working meeting was Syria and Libya. But the Iran nuclear deal was front and center, with both leaders agreeing they must seek to preserve the 2015 JCPOA "by all means". Merkel stressed to reporters soon after coming out of talks with Putin that “everything must be done to keep the JCPOA going” and committed to using “all the diplomatic tools to help this agreement.” She explained further, "It is not perfect but it is still an agreement and it involves responsibilities for all the parties involved. And we want to keep it." “We agreed that we should do anything to preserve the deal, the JCPOA. Germany is convinced that Iran should not acquire or have nuclear weapons," Merkel said during a joint press conference with Russian President Vladimir Putin. This after within the past two weeks as Washington and Tehran essentially enter open war, Iran's leaders have declared they consider "no limits" are currently in place on their nuclear energy program, which they've said remains for peaceful purposes. Putin also said the “tremendously important” deal must be preserved and that all parties must “come back to the deal” in statements chiefly aimed at the United States. Putin said to reporters, according to the early Russian media translation: "After the US refused to abide by the agreement, Iran announced suspension of its obligations as well. I would like to underscore that these obligations were voluntarily embraced by Iran. Iran is ready to come back to full compliance with the JPCOA."
Europeans trigger dispute mechanism in urgent bid to save Iran nuclear deal - — After more than 18 months of sticking up for the Iran nuclear deal after the U.S. administration left it in May 2018, European Union signatories have triggered a dispute mechanism in the accord over Tehran’s suspension of compliance. France, Germany and the U.K. (the E3) in a joint statement informed the EU on Tuesday that they had set off the mechanism, which they say is aimed at saving the deal, also known as the JCPOA (Joint Comprehensive Plan of Action). The motion does not reimpose sanctions; rather, it appears to allow the E3 to officially “register our concerns” that Iran is not meeting its commitments under the deal. What concrete consequences the mechanism actually has is unclear. Iran responded by dismissing the European measure as “passive,” with Iranian Foreign Ministry spokesman Abbas Mousavi saying it “practically” is not a new measure. Still no sanctions “We do not accept the argument that Iran is entitled to reduce compliance with the JCPoA,” the statement read. “Iran’s actions are inconsistent with the provisions of the nuclear agreement and have increasingly severe and non-reversible proliferation implications.” The statement went on to say that the E3 “have therefore been left with no choice, given Iran’s actions, but to register today our concerns that Iran is not meeting its commitments under the JCPoA and to refer this matter to the Joint Commission under the Dispute Resolution Mechanism” set out in the agreement. At the same time, the three countries stressed their commitment to upholding the deal and their desire for a diplomatic solution.
Trump’s Iran adventure has Japan over a barrel - Of all the things Shinzo Abe thought might undo his legacy as economic savior, Iran may well have been the furthest risk from the Japanese Prime Minister’s mind. But less than two weeks into 2020, the specter of renewed chaos in the Middle East is upending the calculus in Tokyo. Japan limped out of 2019 as trade-war headwinds slammed exports. It barely avoided a recession, imperiling its longest expansion since the 1980s.Now, Tokyo confronts the risk of skyrocketing oil prices as US President Donald Trump ratchets up tensions with Iran.Energy prices are surprisingly stable following the Trump-ordered assassination of Qasem Soleimani, the de facto commander of Iranian expansionist efforts in the Middle East. It is unclear if this stability will last.That puts Asia’s energy-hungry manufacturing powerhouses – notably China, Japan, and South Korea – in harm’s way.These are the dynamics wrecking Abe’s 2020. The first – the shadow of recession – can be addressed with government stimulus moves. The $121 billion spending jolt that Abe unveiled last month will paper over many a crack.It is the second that presents a two-pronged challenge, and an unpredictable one at that. On the one hand, Japan’s economy is uniquely vulnerable to a surge in oil prices, particularly in the Middle East. Oil stands at the center of Japan’s energy mix, accounting for 76% of all sources. And nearly 90% of Japan’s oil imports come from the Persian Gulf. This leaves Japan over a proverbial barrel should Middle Eastern hostilities escalate and unleash fresh energy-market chaos. Energy has become an increasingly complicated – and contentious – topic for Japan. Since the 2011 Fukushima nuclear crisis, the majority of its 54 nuclear power plants have been idled. That has left Tokyo importing more and more coal, increasing its carbon footprint. At present, coal accounts for 17% of the mix. The next largest source is hydroelectric at 4.4%, followed by liquified natural gas at 1.6%, renewables at 1% and nuclear at 0.6%. Japan, in other words, is about 94% dependent on fossil fuels. Fossil fuel dependency makes Japan’s economy increasingly sensitive to oil spikes. The World Bank sees Japan growing 0.7% this year, which doesn’t leave much of a cushion should Trump intensify his trade war. Odds are, he will amid anger over impeachment and election-year wrangling. What better way to change the headlines than slapping new taxes on China or auto imports?
