July’s well completions were down 80% from last July to a record low; new wells drilled also at a record low, but drilling rigs were up by 10 this week; distillate imports were at a 60 week low.
oil prices inched higher for a third consecutive week this week, as early gains on rising demand and falling supplies were largely reversed on fears of potential pandemic impacts....after rising 1.9% to $42.01 a barrel last week on falling US oil and fuel inventories, the contract price of US light sweet crude for September delivery opened higher on Monday on news that China planned to import large volumes of U.S. crude this month and next and finished the session up 88 cents at $42.89 a barrel on a media report that OPEC+ members were complying with the alliance’s production cuts and as a weaker dollar spurred a broad commodities rally...but oil prices slid early Tuesday on demand fears as the coronavirus pandemic showed no signs of letting up but recovered to close the day unchanged as traders awaited the American Petroleum Institute report Tuesday evening and the EIA report the next day, both of which were expected to show that oil and fuel inventories had fallen...US oil contracts traded lower early Wednesday on headlines of a crude inventory draw that was weaker than had been expected, but recovered to close 4 cents higher at $42.93 a barrel as a big drop in gasoline inventories alleviated coronavirus demand fears as the driving season shifted into its final weeks...however, oil prices fell more than 3% early Thursday after Reuters reported that OPEC needed to address a daily oversupply of more than 2 million barrels, and after U.S. unemployment claims rose unexpectedly, signalling a pause in the economic recovery, but then moved higher before the close as trading in the September contract expired 35 cents lower at $42.58 a barrel while the more actively traded October oil contract ended down 29 cents at $42.82 a barrel...now quoting the contract price of US crude for October delivery as the price of oil, prices resumed sliding on Friday under pressure from demand concerns as the Covid-19 pandemic continued to undermine economic growth and ended down 48 cents, or 1.1%, to finish at $42.34 a barrel as the economic recovery worldwide ran into stumbling blocks due to renewed coronavirus lockdowns, thus giving up most of its gains for the week with the October contract price finishing just 3 cents or less than 0.1% higher than the prior Friday's close...
natural gas prices also finished higher for the third straight week as record-high temperatures on the West Coast and typical August heat and humidity in the South and Southeast drove demand higher...after rising 5.3% to an eight month high of $2.356 per mmBTU last week on hot weather and on rising LNG exports, the contract price of natural gas for September delivery backed off 1.7 cents on Monday on forecasts for milder weather and lower air conditioning demand than had previously been expected...but gas prices climbed 7.8 cents to a new eight month high on Tuesday on a decline in natural gas output and an increase in LNG exports and then added nine-tenths of a cent to another eight month high on Wednesday, as LNG exports continued rising and as temperature forecasts again trended toward warmer...but natural gas prices gave up all the week's gains on Thursday in tumbling 7.4 cents to $2.352 per mmBTU as a big storage build showed that the hot weather of last week was not enough to cut the week's inventory increase to below normal levels...but that lesson was lost on traders Friday as they pushed natural gas prices 9.6 cents higher to a new 8 month high of $2.448 per mmBTU and a 3.9% gain on the week, as hot weather returned and two major storms moved towards the Gulf Coast, threatening production, LNG exports and domestic demand in the coming week....
the natural gas storage report from the EIA for the week ending August 14th indicated that the quantity of natural gas held in underground storage in the US rose by 43 billion cubic feet to 3,375 billion cubic feet by the end of the week, which left our gas supplies 595 billion cubic feet, or 21.4% greater than the 2,780 billion cubic feet that were in storage on August 14th of last year, and 442 billion cubic feet, or 15.1% above the five-year average of 2,933 billion cubic feet of natural gas that have been in storage as of the 14th of August in recent years....the 43 billion cubic feet that were added to US natural gas storage this week was more than the average 39 billion cubic feet increase that was forecast by analysts polled by S&P Global Platts, but it was less than the 56 billion cubic feet addition of natural gas to storage during the corresponding week of 2019, while it was close to the average of 44 billion cubic feet of natural gas that has been added to natural gas storage during the same week over the past 5 years..
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending August 14th indicated that despite a big drop in our oil exports, we still needed to withdraw oil from our stored supplies for the fourth week in a row and for the 6th time in the past eleven weeks...our imports of crude oil rose by an average of 109,000 barrels per day to an average of 5,730,000 barrels per day, after falling by an average of 389,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 1,006,000 barrels per day to an average of 2,137,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,593,000 barrels of per day during the week ending August 14th, 1,115,000 more 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 was reportedly unchanged at 10,700,000 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 14,293,000 barrels per day during this reporting week..
meanwhile, US oil refineries reported they were processing 14,487,000 barrels of crude per day during the week ending August 14th, 171,000 fewer 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 a net of 615,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 421,000 barrels per day more 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 (-421,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily 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....and with last week's fudge factor at +515,000, that means our week over week comparisons on oil supply & demand changes are off by more than twice as much, even as we continue to report them as an indicator of what most oil traders and analysts believe happened, since that's what affects their behavior... (for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....
further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,627,000 barrels per day last week, which was 21.7% less than the 7,186,000 barrel per day average that we were importing over the same four-week period last year....the 615,000 barrel per day net withdrawal from our total crude inventories came as 233,000 barrels per day were being pulled out of our commercially available stocks of crude oil and 382,000 barrels per day were being withdrawn from the oil supplies in our Strategic Petroleum Reserve, space in which is also being leased for commercial use....this week's crude oil production was reported to be unchanged at 10,700,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,300,000 barrels per day, while Alaska's oil production rose by 7,000 barrrels per day to 439,000 barrels per day but had no impact on the rounded national total....last year's US crude oil production for the week ending August 16th was rounded to 12,300,000 barrels per day, so this reporting week's rounded oil production figure was about 13.0% below that of a year ago, yet still 27.0% 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 80.9% of their capacity while using 14,487,000 barrels of crude per day during the week ending August 14th, down from 81.0% of capacity during the prior week, and excluding the 2005, 2008, and 2017 hurricane-related refinery interruptions, still among the lowest refinery utilization rates of the last twenty-eight years...hence, the 14,487,000 barrels per day of oil that were refined this week were still 18.2% fewer barrels than the 17,702,000 barrels of crude that were being processed daily during the week ending August 16th, 2019, when US refineries were operating at 95.9% of capacity....
with the decrease in the amount of oil being refined, gasoline output from our refineries was also lower, decreasing by 200,000 barrels per day to 9,400,000 barrels per day during the week ending August 14th, after our refineries' gasoline output had increased by 300,000 barrels per day over the prior week...with our gasoline production still recovering from a multi-year low, this week's gasoline output was 5.0% less than the 9,897,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 47,000 barrels per day to 4,742,000 barrels per day, after our distillates output had decreased by 120,000 barrels per day over the prior week... after this week's decrease in distillates output, our distillates' production was 11.2% less than the 5,340,000 barrels of distillates per day that were being produced during the week ending August 16th, 2019....
with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the 5th time in 7 weeks and for the 20th time in 29 weeks, falling by 3,322,000 barrels to 243,762,000 barrels during the week ending August 14th, after our gasoline supplies had decreased by 722,000 barrels over the prior week...our gasoline supplies decreased by more this week even though the amount of gasoline supplied to US markets decreased by 253,000 barrels per day to 8,630,000 barrels per day because our imports of gasoline fell by 466,000 barrels per day to 557,000 barrels per day while our exports of gasoline rose by 15,000 barrels per day to 809,000 barrels per day....but even after this week's inventory decrease, our gasoline supplies were still 4.1% higher than last August 16th's gasoline inventories of 234,072,000 barrels, and roughly 7% above the five year average of our gasoline supplies for this time of the year...
meanwhile, even with the decrease in our distillates production, our supplies of distillate fuels increased for the sixteenth time in 31 weeks and for the 21st time in 46 weeks, rising by 152,000 barrels to 177,807,000 barrels during the week ending August 14th, after our distillates supplies had decreased by 2,322,000 barrels during the prior week....our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 609,000 barrels per day to 3,253,000 barrels per day, while our exports of distillates rose by 108,000 barrels per day to 1,515,000 barrels per day, and while our imports of distillates fell by 100,000 barrels per day to a 60 week low of 48,000 barrels per day...after this week's inventory increase, our distillate supplies at the end of the week were still 28.7% above the 138,123,000 barrels of distillates that we had in storage on August 16th, 2019, and about 24% above the five year average of distillates stocks for this time of the year...
finally, even with the big drop in our oil exports, our commercial supplies of crude oil in storage fell for the 9th time in thirty-one weeks and for the 16th time in the past year, decreasing by 1,632,000 barrels, from 514,084,000 barrels on August 7th to 512,452,000 barrels on August 14th....but even after that decrease, our commercial crude oil inventories were still around 15% above the five-year average of crude oil supplies for this time of year, and 54.4% above the prior 5 year (2010 - 2014) average of our crude oil stocks for the second weekend of August, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories have generally been rising since September of 2018, except for during last summer, after generally falling until then through most of the prior year and a half, our crude oil supplies as of August 14th were 17.1% above the 437,778,000 barrels of oil we had in commercial storage on August 16th of 2019, 25.5% more than the 408,358,000 barrels of oil that we had in storage on August 17th of 2018, and 10.6% above the 463,165,000 barrels of oil we had in commercial storage on August 18th of 2017...
This Week's Rig Count
the US rig count was up for the 1st time in 24 weeks during the week ending August 21st, but is still down by 68.1% over that twenty-four week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 10 rigs to 254 rigs this past week, which was still 150 fewer rigs than the all time low prior to this year...it was also down by 662 rigs from the 916 rigs that were in use as of the August 23rd report of 2019, and 1,675 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 their first attempt to put US shale out of business....
The number of rigs drilling for oil increased by 11 rigs to 183 oil rigs this week, after decreasing by 4 oil rigs the prior week, still leaving us with 571 fewer oil rigs than were running a year ago, and less than a eighth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 rig to 69 natural gas rigs, which was also down by 93 natural gas rigs from the 162 natural gas rigs that were drilling a year ago, and was also less than a twentieth of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil & gas, two rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, and one in Sonoma County, California... a year ago, there were no such "miscellaneous" rigs deployed...
The Gulf of Mexico rig count was unchanged at 13 rigs this week, with 10 of those rigs drilling for oil in Louisiana's offshore waters and three drilling for oil offshore from Texas...that was 13 fewer rigs than the 26 rigs drilling in the Gulf a year ago, when 25 Gulf rigs were drilling offshore from Louisiana and one was deployed in Texas waters...while there are no rigs operating off other US shores at this time, a year ago there were also two rigs deployed offshore from Alaska, so this week's national offshore count is down by 15 from the national offshore rig count of 28 a year ago...also note that in addition to those rigs offshore, a rig continues to drill through an inland body of water in southern Louisiana this week, while a year ago there were no rigs drilling in inland waters..
The count of active horizontal drilling rigs was up by 14 to 221 horizontal rigs this week, which was still 576 fewer horizontal rigs than the 797 horizontal rigs that were in use in the US on August 23rd of last year, and less than a sixth of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...on the other hand, the directional rig count was down by 4 to 20 directional rigs this week, and those were also down by 49 from the 69 directional rigs that were operating during the same week of last year....meanwhile, the vertical rig count was unchanged at 13 vertical rigs this week, but those were still down by 37 from the 50 vertical rigs that were in use on August 23rd 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 August 21st, the second column shows the change in the number of working rigs between last week's count (August 14th) and this week's (August 21st) count, the third column shows last week's August 14th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running during the count 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 23rd of August, 2019...
while we have more changes in drilling activity this week than in week's past, the Permian basin by itself accounts for this week's change, while activiy in other basins remains relatively subdued ...checking the rig counts in the Texas part of Permian basin, we find that seven rigs were added in Texas Oil District 8, which is the core Permian Delaware, and another rig was added in Texas Oil District 7C, which corresponds to the southern Permian Midland....since the Texas Permian count has thus increased by 8 rigs while the national Permian basin rig count was up by 10 rigs, that almost certainly means that the 2 rigs that were added in New Mexico would have set up to drill in the far western Permian Delaware, to fully account for the national Permian increase...elsewhere in Texas, a rig was removed from Texas Oil District 1 while one rig was added in Texas Oil District 3, so to get to the 2 rig loss in the Eagle Ford shale we would have had to see two rigs added in one of those districts that weren't targeting the Eagle Ford, while two Eagle Ford rigs were being removed at the same time...in other states, the rig pulled out of the Williston basin had been drilling in North Dakota's Bakken, but the rig increase in northern Louisiana did not register as an increase in the Haynesville, where the other 20 rigs in that area are drilling...among natural gas rig changes, one was removed from Ohio's Utica shale and two were pulled out of Pennsylvania's Marcellus, while at the same time three natural gas rigs were added in West Virginia's Marcellus, resulting in the one rig increase in the Marcellus that you see above...the national natural gas rig count was stil down by one, however, because one of the rigs pulled from the Eagle Ford had been targeting natural gas, leaving the Eagle Ford with just 9 rigs, all targeting oil...
DUC well report for July
Monday of this past week saw the release of the EIA's Drilling Productivity Report for August, which includes the EIA's July data for drilled but uncompleted oil and gas wells in the 7 most productive shale regions....for the 3rd time in the past seventeen months, this report showed an increase in uncompleted wells nationally in July, as both the drilling of new wells and completions of drilled wells decreased by similar amounts....for the 7 sedimentary regions covered by this report, the total count of DUC wells increased by 30 wells, rising from 7,655 DUC wells in June to 7,685 DUC wells in July, which was still 8.8% fewer DUCs than the 8,429 wells that had been drilled but remained uncompleted as of the end of July of a year ago...this month's DUC increase occurred as 292 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during July, down by 32 from the 324 wells that were drilled in June and the lowest number of wells drilled in any month in the history of this report, while 262 wells were completed and brought into production by fracking, a decrease of 29 well completions from the 291 completions seen in June, and down by 80.1% from the 1,315 completions seen in July of last year, and also the lowest number of completions in one month since completions have been reported by the EIA....at the July completion rate, the 7,685 drilled but uncompleted wells left at the end of the month represents a 29.3 month backlog of wells that have been drilled but are not yet fracked, up from the 26.3 month DUC well backlog of a month ago, recogniizing that this normally indicative backlog ratio is being skewed by record low completions...
oil producing regions saw a net DUC well increase in July, while natural gas producing regions still saw a modest net DUC well decrease, even as some basins went against that overall trend....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico increased by 40, from 3,480 DUC wells at the end of June to 3,520 DUCs at the end of July, as 138 new wells were drilled into the Permian, while 98 wells in the region were being fracked....at the same time, DUC wells in the Bakken of North Dakota increased by 6, from 896 DUC wells at the end of June to 902 DUCs at the end of July, as 19 wells were drilled into the Bakken in June, while 13 of the drilled wells in that basin were being fracked...in addition, the drilled but uncompleted well count in the Niobrara chalk of the Rockies' front range increased by 1 to 484, as 16 Niobrara wells were drilled in July while 15 Niobrara wells were completed... on the other hand, there was a decrease of 6 DUC wells in the Eagle Ford of south Texas, from 1,224 DUC wells at the end of June to 1,218 DUCs at the end of July, as 24 wells were drilled in the Eagle Ford during July, while 30 already drilled Eagle Ford wells were completed...similarly, DUCs in the Oklahoma Anadarko also decreased by 6, falling from 705 at the end of June to 699 DUC wells at the end of July, as 9 wells were drilled into the Anadarko basin during July, while 15 Anadarko wells were being fracked....