US Still at Risk of Iran Retaliation on Oil and Other Fronts - by Yves Smith - Overmuch has been made of US claims to energy independence and how that reduced US exposure to Iran using oil infrastructure as an avenue of retaliation. The fact that US gas prices have increased after perceived or actual threat to Middle Eastern supplies shows that the US is far from decoupled from the Gulf States. Two new articles, one at Bloomberg, the other at OilPrice, explain how the US still depends on Middle Eastern oil. The OilPrice story also describes how Iran and its allies have many other Middle East targets for missile and cyber attack, such as water infrastructure and desalination and power plants. The fallacy of much of the commentary on US energy is to equate being a net energy exporter with energy independence. If you instead look at gross flows, the US still depends on Middle Eastern oil, albeit not as much as in the past, and that situation will not change soon. The Bloomberg story by Julian Lee makes no bones about its position: Trump Is Wrong. The U.S. Does Need Middle East Oil. A key observation is that oil is not all that fungible. The US is a big consumer of the light, sweet crude that is well suited for refining into gasoline. That comes out of Saudi Arabia and Iraq (if their oil infrastructure were in better shape). Even though US imports of Middle Eastern crude have fallen thanks to the shale oil boom and now account for only 5% of the oil shipped through the Strait of Hormuz, also making the US the #5 importer of that oil, it’s a misperception to think the US isn’t in need of Middle Eastern oil: Lee at Bloomberg also points out that Gulf Coast refiners, who had tuned their operations to process heavy, sour crude (think Venezuela but also Iran and other Middle East exporters ex the Saudis). Since 2012 have been switching to lighter, sweet shale gas, but many still process heavier crudes. And those refiners even more than ever look to the Middle East: And with tension now flaring with Iran, the fact that there are fewer sources from which to import the heavy, sour crude (containing high concentrations of sulfur) on which Gulf coast refineries depend is coming into relief. The U.S. imposed sanctions on Venezuelan oil exports in January 2019 and Mexico and Colombia are facing declining output as a result of a lack of new investment. For now, while Canada remains the biggest supplier to the U.S., the Middle East delivers most of the rest. Dr. Cyril Widdershoven at OilPrice adds that cheery OPEC reassurances that it could handle any supply hiccups don’t align well with facts: The spare capacity of OPEC is at present almost totally in the hands of two main players, Saudi Arabia and the UAE, while the rest of the members are struggling to reach even their own set targets. In case of a military confrontation between Iran (or proxies) and the US, a real possibility exists that total OPEC spare capacity is taken out. No other producer could substitute a possible loss of Saudi oil production. Dr. Widdershoven dismissed the notion that Iran might choke the Strait of Hormuz as riskier for Iran than its opponents.
‘Danger tomorrow’: Iran’s Rouhani makes veiled threat to US and EU troops in Middle East - In an angry speech on state television, Iranian President Hassan Rouhani lashed out at the U.S. and Europe for its presence in the Middle East and for what he described as the latter’s failures in upholding the 2015 Iranian nuclear deal. U.S. troops are “insecure” in the region today, and EU troops “might be in danger tomorrow,” Rouhani declared, according to a Reuters translation, marking the first time the leader has directed a threat toward European forces in the region. He demanded the U.S. leave and accused it of making the region insecure, saying it should “apologize to Tehran” for its “previous crimes.” The U.S. has significantly increased its troops presence in the Gulf in the past year as shipping and oil facilities have come under fire from attacks blamed on Iran, which Tehran denies. The U.K. has about 400 forces in Iraq, spread around Irbil, Baghdad and Taji, all locations that have been targeted by Iraqi Shiite militias backed by Iran’s Quds Force, the external operations wing of the Islamic Revolutionary Guard Corps. EU forces are also stationed in the Gulf Cooperation Council (GCC) countries, and France and Britain have small numbers of special forces in Syria. A number of EU countries have personnel in Operation Inherent Resolve, the anti-IS coalition, stationed in Iraq. Former Quds Force commander Qasem Soleimani was killed in a U.S. drone strike on Jan. 3, the most dramatic escalation between Washington and Tehran in a series of tit-for-tat attacks. Western forces and embassies in the region have been on high alert since then
Reading Sun Tzu in Tehran - - Iran is not done. General Hajizadeh, Commander of the IRGC Aerospace Force, said in a briefing yesterday that the strike “was the starting point of a great operation”. He also underlined that “the strikes were not meant to cause fatalities: We intended [rather] to deliver a blow to the enemy’s military machine”. And the Pentagon is saying, too, that Iran intentionally missed US troops at the bases. This is tantamount to the Pentagon admitting that Iran can land missiles with extreme accuracy over a distance of several hundred miles – and further, this occurred with not one missile being intercepted by the US forces. To completely avoid targeting soldiers at a large military base is no mean feat – it suggests an accuracy within a meter or two – not ten meters – for Iranian missiles. Isn’t this the point? It suggests that advances in Iran’s guidance systems can land missiles with extreme precision.. Haven’t we seen something similar happen recently in Saudi Arabia (Abqaiq)? And was it not clear from Abqaiq that highly expensive US air defence systems do not work? The IRGC satisfactorily have demonstrated that they and their allies can penetrate US manufactured air defence systems, using domestically produced ‘smart’ missiles, and by using their electronic warfare systems. The US bases around the region – in short – now represent vulnerable US infrastructure – and not strength. Ditto for those expensive carrier battle fleets. The Iranian message was clear and very pertinent to those who understand (or want to understand). To others, less strategically aware, it might seem that Iran pulled its military punch, and showed weakness. Actually, when you have just demonstrated the ability to upend the military status quo, there is no need for a hail of trumpets. The landing of the message itself is the ‘blow’ to a ‘military machine’. Neatly calibrated: it avoided head to head-on war. Trump stood down (and claimed success). So then, is it all over – all done and dusted? Finished with? Not at all. Both the Supreme Leader and Gen. Hajizadeh said (effectively) that the strike represented an outset – ‘a beginning’. But much of the MSM – both in the West and some in Israel – lend a cultural ‘tin ear’ towards how Iran manages asymmetric war – even when it is spelled out explicitly. Asymmetric warfare is not a ‘dick swinging’ exercise. It is more David and Goliath. Goliath can crush David with a blow from his clenched fist, but the latter is nimble; quick on his feet, dancing around the giant – just out of his reach. David has stamina, but the giant lumbers heavily around, and is easily angered and exhausted. Eventually, even a well-aimed pebble – not even a Howitzer – brings him down.
Iranian Military Now Claims US Cyberattack Brought Down Passenger Plane -The Iranian military is now blaming the US (again) for the downing of Ukrainian International Airlines Flight 752, after it admitted that IRGC commanders shot the plane out of the sky last week, and in the wake of a new video emerging showing a SECOND missile was fired at the civilian airliner.Iran Guardian Council chairman Ahmad Jannati stated Wednesday that “enemy sabotage” cannot be ruled out, while Brigadier General Ali Abdollahi directly suggested that US military forces hacked Iran’s radar systems to make it appear that the airliner, containing 176 people, was an incoming missile.Abdollahi also seemed to suggest that the US military hackers could have actually shot down the plane as part of a cyber attack to make Iran look bad, according to the report. After initially claiming “mechanical error” caused the plane to crash, then admitting they shot it down ‘by mistake’ after evidence of a missile strike could no longer be denied, Iran has now pivoted back to directly blaming the US.There is no evidence that the US took any military or other action in Iran on the evening the airliner was struck.Iran’s flip-flopping comes after intense protests over the airliner downing and attempted cover-up, and the emergence of a new video showing a second ‘kill shot’ missile was fired, throwing the ‘mistake’ e xplanation into serious doubt.
More Rockets Hit Iraq Air Base Housing US Troops - At least six mortar shells fell inside the Balad air base north of Baghdad on Sunday, wounding four Iraqi soldiers, Iraq's military said. The base, which lies about 80 kilometers (50 miles) north of the capital, also houses US troops, but most of the Americans stationed there had already been pulled out amid rising tensions in the region between the US and Iran. "There are American experts, trainers and advisers at the base,'' said one Iraqi defense official. Defense officials would only speak to the press on condition of anonymity. US Secretary of State Mike Pompeo said he was "outraged" by reports of the attack. "These continued violations of Iraq's sovereignty by groups not loyal to the Iraqi government must end," he added in a second tweet. Read more: Why the US and Iran are not at war A statement from the Iraqi military said eight Katyusha rockets had been fired at the Balad base in Sunday's strike, hitting the runway and gate. There has been no claim of responsibility for the attack. One air force officer and three enlisted men, all Iraqis, were wounded, but none were killed.
US Troops Forced to Hide in Saddam-Era Bunkers During Iran’s Missile Attack— US troops were ill-prepared to fend off Iran’s ballistic missile attacks last week, with American soldiers forced to take cover in bunkers built by Saddam Hussein’s administration, CNN reported. While the US had built its own bunkers at the Ain al-Asad airbase, those shelters were not built to deflect long-range missiles that Iran fired, CNN said, citing testimony from military personnel. “You can defend against (paramilitary forces), but you can’t defend against this,” Captain Patrick Livingstone, the US Air Force Security Forces Commander on the base, told CNN. “Right now, this base is not designed to defend against missiles.” Iran’s attack last week came in response to the assassination of Qassem Soleimani, Iran’s top general. No casualties were reported during the retaliatory strikes, but 10 of Iran’s 11 missiles targeting the base hit, managing to “shred sensitive US military sites” CNN said. A special forces compound, two hangars, and the US drone operators’ housing unit were destroyed. Troops and personnel at the base were reportedly made aware of Iran’s plans to attack the base several hours before the strikes took place, CNN reported, giving troops plenty of time to take cover. Most of the base had been on lockdown for around two hours before the first missile hit, the news agency said. But the US had not built structures on the base, one of the oldest and largest in Iraq, to protect against a large-scale missile attack like the one Iran had planned. US troops who had been at the base the night of the strikes said they were not certain the bunkers would hold up under attack. “I was sitting in a bunker and I was like man, maybe I made the wrong decision [to come down here],” Lieutenant Colonel Staci Coleman, one of the team leaders who moved troops into one of the Saddam-era bunkers, told CNN. “About 10 minutes, after I said that to myself, it went boom boom boom boom boom and I said well there’s my answer.” “The whole ground shook. It was very loud,” she said. “You could feel the blast wave in here. We knew they were close.”
At Least 11 US Troops Wounded in Iran’s Jan 8 Missile Attack on US Base in Iraq— — Though President Trump has said that there were no American casualties in Iran’s missile attack on the Ayn al-Asad airbase, the US military now says that 11 troops actually were taken out of the base for treatment after the strike. U.S. defense and military officials have confirmed to Defense One: “Nearly one dozen American troops were wounded in Iran’s Jan. 8 missile attack on Iraq’s al-Asad air base. This week, they were medically evacuated to U.S. military hospitals in Kuwait and Landstuhl, Germany, to be treated for traumatic brain injury and to undergo further evaluation.” Iran attacked Ayn al-Asad in retaliation for the US assassination of Gen. Qassem Soleimani. The Iranian government gave the US and several other nations advance notice to try to reduce the possibility of casualties. It is unclear why the Pentagon went along with the reports of no casualties for so long before coming out with this. It may suggest they were trying to help with cooling down tensions by not heavily publicizing it. Troops took cover before the attack, and were subsequently not hit. The 11 US troops who needed to go to treatment showed symptoms of a concussion owing to the blast. CENTCOM confirmed that the troops were taken for “follow-on screening” as a measure of caution. While concussions potentially have serious long-term ramifications, the CENTCOM comments seemed to downplay that risk, saying they expect those 11 troops to return to Iraq as soon as they are deemed fit for duty.