among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 6 wells, from 574 DUCs at the end of June to 568 DUCs at the end of July, as 57 wells were drilled into the Marcellus and Utica shales during the month, while 63 of the already drilled wells in the region were fracked....on the other hand, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region saw their uncompleted well inventory increase by 1 to 294, as 29 wells were drilled into the Haynesville during July, while 28 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of July, DUCs in the five major oil-producing basins tracked by in this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) increased by a net of 35 wells to 6,823 wells, while the uncompleted well count in the natural gas basins (the Marcellus, Utica, and the Haynesville) decreased by 5 wells to 862 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...
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Utica Shale well activity as of Aug. 15 - Three horizontal permits were issued during the week that ended Aug. 15, and 5 rigs were operating in the Utica Shale.
- DRILLED: 153 (157 previous week)
- DRILLING: 94 (95)
- PERMITTED: 504 (506)
- PRODUCING: 2,535 (2,528)
- TOTAL: 3,286 (3,286)
Pipelines lose bid to lower tax bills, can appeal -- Akron Beacon Journal - The Ohio Department of Taxation has denied bids by NEXUS Gas Transmission and Rover Pipeline to lower their tax bills.Both pipelines ship natural gas from the Utica and Marcellus shale regions to markets in Canada and across the United States.NEXUS and Rover appealed the Department of Taxation’s valuation of their pipelines last year.County auditors use state valuations to set tax collections for school districts, townships, library districts and other entities.Based on the state’s valuations, the Rover and NEXUS pipelines, combined, were projected last year to generate $20 million in extra revenue in Stark County and lower the rates on levies with set dollar amounts.But the owners of the pipelines said the assessments were too high.The 36-inch-diameter NEXUS pipeline crosses northern Ohio, including Stark, Summit, Wayne, Medina and Columbiana counties. NEXUS is a partnership between DTE Energy and Enbridge.The state set the taxable value of NEXUS near $1.4 billion, but the owners argued for a taxable value closer to $996 million. The owners said building the pipeline cost $2.6 billion, $400 million more than planned.Rover follows a path a few miles south of the NEXUS route. Rover consists of twin 42-inch-diameter pipelines, plus connecting lines, that traverse Stark, Carroll, Tuscarawas, Harrison, Wayne, Ashland and Richland counties.Energy Transfer Partners, Blackstone Group and Traverse Midstream Partners own the pipeline.The owners sought to cut Rover’s taxable value from $3.5 billion to about $1.85 billion. The owners said the pipeline went $2 billion over budget, costing $6.2 billion.Tax Commissioner Jeffrey A. McClain denied the appeals of both pipelines on July 10. The companies have 60 days from that date to appeal to the Ohio Board of Tax Appeals. The issue ultimately could land before the Supreme Court of Ohio.
Trump administration continues push for Ohio petrochemical plant - A proposed petrochemical plant in eastern Ohio got another push from the Trump administration Thursday, with a top official saying that he’s optimistic a new partner will be found to invest in its development. Mark W. Menezes, deputy U.S. Energy secretary, visited the site of the proposed complex in Shadyside along the Ohio River. “We are all here today for the same reason: We want this project to continue moving forward,” he told local officials in prepared remarks. “We want it to move forward because it will create jobs right here in Belmont County. We want it to move forward because it will strengthen American energy security.” The fresh push comes amid uncertainty about the project’s future. A key partner in the project, Daelim of South Korea, pulled out last month, citing the economic effects of the coronavirus pandemic and oil price volatility. That has left Thailand-based PTT Global Chemical America looking for new partners on the project. “We’re very optimistic that we’ll find a replacement partner on the project,″ Menezes told The Dispatch, noting that the coronavirus has forced companies of all kinds to put off investment decisions. A Department of Energy report issued last month found that the project would be an economic boon to the region, creating 600 permanent jobs and an estimated 6,000 construction jobs. The study’s results have been disputed by others who say it didn’t fully take into account global market conditions, in which the price of plastic is dropping and there’s already a global oversaturation of ethane cracker plants and plastics manufacturing. The proposed plant would take ethane, a component of natural gas, and break it down to produce ethylene, which is used in chemical and plastics manufacturing. The plant would capitalize on the abundant supplies of cheap natural gas that has been developed in the Marcellus and Utica shale regions. A similar project is under construction in nearby western Pennsylvania.
Belmont College partners with Tri-State Energy Advanced Manufacturing (TEAM) Consortium to build skilled workforce in the tri-state region to meet increasing demand Belmont College, partnered with members of the Tri-State Energy and Advanced Manufacturing (TEAM) Consortium, are working together to build a skilled workforce for the tri-state area of Ohio, Pennsylvania and West Virginia to address the increasing skills gap between growing employer needs and education driven by the discovery of natural gas-rich Marcellus and Utica shale deposits. The tri-state region now accounts for 27% of the natural gas output in the United States - making it the third largest producer of natural gas in the world. Offering certificates and degrees in the technologically advanced energy and natural resources industry, Belmont College prepares students for in-demand careers in HVAC, Welding, Industrial Electronics, Process Control Technician, Instrumentation and Control, Civil Engineering Technology, Energy and Natural Resources, and CDL training. The new oil and gas workforce in the region has led to increased demand for CDL, Welding and Technology, and HVAC skills, leading Belmont College HVAC graduates to a 100% job placement rate at local HVAC dealers. Additionally, pending the final start date announcement which could be as early as 2021, the U.S. subsidiary of PTT Global Chemical (PTTGC America) will begin possible construction of a world-scale petrochemical complex in the Mead Township along the Ohio River in Belmont County, which will use products from the emerging oil and gas industry to product raw materials for the United States and global plastics industry. This complex would be the largest private investment project in the history of the State of Ohio with the potential to create hundreds of full-time jobs and thousands of construction jobs, many of which will utilize training offered at Belmont College.
CNX fined for 2019 shale gas blowout - CNX Gas Co. LLC has agreed to pay a $175,000 fine to settle violations related to a January 2019 Utica Shale gas well blowout in Washington Township, Westmoreland County. The very visible well drilling failure allowed gas from the Utica Shale well to flow into nine nearby shallower gas wells, causing the Cecil-based company to burn off or “flare” gas from them all to alleviate pressure at the wells. The state Department of Environmental Protection said in a Thursday announcement of the consent order and agreement with CNX that the blowout at the company’s Shaw 1G Utica well was likely caused by cracks in the well’s “casing,” a concrete sheath around the well pipe that extends underground to prevent gas from the well from contaminating shallower groundwater, rock and soil formations and nearby wells. DEP Secretary Patrick McDonnell said in the release that the department’s investigation and determination of cause will help improve drilling practices to better protect the environment. According to the state department’s release, CNX was performing hydrological fracturing or “fracking” on the Shaw well on Jan. 26, when an unexpected loss of pressure caused the uncontrolled flow of gas into shallower geologic formations and the nine nearby wells. CNX temporarily flared the wells to relieve gas pressure but didn’t regain control of the Shaw well until Feb. 4, when, the DEP said, it stopped the vertical flow of gas by pumping heavy mud into the wellbore, also referred to as “killing the well.” According to the DEP, CNX failed to use strong enough casing and other safety measures to prevent blowouts, failed to maintain well integrity and vented gas into the atmosphere. The nine conventional wells returned to normal operating pressures, and the DEP said no spills or releases of fluids to the surface were observed or reported as a result of the incident. CNX’s investigation concluded, according to the DEP, which concurred, that stress cracks in the Shaw well casing “most likely caused the incident.”.