Iraq now has an opportunity to create more independence from Iran, Atlantic Council says - The death of Iran’s top general has created a chance for Iraq to gain more independence from Tehran, the chief executive of a think tank told CNBC this week. “I think the Iraq situation...is maybe the most underestimated of all the things we’re looking at,” Frederick Kempe, president and CEO of the Atlantic Council, said on CNBC’s “Capital Connection” on Monday. “There’s actually an opening for Iraq to create more independence for itself, from Iran,” he said. “That’s what I’d be watching.” His comments came amid heightened tensions in the Middle East following an American airstrike in Iraq that killed Iran’s top commander Qasem Soleimani. Tehran retaliated by attacking U.S. targets in Iraq, but both sides now appear to have backed away from military actions. “If you listen to some members of the U.S. government, they believe that Iraq over time has fallen more and more under the sway of Iran,” he said. America has been trying to push Iraq toward being more energy independent, but faced opposition from two individuals, he added. “One of them was named Soleimani, one of them was named Muhandis,” he said, referring to Iraqi militia leader Abu Mahdi al-Muhandis who was killed in the same airstrike. “They’re both gone.” ″(The infrastructure and militia forces are) still all there, but the leadership that was so crucial is gone,” he said. The prospect of Iraq shaking off Iranian influence would decrease, however, if U.S. forces leave, he predicted. Iraq’s prime minister last week asked the United States to start working on withdrawing troops from the country.
'Keep your war away': Iraqis revive protests amid US-Iran tension - - Thousands of protesters demanding an overhaul of Iraq's political system turned out in cities across the country on Friday, in the first mass demonstrations since the US assassination last week of Iranian commander Qassem Soleimani and Iraqi militia leader Abu Mahdi al-Muhandis. Organisers had called for a million-person march against foreign interference in Iraq's affairs, and in Baghdad's Tahrir Square, demonstrators continued to arrive from across the country late into the night. Protesters took aim at foreign interference in Iraq, after a long week in which tensions between the United States and Iran played out extensively on Iraqi soil. The demonstrations came as caretaker Prime Minister Adel Abdul Mahdi asked US Secretary of State Mike Pompeo to send a delegation to begin discussions over the withdrawal of US troops from Iraq, in line with a vote by Iraq's parliament on Sunday, two days after the US air strike that killed Soleimani, al-Muhandi and others near Baghdad's international airport. The US State Department rejected Abdul Mahdi's request. In the capital's Tahrir Square, scores of young men climbed the Turkish Restaurant, a half-constructed high-rise that has become a monument of the revolution, for panoramic views of the crowds and into the Green Zone. Atop the building, two young men unfurled a banner which read "Keep your war away from Iraq".
Iraqis to the United States: What Part of “Go Home” Don’t You Understand? --Iranian forces launched more than a dozen ballistic missiles against two military bases housing US troops in Iraq early hours of Wednesday morning. The al-Assad airbase in western Iraq was hit by 17 missiles, and 5 targeted at a base in the northern Iraqi city of Erbil. No US casualties were immediately reported.Iran’s supreme leader, Ayatollah Ali Khamenei, called the attack a “slap in the face” of the US, and observers seem to question whether the attack was designed to kill or inflict casualties, or was it carefully orchestrated to produce closure to a situation which could have escalated into a regional or perhaps world war. Iraqi Prime Minister Adel Abdul Mahdi said he was informed of the attack by Iran ahead of time, which acted as a safety valve after he, in turn, informed US commanders. Iraqi militias may now begin attacks of revenge for the US assassination of the Iraqi militia commander Abu Mahdi al-Muhandis, who died alongside Soleimani in the drone strike on Friday. Iraqi militia leader Qais al-Khazali said today his group’s retaliation should be “no less than the size of the Iranian response.” Al-Muhandis was the deputy head of the Popular Mobilization Forces (PMF), an Iraqi militia group that is an official component of the Iraqi armed forces. Previously, the US had attacked Iraqi PMF troops in Qaim and killed 24 Iraqi soldiers and wounded dozens more. The Iraqi military, militias, and government consider the recent US attacks on Iraqi troops and leaders on Iraqi soil as an act of aggression and more than enough reason to request the US military leave Iraq.