DEP fines CNX for well failure near Westmoreland County reservoir - The Pennsylvania Department of Environmental Protection fined CNX $175,000 for allowing a gas well failure near a drinking water reservoir in Westmoreland County. The DEP and the company concluded that a casing pipe inside the well ruptured about 5,000 feet below the surface of the Shaw 1G well on Jan. 26, 2019. The rupture sent gas and fracking fluids into nearby rock layers. The gas reached surrounding gas wells, said Lauren Fraley, a spokeswoman for the DEP. “During that loss of pressure incident, gas was emitted uncontrollably into shallower geologic formations, and that resulted in communication with nine nearby conventional wells that saw some pressure changes during this incident,” Fraley said. The company flared those surrounding wells for a week to relieve the extra pressure until it could contain the gas. Fraley said there were no spills or releases of fluids. The well is near the Beaver Run Reservoir, which provides drinking water for 130,000 people. The Municipal Authority of Westmoreland County conducted numerous tests after the failure and determined water in the reservoir was not affected. The DEP says the company no longer uses the “high tensile” pipe it used at the Shaw well, and has retrofit other wells to prevent a similar accident. The DEP cited the company for violating several environmental laws and regulations, including failing to use strong enough well casing, failing to maintain well integrity, and venting gas to the atmosphere. Fraley said the DEP determined that the higher tensile casing was more susceptible to a type of stress cracking, and has shared this information with other gas companies. Brian Aiello, a spokesman for CNX, said the company was “pleased” with the investigation and that the “collaborative nature of the investigation into this matter yielded results that will further continuous improvement and innovation in CNX’s operations and that of the entire industry.” Local environmental groups criticized the DEP fine. The Westmoreland Marcellus Citizens Group said in a statement Friday the fine was inadequate to the danger posed by the well blowout and the air pollution caused by the company’s flaring activities.
Energy Transfer to deliver plan of action this week following Mariner East spill at Snitz Creek - - The Mariner East pipeline on Aug. 13 dumped 20 gallons of industrial waste into Snitz Creek, according to a notice filed later that day by the Pennsylvania Department of Environmental Protection. The spill follows a few days after a much larger accident in Chester County. A notice sent by DEP to Matthew Gordon, senior director of operations for the Energy Transfer/Sunoco pipeline project, cites the “inadvertent return of drilling fluids” into the creek in West Cornwall Township (PDF). The discharge of industrial waste into Pennsylvania waterways without a permit is a violation of the Clean Streams Law, the letter says. The letter orders Energy Transfer to document the steps taken to contain and remove the wastewater from the creek, along with “a plan for any additional remedial measures necessary to complete remediation,” by Thursday, Aug. 20. The letter also notes that work cannot resume on the project without DEP approval. “If the Department determines that an enforcement action is appropriate, you will be notified of the action,” the letter concludes. The letter was signed by Ronald C. Eberts Jr., an environmental protection compliance specialist of the department’s Conservation, Restoration, and Inspection Section, Waterways & Wetlands Program. It was copied to representatives to the Lebanon County Conservation District, the Pennsylvania Fish and Boat Commission, the U.S. Army Corps of Engineers, West Cornwall Township and several other officials of the Sunoco pipeline partnership. Earlier this month, according to a report by StateImpact Pennsylvania, Sunoco’s Mariner East pipeline construction spilled an estimated 10,000 gallons of drilling mud, or bentonite clay, into Marsh Creek and Marsh Creek Lake at a state park in Chester County. The Department of Environmental Protection shut down two underground drilling sites in West Whiteland and Upper Uwchlan townships, pending an investigation, the report said. The lake is a popular recreation site and provides drinking water for Chester County residents, although it was not immediately clear if any drinking water supplies were affected. Bentonite clay is nontoxic, but in large quantities, it can have an impact on smaller aquatic life. News of the local spill drew criticism from grassroots watchdog Concerned Citizens of Lebanon County (CCLC). In a letter to CCLC members, leaders Pam Bishop and Doug Lorenzen said a tanker truck was parked on Aug. 14 on North Cornwall Road, near the intersection with Route 72, “presumably pumping water out of the creek as part of the ‘clean up.'” They also said in the letter that, during construction of a parallel pipeline at the same site in 2017 and 2018, “there were at least seven discharges of drilling mud,” for which DEP also issued notices of violation to Sunoco.
State Hits Sunoco With $355K Penalty For 2018-19 Violations - — The Pennsylvania Department of Environmental Protection today hit Sunoco Pipeline L.P. with a $355,636 penalty for violations in eight counties between August 2018 and April 2019. The violations are related to construction of the Mariner East 2 pipeline Berks, Blair, Cambria, Cumberland, Delaware, Lebanon, Washington, and Westmoreland counties. The DEP said today the penalty was part of a Consent Assessment of Civil Penalty (CACP) signed earlier this month. "Protecting the waters of the Commonwealth is one of the top priorities of DEP and we will continue to hold polluters of those waters accountable," said DEP Secretary Patrick McDonnell. Sunoco's horizontal drilling activities resulted in unauthorized discharges of drilling fluids consisting of bentonite clay and water, also known as inadvertent returns, (IRs) to Piney Creek in Blair County; tributaries and wetlands connected to Hinckston Run, Stewart Run, and Little Conemaugh Creek in Cambria County; Letort Run and wetlands and tributaries to the Yellow Breeches Creek in Cumberland County; a tributary to Chester Creek in Delaware County; Snitz Creek in Lebanon County; a tributary to Peters Creek in Washington County; and a tributary to the Conemaugh River in Westmoreland County. As part of the agreement, DEP has assessed a civil penalty of $355,636 for the violations, which Sunoco has agreed to pay to the Commonwealth. A portion of the civil penalty, $5,912, will be paid to the county conservation districts to reimburse them for their costs incurred during their investigation of the inadvertent returns. The remaining penalty, $349,724, will be paid to the Clean Water Fund. Additional information and documents, can be found on DEP's Mariner East 2 webpage. The DEP also today issued two violations to Sunoco related to a spill and sinkhole at Marsh Creek State Park and a groundwater release on Shoen Road, both in Chester County. Related story here.
Pennsylvania fines Sunoco Mariner East 2 NGL pipe for spills again (Reuters) - The Pennsylvania Department of Environmental Protection (DEP) fined Energy Transfer LP’s Sunoco Pipeline unit again this week for spilling drilling fluid during construction of its long-delayed Mariner East 2 natural gas liquids (NGL) pipeline. The $355,636 fine assessed Thursday for violations in 2018 and 2019 was just the latest in a long series of sanctions against the company for spills and other violations of its construction permits. The biggest fine was for $12.6 million in 2018. In addition to fining Sunoco, Pennsylvania has also stopped construction work on the pipe several times in the past due to spills and sinkholes. Several politicians and local groups have long urged the state to stop work again and shut the pipe. Officials at Energy Transfer were not immediately available for comment. Since May 2017, Pennsylvania has issued 113 notices of violation to Mariner East, mostly for drilling fluid spills, including 13 so far in 2020. In its latest fine, the DEP said Sunoco’s horizontal drilling activities resulted in unauthorized discharges of drilling fluids consisting of bentonite clay and water in several streams and wetlands between August 2018 and April 2019. Energy companies use horizontal drilling to burrow under waterbodies, roads and other obstacles when building a pipeline. Mariner East transports liquids from the Marcellus and Utica shale in western Pennsylvania to customers in the state and elsewhere, including international exports from Energy Transfer’s Marcus Hook complex near Philadelphia.