US Prepares To Cut All Military Aid If Iraq Asks Troops To Leave - Days after the Soleimani assassination and a move in Iraq's parliament to begin the process of expelling American forces from the country, Trump issued threats of severe economic reprisal against Baghdad should it move forward with booting US troops. "We have a very extraordinarily expensive air base that’s there. It cost billions of dollars to build. Long before my time. We’re not leaving unless they pay us back for it," he said at the time in an initial veiled threat.And now the US State Department has confirmed it and the Pentagon are preparing to cut all $250 million of foreign military aid for Iraq from the 2020 military aid budget already approved. Further they've already requested the budged office should prepare to additionally cut $100 million from the 2021 request. There are currently some 5,300 American soldiers stationed in Iraq, ostensibly as part of the 'anti-ISIL coaltion' — however Pentagon priorities have shifted to "curtailing Iran" in the region after the dramatic recent events which have seen the US and Iran clash both directly and indirectly via Iraq's paramilitary Shia proxies. The Wall Street Journal reports that while no final decision to cut the aid has been made, emails confirm it's being discussed and planned for at the highest levels: The State Department and the Department of Defense have discussed the military assistance funds in emails reviewed by The Wall Street Journal. The emails indicate that the State Department’s Bureau of Near Eastern Affairs is working to cut all $250 million in funds under the U.S. foreign military financing program for Iraq for the current fiscal year. As a reminder of where things stand and America's "popularity" or lack thereof inside Iraq, parliament already voted to expel US troops and all foreign forces in a clearly decisive 170-0 vote. However, that vote only began or initiated the political process. Since 2017 Washington has given $250 million annually in military aid to the Iraqis, most of which goes back into purchases of US defense hardware, as well as training and other military support efforts. "Cutting or reallocating the military-financing funding, which is appropriated by lawmakers to allow Iraq to purchase American military equipment, would require approval from Mr. Trump, as well as congressional notification, and the State Department is currently working on all necessary steps, the emails indicate," the WSJ report continues.
Could ISIS Take Control Over Iraq's Largest Oil Field? - As always, it’s the fear of sanctions that provides the leverage Trump seeks in this cat-and-mouse game with Iran. And this time, the leverage is over Iraq, which would like to see both American and Iranian forces out of the country, for obvious reasons. There is nothing ISIS would love more than this. It would also devastate Iraq because the sanctions threatened would include blocking access to Iraq’s U.S.-based account where all the oil revenues are kept. That threat stands if Iraq moves to kick U.S. forces out of the country.That would mean victory for Iran (temporarily). Kicking out Iranian forces is not nearly as simple because the line between state and non-state actors is blurred, at best. A few weeks ago, a U.S. drawdown of military forces in Iraq was already expected, but that now seems unlikely because of the implications. The very military base that Iran attacked following the assassination of General Soleimani was already preparing for a drawdown. In addition to the threat of sanctions on oil money, a U.S. withdrawal would likely open the door for an ISIS return. There is no consensus on this question, other than the fact that no one wants Iraq to be the proxy battleground between the United States and Iran. It’s a fair point, and Iraqis have had a very difficult time enjoying anything close to sovereignty since the fall of Saddam Hussein. While the Iraqi parliament has voted for U.S. troops to leave, they do not represent a unified voice. The Sunni elements of parliament did not participate in the vote. Neither did the Iraqi Kurds. Shia factions in Iraq are, of course, pushing for a U.S. withdrawal, but the Sunnis and Kurds see this as a dangerous opportunity for pro-Iranian Shia factions to take even more control of the central government in Baghdad.
Israel's Hand in the Soleimani Assassination -- Once again, it looks like Israel has got its way when it comes to America's dealings with Iran. According to the Times of Israel, Israeli intelligence played a key role in the extrajudicial assassination of Iran's Qassem Soleimani. Here is the report: […] This tells us that not only is Washington using this as a "wag the dog" moment with the purpose of distracting Americans from the ongoing impeachment circus but that Tel Aviv is also in on the act in yet another attempt to distract Israelis from the never-ending Benjamin Netanyahu legal quagmire. According to Reuters, Syrian and Iraqi informants are suspected of providing the information that led to Soleimani's demise when they reported Soleimani's secret flight from Damascus to Baghdad which allowed the Americans to confirm the arrival of Soleimani's Cham Wings Airlines Airbus A320 in Baghdad. His convoy of armoured vehicles was targeted by Hellfire missiles fired from an American drone as he left the airport at 12:55 am local time. It was Israel's intelligence community that confirmed the validity of Soleimani's arrival and whereabouts. Just in case you were curious, here is a video showing the type of damage that a drone-launched Hellfire missile can do to a vehicle:
Israel confiscates sole medical vehicle serving 1,500 Palestinians – Israeli occupation forces have confiscated the only vehicle available to a medical team serving the needs of some 1,500 Palestinians in an isolated region of the southern West Bank, reportedHaaretz.According to the paper, this is the second time that the vehicle – which serves the residents of Masafer Yatta in the south Hebron hills – has been seized within a year, “cutting off healthcare to an isolated and impoverished population” living inside an Israeli military firing zone.The medical team make weekly visits to the area’s Palestinian communities, which lie roughly one hour’s drive on dirt roads from the nearest town of Yatta. The jeep in question “is the only vehicle available for providing medical services to these communities”. Last Thursday, Haaretz reported, Israeli occupation forces intercepted the medical team at Khirbet Al-Majaz, claiming that they were not allowed there “without prior coordination”. The patrol then impounded the jeep and held the medics for half an hour. In February 2019 the vehicle was confiscated “under similar circumstances”, stated the paper, and only returned six months later after the medical team paid a 3,000 shekel ($865) fine. On that occasion, the team were unable to provide medical care for the entire six months. The Israeli military commented that “the vehicle was impounded by supervisors at the Civil Administration since it was traveling in a fire zone, a forbidden area for vehicles by law”.