Chesco Commissioners Step Up Pressure On Gov. Wolf To Stop Sunoco - — The pipeline accident at Marsh Creek Lake Aug. 10 involved a sinkhole 15 feet wide and 8 feet deep, "a mere 5-feet from the active Mariner East 1 (ME1) pipeline, which presently carries hazardous liquids," Chester County commissioners said late Tuesday. The board called on Pennsylvania Gov. Tom Wolf to stop construction of the Mariner East 2 pipeline and revoke Sunoco's authorization for construction, saying civil penalties and temporary suspensions were "no longer sufficient." Chester County's Board of Commissioners said they learned of the sinkhole incident during a telephone conference with Commonwealth officials on Friday, Aug. 14, regarding Sunoco Pipeline, L.P.'s (Sunoco) Mainer East 2 project (ME2) in Chester County.The board drafted a letter that was sent late Tuesday to Wolf, expressing grave concern about another in "a series of sinkholes showing up across Chester County." "This sinkhole is in addition to the numerous other recent sinkholes that began appearing in West Whiteland Township, Chester County in mid-June 2020. As you may be aware, a sinkhole in West Whiteland Township in 2018 exposed the ME1 pipeline and prompted the Chairwoman of the Pennsylvania Public Utility Commission (PUC) to order that the ME1 pipeline temporarily cease operations because 'permitting the continued flow of hazardous liquids through the ME1 pipeline without proper steps to ensure the integrity of the pipeline could have catastrophic results impacting the public,'" the letter stated. "Yet another sinkhole within feet of the active ME1 pipeline is alarming and deeply troubling," the commissioners told Wolf. "While we wrote to you last week asking that Sunoco's permits be suspended, after learning about this new development, it seems that civil penalties and temporary suspensions are no longer sufficient. The construction of ME2 must be stopped and the permits authorizing its construction must be revoked." "Doing anything less risks 'catastrophic results impacting the public.'"
Berkeley Solid Waste Authority turns down gas facility — The Berkeley County Solid Waste Authority adopted a motion Wednesday indicating it has no interest in having a compressed natural gas facility at the authority's Grapevine Road property. The potential for co-mingling of natural gas trucks with traffic to and from the Grapevine Road Recycling Center on Landfill Drive was the dominant safety concern, authority chairman Clint Hogbin said Thursday. The board voted unanimously to adopt a motion authorizing Hogbin to notify Mountaineer Gas Co. of its decision. The gas company is considering developing Eastern Panhandle sites where natural gas can be delivered by truck to meet peaks in local customer demand. Larry Meador, communications manager for Mountaineer Gas, said earlier this month the company has been looking at two or three potential locations to transfer compressed and liquified natural gas from trucks into the company's existing distribution system. Having multiple facilities effectively reduces the size of each facility, Meador has said. The gas company proposed putting a portable, compressed natural-gas facility off Grapevine Road for up to 18 months after first proposing a lease of up to an acre of solid waste authority property for a period of three to five years with an option to buy, according to Hogbin. The solid waste authority didn't support that proposal either, according to Hogbin. Meador had said truck deliveries probably wouldn't be needed for quite a few years if it could connect with a pipeline in Morgan County that has been proposed by Columbia Gas Transmission LLC. That pipeline connection, however, is the subject of a federal lawsuit pending before the 4th Circuit Court of Appeals in Richmond, Va. A subsidiary of TC Energy, Columbia Gas Transmission has proposed an 8-inch pipeline from existing facilities in Pennsylvania, across Washington County and the Potomac River to connect with Mountaineer Gas's new distribution pipeline in Morgan County. In its federal court appeal, Columbia Gas is challenging a district judge's August 2019 ruling that upheld the state of Maryland’s denial of an easement that Columbia Gas sought for the pipeline to travel beneath the state-owned Western Maryland Rail Trail west of Hancock. The pipeline also is envisioned to go under Cheasapeake and Ohio Canal Historical Park, which is owned by the National Park Service. In July, the company asked the Federal Energy Regulatory Commission for an extension to July 18, 2023 to complete the pipeline.
Peregrine Acquires Additional Royalties in Doddridge County - Peregrine Energy Partners has agreed to acquire producing royalties in Doddridge County, West Virginia from several private sellers. Continuing their string of acquisitions in the Appalachian Basin, Peregrine finalized the acquisition of royalties in 17 producing natural gas wells across three units under Antero Resources and Jay-Bee Oil and Gas. Antero is the largest natural gas producer in West Virginia with over 451,000 net acres in the Marcellus Shale and another 91,000 net acres in the Utica Shale. “We will continue to look for properties with a similar profile in the Marcellus; a diversified well count generating consistent cashflows with single digit decline rates under a well-capitalized, pure-play operator,” said Josh Prier, Peregrine Managing Director. Peregrine is focused on working with and providing solutions for royalty owners and their families. Throughout the acquisition period, the company worked closely with multiple related royalty owners who had inherited this asset. The family’s initial goal was to solve succession issues to avoid fractionalizing the property further. However, after learning the significant financial opportunity and tax benefit of divesting now instead of receiving the passive income over the next handful of decades, the family decided to fast-forward the income. The Texas based royalty buyer has been actively acquiring in the Marcellus Shale as well as across the country since the company’s inception. The current state of the economy and fluidity of the oil & gas industry has Peregrine committed and focused in their efforts to provide clients with reliable and valuable insight throughout their client’s decision-making process.
Mountain Valley pledges up to $19.5 million to conserve land along Appalachian Trail - The company that plans to burrow a natural gas pipeline under the Appalachian Trail is pledging up to $19.5 million to conserve land in other spots along the footpath’s route through Virginia and West Virginia. Mountain Valley Pipeline on Monday announced what it called a voluntary “stewardship agreement” with the Appalachian Trail Conservancy and The Conservation Fund. More than a year ago — when the pipeline’s path across the Appalachian Trail was still in question — Mountain Valley initiated contact with the two groups, “seeking assistance to identify and develop sustainability efforts that would complement MVP’s infrastructure project,” a joint news release stated. Concerns about the pipeline’s impact on the trail and surrounding views led to talks about how Mountain Valley could help with the purchase of high-priority land near the 2,000-plus-mile footpath. “Those tracts will enhance the Trail hiker experience and protect views from numerous vantage points,” according to the news release, which called the gift the largest of its kind for a single region in the conservancy’s history. Mountain Valley plans to bore 80 feet under the trail, creating a tunnel for a 42-inch diameter steel pipe that will channel natural gas at high pressure from the Marcellus and Utica shale formations to markets along the East Coast. In June, a decision by the U.S. Supreme Court cleared plans for the pipeline to pass under the trail at the top of Peters Mountain, where it will cross the state line into Giles County on its way through Southwest Virginia. Although construction is currently stalled by multiple legal challenges — brought by environmental groups who say the project will scar the landscape, pollute streams and kill endangered species — Mountain Valley says it expects to regain suspended permits in time to finish the 303-mile pipeline by early next year. With Monday’s announcement, Mountain Valley sought to establish some common ground between a commercial venture and the grassroots opposition it has faced for six years.
Pipeline construction firm files lawsuit against Mountain Valley Pipeline - A Texas-based pipeline construction company is suing the Mountain Valley Pipeline to get $103.8 million it alleges it's owed by the Pittsburgh-based joint venture — and that the under-construction pipeline be sold to meet the terms of the deal.US Trinity Energy Services LLC filed suit against Mountain Valley Pipeline earlier this month in Allegheny County Court of Common Pleas. It follows a back and forth between US Trinity and MVP over costs involving building of the pipeline in West Virginia that led to a mechanic lien for $102.5 million filed March 3 in Monroe County, West Virginia.The company filed three counts in Allegheny County Court of Common Pleas: breach of contract, foreclosure of mechanics' liens and failure to pay under the Pennsylvania Contractor and Subcontractor Payment Act. US Trinity is looking for $103.8 million in damages, a judgment for the mechanics' liens and interest of 1% a month and attorneys' fees.US Trinity in its lawsuit urged the "Notice of Mechanic's Liens be enforced and that the Pipeline be sold to satisfy the sum determined to be due Trinity up to the value of its lien ($102,469,189.65)."It was another legal setback for the Mountain Valley Pipeline, which is being constructed by Equitrans Midstream Corp. (NYSE: ETRN) and will carry Marcellus and Utica shale natural gas from northern West Virginia down the Mountain State and into southwestern Virginia. The 303-mile pipeline, which has been in the works since 2014, remains shut down for construction due to a stop-work order from the Federal Energy Regulatory Commission as well as several pending permits. Equitrans said recently that it expects to be in service with the pipeline in early 2021.The delays, and the failure to receive one of those permits from the U.S. Army Corps of Engineers called a Nationwide 12, was cited by US Trinity in the lawsuit. US Trinity was named a contractor on the MVP to build in three counties in West Virginia in late 2017 but it said the work was delayed and disrupted for reasons beyond Trinity's control."Large portions of Trinity's work space was unavailable because MVP failed to timely obtain certain environmental permits, including the 12 Permit," the lawsuit said. "From the outset of the project, Trinity was forced to incur multiple Move Around events, place its crews and equipment on standby, and suspend its work repeatedly between available work spaces."Trinity and MVP had resolved previous disputes over payment until after February 2019 but filed a mechanic's lien this year after the Nationwide 12 permit didn't materialize. MVP told Trinity as part of the FERC stop-work order to stop just about all the work and then was told in November 2019 to terminate all work and submit documents for outstanding payment. US Trinity said it submitted the $103.8 million including $83.8 million related to change-work orders that encompass the delays and disruptions to the MVP schedule.It said MVP approved only $9 million in payment requests out of the $103.8 million, rejecting the rest. It also said it wouldn't pay the money it did approve May 1 until after the mechanic lien had been released.
Pipeline infrastructure planning in the era of Black Lives Matter - Natural gas pipeline project developers face delays, uncertainty and increased costs arising from intense inquiries from regulators, affected communities and activists concerning their compliance with the various environmental laws and regulations that govern the construction and operation of pipelines and associated facilities. This is owing, at least in part, to arguments invoking environmental justice concerns and consideration of the impacts that project siting has on communities of color rising to prominence. Given the light shone by the Black Lives Matter ("BLM") movement on the systemic racism faced by people of color, scrutiny of the siting of infrastructure projects is already increasing, and attention paid to disproportionate, adverse effects on communities of color likely will intensify. The BLM movement may also influence how courts and regulatory agencies interpret companies’ obligations under environmental laws, while shareholders may take the movement’s ideals under advisement as part of their larger environmental, social and governance considerations. Energy companies planning to undertake capital-intensive infrastructure projects should consider the implications of the BLM movement and tailor their planning and development to reflect the outgrowths of the current times — the era of Black Lives Matter. Earlier this year, the U.S. Court of Appeals for the Fourth Circuit in Friends of Buckingham v. State Air Pollution Control Board ("Buckingham") vacated a permit granted to Atlantic Coast Pipeline LLC ("ACP") to construct and operate a compressor station intended to transmit natural gas through ACP’s pipeline. The compressor station, consisting of four natural gas-fired turbines that emit pollutants, was to be located in a historic, predominantly Black community largely occupied by descendants of freed slaves. Responding to a challenge by community residents, the court found that the granting authority had not determined whether the community was a "minority" environmental justice community — a critical designation when evaluating the likelihood of disproportionate health impacts to residents. The court also concluded that the board failed to assess the compressor station’s potential for disproportionate health impacts on the community, notwithstanding a study by residents that community members suffered from health conditions that would make them more susceptible to the compressor station’s emissions. Ultimately, the court determined that "environmental justice is not merely a box to be checked." The $8 billion project was abandoned months later, with representatives citing the legal challenges and resulting delays as the cause.
Rule allowing LNG rail shipments in US challenged in court - (AP) — A coalition of six environmental advocacy groups asked a federal judge on Tuesday to block a new Trump administration rule to allow rail shipments of liquefied natural gas, a new front in the movement of energy products backed by both the natural gas and rail freight industries. The groups will argue in court that, among other things, the administration did not adequately study the new rule to ensure that the activity it is authorizing is safe for workers, communities and the environment, said Jordan Luebkemann, a lawyer for Earthjustice, which is representing the groups court. The rule, they said, would allow shipments of the flammable and odorless liquid known as LNG by rail in tanker cars that are untested and that cannot withstand high-speed impacts. “Under this new rule, it’s only a matter of time before we see an explosion in a major population center,” said Emily Jeffers, an attorney with the Center for Biological Diversity. The U.S. Pipeline and Hazardous Material Safety Administration published the rule late last month in the Federal Register and it takes effect in the coming days. The country’s natural gas boom has fueled massive growth in LNG exports, growing last year by more than 65 times the amount exported in 2015, according to federal figures. The rule requires enhancements — including a thicker outer tank made of steel with a greater puncture resistance — to the approved tank car design that, for decades, has been approved for shipments of other flammable cryogenic materials, such as liquid ethylene and liquid ethane. Previously, federal hazardous materials regulations allowed shipments of LNG by truck, but not by rail, except with a special permit. Fifteen states also objected to the rule during the comment period. Those states included Pennsylvania and New Jersey, where the Trump administration issued a special permit in December 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 is expected to be exported to foreign markets for electricity production, although the applicant, a subsidiary of New Fortress Energy, has told federal regulators that some domestic industrial use is possible.
A watchdog emerges for planned LNG site | Editorial - nj.com - Well, at least someone in government can walk and chew gum at the same time on behalf of South Jersey residents. While state Attorney General Gurbir Grewal made news by stating he’ll add the Garden State’s name to litigation trying to stop President Donald Trump from dismantling the post office, the AG also filed an objection to a Trump rule that could send rail cars filled with liquefied natural gas hurtling through the region. Saving the U.S. Postal Service is important, But an accelerated rule to allow potentially dangerous LNG to traverse residential neighborhoods in tank cars not specifically designed for the pressurized cargo could be much more disastrous.You can recount a disputed ballot, but you can’t reverse a derailment that creates fire danger and what might amount to an uncontrolled explosion.There’s special relevance to Gloucester, Camden and Salem counties. A proposed terminal to export domestically sourced LNG by ship, located on the Delaware River at Greenwich Township, has been racking up required permits from various agencies. The developers of the Gibbstown Logistics Center pier and storage site have made clear that, if the train rule is OK’d, they’d try to use that mode to bring the Pennsylvania-extracted gas to Greenwich.The pending federal rule (promulgated by the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration) allows trains with up to 100 cars each to move to destinations around the country. It would go into effect Aug. 24 unless objections — including New Jersey’s — cause regulators to suspend, modify or cancel it.New Jersey becomes the 14th state to challenge the rule as proposed. In his Tuesday announcement, Grewal didn’t go as far as Maryland Attorney General Brian Frosh, who referred to ships carrying LNG as “floating bombs,” and added, “Rolling tank cars filled with LNG though our neighborhoods are vastly more dangerous.”