Israel Bombs Gaza Strip in Response to Incendiary Balloons (MEE) — The Israeli military said an attack helicopter struck a Hamas target in the northern Gaza Strip late Thursday in response to the launch of incendiary balloons into Israeli territory earlier in the day, the Associated Press reported.“A short while ago, an attack helicopter struck infrastructure used for underground activities” of Hamas in the northern Gaza Strip, an army statement said, according to AFP.It said the strike was in response to balloons with attached explosive devices that were floated across the separation fence during the day. Such balloons are sometimes used to try and start fires in the Israeli farmlands and neighbourhoods near the border.Israeli police said the balloons touched down in southern Israel and a bomb squad was dispatched. Police said there was an explosion, but there were no injuries, AP reported.A security source in the Palestinian enclave confirmed the strike had hit a base belonging to the military wing of Hamas, with no injuries reported.On Wednesday evening, Israeli forces had also struck Hamas targets in Gaza in retaliation for four rockets fired from the strip. The last time Palestinians fired rockets at Israel was about three weeks ago, when Prime Minister Benjamin Netanyahu was attending a campaign event in the southern port city of Ashkelon, Haaretz said. The rocket fire forced Netanyahu to leave the stage mid-speech and seek shelter.
UN’s Warning that Gaza Will Not Be a “Liveable Place” by 2020 Has Been Realised - In 2012, the United Nations published an alarming report on the future of the Gaza Strip warning that by 2020, without urgently needed remedial action, the territory would no longer be a ‘liveable place’. The report added: ‘There will be virtually no reliable access to sources of safe drinking water, standards of healthcare and education will have continued to decline, and the vision of affordable and reliable electricity for all will have become a distant memory for most’. These dire forecasts of a creaking infrastructure unable to meet the needs of two million Gazans have been sadly realised. According to Save the Children, 90% of Gaza’s drinking water is unfit for human consumption, electricity is available for just 2-4 hours per day, water-borne diseases are spiking, health and emergency services are breaking down and fresh food is unavailable because of a lack of refrigeration. With over 108 million litres of untreated sewage discharged daily into the Mediterranean Sea, over 60% of the sea is contaminated and the ground water increasingly compromised with pollutants. Gaza has truly become an unliveable place and, yet, two million Gazans are forced to live in what is famously described as the world’s largest open air prison. The primary cause of this ‘unliveable’ environment is a highly restrictive Israeli blockade, now in its 13th year, which has reduced Gaza to the point of ‘systemic collapse’. Ostensibly imposed on the basis of a security protocol following the election of a Hamas government in Palestinian elections in 2006, Amnesty International believes that Palestinians in Gaza are being ‘collectively punished’. What distinguishes the humanitarian crisis in Gaza from the disasters and emergencies that normally push civilian populations to the edge of catastrophe, is that it is not the result of a hurricane, flood, tsunami, drought or famine but a human-made policy that is entirely avoidable. The blockade has choked off Gaza’s economy, described by the UN as ‘fundamentally unviable’, given tight restrictions on the trade of goods and services. However, the effects of the blockade have been exacerbated and compounded by other factors not foreseeable in the 2012 report. In October 2014, the Egyptian-controlled Rafah Crossing to the south of Gaza was effectively closed by the new military ruler, President Abdel Fatah el-Sisi, who also severed the economic lifeline of smuggling tunnels between Gaza and Egypt. Also in 2014, Israel launched Operation ‘Protective Edge’ in Gaza, its third military operation in the territory since 2007, which resulted in 2,251 Palestinian fatalities, of whom 1,462 were civilians and 551 children; six Israeli civilians and 63 troops were killed in the conflict. Gaza’s civilian infrastructure was also greatly diminished with 18,000 housing units damaged or destroyed, together with several hospitals, clinics and schools.
200 Palestinian children arrested by Israel forces in Jerusalem neighbourhood – Israeli forces have detained an estimated 200 Palestinian children in the Issawiya neighbourhood of occupied East Jerusalem over the last few months, in many cases violating their basic rights. According to data from the Association for Civil Rights in Israel (ACRI), reported by Haaretz, more than 600 residents have been arrested since the launch of regular police raids in Issawiya, with residents and lawyers saying that “about a third of those who have been held are minors”. The report added that these raids have been characterised by “the violation of the rights” of detained Palestinian children, including “the use of force, night-time arrests, questioning not in the presence of their parents, rides in patrol cars for intimidation and unnecessary handcuffing”. ACRI has stated that the Israeli police “systematically violate the rights of minor suspects” in Issawiya, adding that while “the law may allow the police to not follow these rules in extreme cases”, it is “unfeasible that such exceptional circumstances existed in all these cases and in any case the police have never presented evidence of such a need”. ACRI’s report cites a number of disturbing example, including the arrest three weeks ago of an 11-year-old boy (the age of criminal responsibility is 12). READ: Israel arrests mother, 12-year-old son in Jerusalem “The police officers put him in a police car, took him for a ride around the neighbourhood and then took him to the police station,” Haaretz reported, adding that in “a video clip of the arrest spread on social media, the child’s great fear and anxiety [were] on display.” When Samar, the boy’s father, was summoned to the police station, he was told that his son had been throwing stones. The policeman showed me a video and said that’s my son, and I told him it’s not him. Only then did they look and it turns out there was nothing. They released him Samar said.