Is New England's On-and-Off Embrace of Gas-Fired Power Headed for a Fall? | RBN Energy - The U.S. power sector’s shift to natural gas over the past few years has been a boon to gas producers across the Lower 48, especially in the Northeast. Scores of new gas-fired power plants have been built there during the Shale Era, and a number of coal-fired, oil-fired, and nuclear plants have been taken offline. New England is a case in point; gas-fired power now accounts for about half of the installed generating capacity in the six-state region (Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine) — three times what it was 20 years ago. But New Englanders have a love-hate relationship with natural gas, and with renewables and energy storage on the rise, gas’s role in the land of the Red Sox, hard-to-understand accents, and lobsta’ rolls may well have peaked. Today, we discuss recent developments on the natural gas and power generation fronts in the northeastern corner of the U.S. Over the past few years, we’ve posted many blogs about New England’s natural gas pipeline infrastructure, which, despite the best efforts of midstreamers, has failed to keep pace with either the region’s shift to gas-fired power generation during the 2000s and ’10s or the growth in natural gas production from the Marcellus and Utica shale plays that sit at its doorstep. As we said in Please Come to Boston back in 2014, five pipeline systems provide the vast majority of New England’s gas: Tennessee Gas Pipeline (TGP; blue line in Figure 1) and Algonquin Gas Transmission (AGT; green line) from the south, Iroquois Gas Transmission (IGT; lavender line) from the west through New York State, and Maritimes & Northeast Pipeline (MNP; pink line) along with Portland Natural Gas Transmission (PNGT; yellow line) from Canada, through New Brunswick and Quebec, respectively. There are also two LNG import terminals in the Boston, MA, area capable of importing LNG, regasifying it and then sending it out into the U.S. gas pipeline network during periods of high demand (see our You Dropped a Bomb on Me series). These are: Excelerate Energy’s Northeast Gateway Deepwater Port and Exelon Generation’s Everett terminal, which provides fuel for Exelon’s 1,400-megawatt (MW), gas-fired Mystic power plant (more on this in a moment) as well as gas to gas utilities. There’s also the Canaport LNG import terminal up in New Brunswick, from which regasified LNG can be piped down MNP into New England.
Why Warren Buffett is betting on energy pipelines even as climate fears are rising - With the coronavirus pandemic slashing demand for the oil and gas that has been booming in the U.S. shale during the past decade, energy pipeline development has stalled. The midstream portion of the energy complex, as it is known, may not recover soon, but it will recover, according to energy experts, and none other than Warren Buffett — who has been uncharacteristically shy about making investments during the Covid-19 washout — is betting on that. The billionaire investor recently plunked down near-$10 billion to buy gas pipeline assets and related debt. After a decade of capacity buildout in the pipeline infrastructure to match the U.S. fossil fuel fracking growth, demand is lacking and will stay down, despite a doubling in the price of crude following sub-$20 lows reached in March. "You have to consider what drove the infrastructure development: the shale boom. When you look at oil near $40 and natural gas rising, but still sub-$3, we're not in a climate where higher production of oil and gas is supported to support a larger build out," Before Covid-19 hit, Platts Analytics was forecasting U.S. crude oil production to rise by one million barrels per day year over year, and rise by another 600,000 barrels in 2021. Now, as rig counts have declined at the steepest rate since 2009 — 75% of natural gas production comes from the "associated gas" at oil rig sites, as well — crude production is expected to register an annual decline within the next few months, and that decline will persist until at least mid-2021, according to Platts Analytics' forecast. Instead of the substantial growth that midstream companies had been making investment decisions based on — and which led to a significant number of pipeline projects coming online within the past two years — major shale basins like the Permian will see lower utilization of outbound pipelines for the next few years.But there's more going on then just a typical commodities boom-and-bust cycle. With successful environmental challenges leading to legal and regulatory roadblocks for pipelines, and a political climate becoming more difficult for fossil fuels, companies in the utility sectors are rethinking their midstream investments, and in some cases, reallocating funds towards renewable energy projects. But Buffett's acquisition will provide a steady stream of revenue and a quality asset, regardless of the lack of midstream development. Buffett also has always preferred investments in a market where more control is reasonable to expect — lack of new pipeline supply could be a plus as far as his preference for less competition likely to come into the market. The Dominion gas pipeline and storage assets include operations in Connecticut, Maryland, Ohio, West Virginia, Pennsylvania, New York, Maryland and Virginia. The deal won't burn a hole in his pocket, either, with Berkshire sitting on well over $100 billion in cash and short-term assets, and Buffett always anxious to deploy the capital into projects that generate a return on investment.
Natural Gas Prices Soar As Heat Wave Hits Large Parts Of U.S. - Natural gas prices spiked on Friday by nearly 9%, even as the weekly storage report showed little movement. Natural gas prices hit $2.367 by 2:26 pm EDT, an increase of 8.48% or $0.185, even as the EIA’s weekly storage report a day earlier showed a small increase of 58 Bcf in working gas in storage. The market had anticipated a larger build. Also bullish for natural gas on Friday were forecasts for hot weather and reports of increased LNG exports. Front-month natural gas futures on Friday hit their highest since the end of last year on this data as air conditioning usage is expected to increase as people try to cope with the heat wave. This will increase the demand for natural gas. This will be particularly true in Texas, where demand for power in general—and consequently natural gas—is expected to hit a record high today as the heatwave sets in, according to Reuters. These record highs for power demand will come even as industrial activity has not yet returned to pre-pandemic levels.This unprecedented power demand has led to increases in power prices in the western part of the United States, which has, in turn, boosted natural gas prices.Front-month nat gas futures were up more than $0.15 to $2.335 on Friday afternoon.LNG exports have also increased, with improved demand outlook over the next couple of weeks, although the EIA stated that U.S. LNG exports will remain at lowlevels for the remainder of the summer, with planned cargoes of LNG still being canceled. According to EIA data cited by Kallinish, 46 LNG cargoes were canceled in June, 50 canceled in July, 45 were canceled in August, and so far 30 have been canceled for September.
U.S. natgas futures slip from 8-month high as demand slowly eases - (Reuters) - U.S. natural gas futures on Monday slipped from an eight-month high in the previous session as output slowly increases and on forecasts for milder weather and lower air conditioning demand than previously expected. That price decline came despite a steady increase in liquefied natural gas (LNG) exports. Front-month gas futures fell 1.7 cents, or 0.7%, to settle at $2.339 per million British thermal units. On Friday, the contract closed at its highest since Dec. 5. Electricity prices in the U.S. West, meanwhile, soared to record highs as California consumers prepared for more rotating outages after the grid operator ordered utilities to shut power over the weekend to reduce strain on the system during a brutal heat wave. Gas speculators last week boosted their net long positions on the New York Mercantile and Intercontinental Exchanges to their highest since November 2018 on expectations energy demand will rise as the economy rebounds when state governments lift more coronavirus-linked lockdowns. Although U.S. and European gas contracts mostly trade on their own fundamentals, a 58% jump in prices at the European Title Transfer Facility (TTF) benchmark in the Netherlands so far in August helped pull U.S. gas up about 30% this month. That made it profitable for more U.S. LNG cargoes to go to Europe. U.S. LNG exports were on track to rise in August for the first time in six months. Pipeline gas flowing to the plants climbed to 4.3 billion cubic feet per day (bcfd) so far this month from a 21-month low of 3.3 bcfd in July. With temperatures expected to moderate now that the hottest days of summer are in the past, Refinitiv projected U.S. demand, including exports, will decline from an average of 90.4 bcfd this week to 88.1 bcfd next week.