Turkey Muscles-In On Israel-Greece-Cyprus EastMed Gas Pipeline Deal - Israel, Greece and Cyprus have signed an agreement for a pipeline project to ship natural gas from the Eastern Mediterranean region to Europe. The deal comes amid increasing tensions with Turkey as Ankara seeks to expand its claims over gas-rich areas of the Mediterranean Sea. Israeli Prime Minister Benjamin Netanyahu, his Greek counterpart Kyriakos Mitsotakis and Cypriot President Nicos Anastasiades, along with their energy ministers, signed the so-called EastMed pipeline deal in Athens on January 2.The 6-billion-euro ($6.6 billion) project envisages the construction of a 1,900-kilometer (1,180-mile) undersea pipeline that would carry up to 20 billion cubic meters of gas a year from Israeli and Cypriot waters to Crete and then on to the Greek mainland. From there, the gas would be transported to Italy and other countries in southeastern Europe.Israel, Greece and Cyprus hope to reach a final investment decision by 2022 and have the pipeline completed by 2025. The EastMed project, which would bypass Turkey, could eventually supply up to 10% of Europe's natural gas needs.The signing of the EastMed pipeline project came a month after Turkey and Libya reached a bilateral agreement on maritime boundaries in the southeastern Mediterranean Sea. The deal, signed on November 27 by Turkish President Recep Tayyip Erdoğan and the UN-backed leader of Libya, Fayez al Sarraj, attempts to redraw existing sea boundaries so that Libya ostensibly can claim exclusive rights over 39,000 square meters of maritime waters that belong to Greece.The bilateral agreement — which establishes a new Turkey-Libya economic zone that the EastMed pipeline would now have to cross — appears aimed at giving Turkey more leverage over the project. Referring to the Turkey-Libya deal, Erdoğan said:"Other international actors cannot conduct exploration activities in the areas marked in the Turkish-Libyan memorandum. Greek Cypriots, Egypt, Greece and Israel cannot establish a natural gas transmission line without Turkey's consent." In mid-December, the Turkish Foreign Ministry reportedly summoned Israel's top diplomat in Ankara to inform him that Israel's plan to lay down a natural gas pipeline to Europe would require Turkey's approval.
Turkey's Underwhelming Invasion Of Libya - On January 5, President Recep Tayyip Erdogan announced that Turkey had sent troops to Libya to support the Tripoli-based Government of National Accord (GNA). No Turkish soldiers will reportedly participate in direct fighting. Instead, they will create an operation center and coordinate operations. Erdogan pointed that “right now”, there will be “different units serving as a combatant force.” So far, over 600 Turkish-backed Syrian fighters have arrived. According to media reports, the officially dispatched Turkish troops included military advisers, technicians, electronic warfare and air defense specialists. Their total number is estimated at around 40-60 personnel. A day after the Erdogan announcement, on January 6, the defense of the GNA collapsed in Sirte and the GNA’s rival, the Libyan National Army (LNA), took control of the town. Several pro-GNA units from Sirte publicly defected to the LNA with weapons and military equipment, including at least 6 armoured vehicles. With the loss of Sirte, only two large cities – Tripoli and Misrata – formally remained in the hands of the GNA. Misrata and its Brigades in fact remain a semi-independent actor operating under the GNA banner. From January 7 to January 12, when the sides agreed on a temporary ceasefire proposed in a joint statement of the Turkish and Russian presidents, the LNA continued offensive operations against GNA forces near Tripoli and west of Sirte capturing several positions there. The GNA once again demonstrated that it is unable to take an upper hand in the battle against forces of Field Marshal Khalifa Haftar. The GNA formally requested “air, ground and sea” military support from Turkey on December 26th, 2019, in the framework of the military cooperation deal signed by the sides in November. Even before the formal approval, Ankara already was engaged in the conflict. It sent large quantities of weapons and military equipment, including “BMC Kirpi” armoured vehicles, deployed Bayraktar TB2 unmanned combat aerial vehicles at airfields near Tripoli and Misrata, and sent operators and trainers in order to assist GNA forces. Turkey could increase military supplies, deploy additional private military contractors, military advisers and special forces units, but it has no safe place to deploy own air group to provide the GNA with a direct air support like Russia did for pro-Assad forces in Syria. Approximately 90% of Libya is under the LNA control. Tripoli and Misrata airports are in a strike distance for the LNA. Tunisia, Algeria, Niger, Chad and Sudan refuse to play any direct role in the conflict, while the self-proclaimed Turkish Republic of Northern Cyprus is still too far away. Egypt, alongside with the UAE and Russia, is a supporter of the LNA.
Pentagon Confirms ISIS Resurgent In Libya At Moment Turkey Transfers 2,000 Syrian Fighters - This might come as a surprise to the broader American public and a mainstream media which has largely ignored recent escalating events in Libya, but guess who's back? "The Donald Trump administration is seeing a “small” resurgence in the Islamic State’s numbers in Libya since strongman Khalifa Hifter began a bloody march on the capital Tripoli more than two months ago, the Pentagon’s second-ranking military official said" reports Al-Monitor's Pentagon correspondent. The Pentagon official, Vice Chairman of the Joint Chiefs of Staff Paul Selva, described the currently stalemated fight for Tripoli between Benghazi-based Gen. Khalifa Haftar and the UN-recognized and Turkey-backed GNA in the capital as giving breathing space for the Islamic State's return to the country.Within the past three years, amid the chaos in the wake of the US-NATO 2011 war which toppled Gaddafi, ISIS actually had a stronghold in the coastal city of Sirte before being booted by US-backed Libyan forces. But now, as General Paul Selva explains: “Because they’re now going after one another in the capital, it’s actually taking their attention off of IS and we’ve seen a small resurgence of those [IS] camps in the central region.” Alarmingly, per Al-Monitor's report, this gives an opening for ISIS to become a "third party" in the war:
Libya strongman Haftar agrees ceasefire after calls from Kremlin, Ankara -- Libyan strongman General Khalifa Haftar on Saturday announced a ceasefire in his months-long battle to control the capital Tripoli after calls for a truce from Russia and Turkey. The North African state has seen an escalation of the turmoil that erupted after a NATO-backed uprising killed dictator Moamer Kadhafi in 2011, with Haftar trying to capture Tripoli from Libya's UN-recognised government. Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan this week called for a truce in Libya starting Sunday from midnight, but Haftar had initially vowed to fight on. Haftar's forces on Saturday agreed to the ceasefire from midnight on Sunday (2200 GMT), but warned of a "severe" response to any violation by the "opposing camp", a reference to the Tripoli-based Government of National Accord (GNA) led by Fayez al-Sarraj. Before Haftar's statement, Putin and German Chancellor Angela Merkel met earlier on Saturday in Moscow and called for international efforts to address the crisis in Libya. Germany and Russia are both acting as mediators in a conflict Berlin has warned could become a "second Syria" and the topic topped the agenda as they met for talks at the Kremlin. Hafter's forces, who began their offensive on Tripoli in April, did not give any details in their short statement on how the ceasefire would come into effect.
Heads of Libya’s warring sides hold talks in Russia - Talks in Russia aimed at agreeing on an unconditional and open-ended ceasefire in Libya failed to achieve a breakthrough on Monday and have been adjourned for the night. The head of the UN-supported Government of National Accord (GNA), Fayez al-Sarraj, signed a draft ceasefire agreement, while Khalifa Haftar - commander of the eastern-based Libyan National Army (LNA) - requested more time to consider it. "They have a positive view of the document and asked for extra time until the next morning to decide," Russian Foreign Minister Sergey Lavrov said of Hafter and his delegation. "I hope they will make a positive decision. Russian and Turkish representatives will continue to offer their assistance." Turkey and Russia, which back opposing sides in the conflict, urged the factions on Monday to sign a binding truce to end a nine-month-old war and pave the way for a peaceful settlement. More than 280 civilians and about 2,000 fighters have been killed and 146,000 Libyans displaced since Haftar launched his assault to seize the capital Tripoli, according to the United Nations. Turkey was working to ensure the truce became permanent, President Recep Tayyip Erdogan said. Speaking alongside Italian Prime Minister Giuseppe Conte in Ankara, Erdogan said he will attend a summit in Berlin on Sunday to discuss developments in Libya, along with Conte and Russian President Vladimir Putin. "I especially hope for the signing of a permanent ceasefire agreement some time soon," Erdogan told the press conference. The Moscow talks were held a day after a ceasefire brokered by Russia and Turkey came into force in Libya. It was unclear if the two leaders al-Sarraj and Haftar would meet face to face.
Erdogan’s dream, Istanbul’s nightmare - Turkish President Recep Tayyip Erdogan is well known for his penchant for gigantic construction projects in Istanbul. Be it a new airport, Turkey's largest mosque or a tunnel that goes under the Bosporus – he has built it all within a short time. But these objects of prestige are nothing compared to his latest construction project: The Istanbul Canal.The Turkish government is planning nothing short of the creation of a second Bosphorus – a copy of the strait that meanders through the middle of the 16-million metropolis of Istanbul. To the west of the city, the artificial 45-kilometre canal is to be built parallel to the Bosphorus, linking the Black Sea with the Sea of Marmara. According to government sources, the intention is to relieve the heavy shipping traffic on the Bosphorus and to avoid accidents.Planning for the project began as early as 2011, then stagnated for years. But now the Turkish government has brought the plans to life again. Erdogan announced that tendering for construction of the canal will begin soon. The Ministry for Environment and Urban Development has examined the environmental compatibility of the construction project and assessed it as "positive".But the realisation of Erdogan's latest mega-construction project is being hampered by a shift in the balance of power in the Bosphorus metropolis in June. Since then, Social Democrat Ekrem Imamoglu of CHP has been mayor — marking the first time in 25 years that Istanbul's mayor is not part of Erdogan's AKP party. And the city's newest leader has made his opposition to the planned construction known. Imamoglu has called the project a "betrayal of Istanbul" and a "murderous project", vowing that "16 million people will resist." He has also taken political action by terminating a protocol of cooperation that the previous municipality had agreed with the government.
Are Pakistani Leaders Slaves of Arab Royals? by Riaz Haq - Are Pakistani leaders slaves of Arab Royals? Or simply doing what is in Pakistan's best interest? Why did Imran Khan not attend the Kuala Lumpur Islamic Summit that was organized by Malaysian Prime Minister Mahathir Mohammad and attended by Turkish President Erdogan and Iranian President Hasan Rouhani? Why did he yield to Saudi pressure to skip it? What are Pakistan's key economic and security interests in Gulf Cooperation Countries (GCC)? Is labor Pakistan's biggest export earning over $20 billion a year? What is the biggest export market for Pakistan's labor? What would happen if Pakistan joined Malaysia and Turkey in creating a new Muslim bloc competing with the Arab-led Organization of Islamic Countries (OIC)? Will OIC try to live up to Pakistan's expectation of a tougher stance against India's Modi vis a vis Indian Occupied Kashmir and Indian Muslims? Who makes Pakistan's foreign and security policies? How influential is Pakistani military in making these policies? Is Imran Khan free to pursue whatever policies he personally prefers? Would any other Prime Minister have pursued a different policy with GCC nations? ALKS host Faraz Darvesh discusses these questions with Sabahat Ashraf (ifaqeer) and Riaz Haq (www.riazhaq.com). Are Pakistani Leaders Slaves of Arab Royals? - YouTube
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