U.S. natgas futures jump to 8-month high on rising LNG exports, hot weather -(Reuters) — U.S. natural gas futures jumped to an eight-month high on Tuesday on rising liquefied natural gas (LNG) exports, a decline in output and forecasts for warmer weather and higher air conditioning demand over the next two weeks than previously expected. Front-month gas futures rose 7.8 cents, or 3.3%, to settle at $2.417 per million British thermal units, their highest close since Dec. 5. Power prices in the U.S. West, meanwhile, soared to record highs for a second day during a brutal heat wave as California utilities urged consumers to keep conserving energy to avoid more rotating outages with demand expected to near an all-time high on Tuesday. Next-day gas prices at the SoCal Citygate in Southern California, meanwhile, jumped to their highest since February 2019. Although U.S. and European gas contracts mostly trade on their own fundamentals, a 59% jump in prices at the European Title Transfer Facility (TTF) benchmark in the Netherlands so far in August helped pull U.S. gas up about 36% this month. That made it profitable for more U.S. LNG cargoes to go to Europe. U.S. LNG exports were on track to rise in August for the first time in six months. Pipeline gas flowing to the plants climbed to a three-month high of 4.4 billion cubic feet per day (bcfd) so far this month from a 21-month low of 3.3 bcfd in July.
US natgas futures at fresh 8-month high on rising LNG exports - US natural gas futures edged up to a fresh eight-month high on Wednesday as liquefied natural gas (LNG) exports continue to rise and on forecasts for more hot weather and heating demand through early September than previously expected. Front-month gas futures rose 0.9 cents, or 0.4%, to settle at $2.426 per million British thermal units, their highest close since Dec. 5 for a second day in a row. Although US, European and Asian gas contracts mostly trade on their own fundamentals, a 59% jump in prices at the Title Transfer Facility (TTF) benchmark in the Netherlands and a 65% increase at the Japan-Korea Marker (JKM) so far in August helped pull US gas futures up about 33% this month, making US LNG more attractive to global markets. With temperatures expected to remain hot through early September, Refinitiv projected US demand, including exports, will hold around 90.2 bcfd this week and next. That is higher than Refinitiv's forecast on Tuesday. US production has averaged 88.5 bcfd so far in August, up from a two-month high of 88.0 bcfd in July. That, however, is still well below November's all-time monthly high of 95.4 bcfd. In California, meanwhile, power companies continued to urge customers to conserve energy through Thursday to avoid more rotating outages as the brutal heat wave blanketing the state over the past week pushes the demand forecast for Wednesday over the prior day's three-year high.
US working natural gas volumes in underground storage rise by 43 Bcf: EIA | S&P Global Platts — US natural gas stocks increased nearly in line with the five-year average in the week ended Aug. 14 despite net withdrawals being reported in the Pacific region and South Central's salt-dome facilities as Henry Hub strip prices slip slightly. US underground natural gas storage inventories increased 43 Bcf to 3.375 Tcf in the week ended Aug. 14, the US Energy Information Administration said Aug. 20. The injection was larger than the consensus expectations of analysts surveyed by S&P Global Platts, which called for a 39 Bcf build. Responses to the survey ranged from an injection of 34 Bcf to 51 Bcf. The injection was, however, smaller than the 56 Bcf build reported during the same week a year ago and almost in line with the five-year average increase of 44 Bcf, according to EIA data. Storage volumes now stand 595 Bcf, or 21.4%, above the year-ago level of 2.780 Tcf and 442 Bcf, or 15%, higher than the five-year average of 2.933 Tcf. US supply and demand balances grew tighter during the reference week as a surge in power burn demand helped offset rising supplies, particularly from onshore production gains, according to S&P Global Platts Analytics. Total supply came in 1 Bcf/d higher during the week for an average 92.8 Bcf/d, led by a 800 MMcf/d increase in onshore production and a 400 MMcf/d increase in net Canadian imports, partly counterbalanced by a 200 MMcf/d drop in offshore production receipts. Total demand grew by 2.7 Bcf/d during the week to an average 86.6 Bcf/d, which was mainly the result of a 2.5 Bcf/d increase in powerburn demand, bolstered by a 500 MMcf/d increase in LNG feedgas demand as facilities in the US Gulf Coast continue to see higher LNG liquefaction processing. The NYMEX Henry Hub September contract slid 5 cents to $2.37/MMBtu in trading following the release of the weekly storage report. The winter strip, November through March, fell by an average of 2 cents to $3.08/MMBtu. Spreads from summer to winter have narrowed by nearly 10 cents over the last week to 63 cents, down from 72 cents a week ago and considerably wider than the roughly 90-cent spread seen at the beginning of this month. Since the start of August, the balance of 2020 strip has risen almost 50 cents while the calendar 2021 strip has rallied 15 cents. Platts Analytics expects further upside to the winter and summer 2021 strips amid associated gas production declines.
U.S. natgas falls from 8-month high on big storage build for hot week - (Reuters) - U.S. natural gas futures fell over 3% on Thursday following the release of a report that showed hot weather last week was not enough to cut the storage build below normal levels, meaning it was only enough to offset demand destruction from the coronavirus. Analysts also noted that with prices trading near an eight-month high over the past week, it made economic sense for some generators to burn more coal and less gas to produce electricity. Thursday's price drop came despite a rise in liquefied natural gas (LNG) exports and forecasts for more hot weather and air conditioning demand through early September than earlier expected. The U.S. Energy Information Administration (EIA) said U.S. utilities injected 43 billion cubic feet (bcf) of gas into storage in the week ended Aug. 14. That matched analysts estimates in a Reuters poll and compares with an increase of 56 bcf during the same week last year and a five-year (2015-19) average build of 44 bcf. Front-month gas futures fell 7.4 cents, or 3.1%, to settle at $2.352 per million British thermal units. On Wednesday, the contract closed at its highest since Dec. 5. U.S. LNG exports were on track to rise in August for the first time in six months. Pipeline gas flowing to the plants climbed to a three-month high of 4.4 billion cubic feet per day (bcfd) so far this month from a 21-month low of 3.3 bcfd in July.
Blistering Heat Wave Behind Latest Run-Up for Weekly Natural Gas Prices - Record-high temperatures on the West Coast and typical August heat and humidity in the South and Southeast this week drove sharp gains in natural gas prices across the Lower 48 for the Aug. 17-21 week. Led by massive increases in California, NGI’s Weekly Spot Gas National Avg. jumped 20.5 cents to $2.255. However, power conservation efforts, much-needed imports and increased wind generation helped stave off disaster for the nation’s most populous state. Nevertheless, the heightened demand boosted spot gas prices across California to the highest levels of the summer so far. SoCal Citygate traded as high as $14.00 before going on to average $7.040, up $3.205 week/week.Prices in the Desert Southwest also rallied, with Kern Delivery jumping $2.675 on the week to $6.220. In the Rockies, Transwestern San Juan was up 32.0 cents to $2.315.Market hubs in other producing regions also climbed week/week, with increases of about 20 cents or so the norm. Double-digit gains extended across Texas, Louisiana and the Southeast as well. . Analysts saw the move higher as sustainable overall, but cautioned that with two months remaining in the storage injection season, the risk of stocks toppling over still threatened the rally. Indeed, after the U.S. Energy Information Administration (EIA) reported a 43 Bcf build into inventories for the week ending Aug. 14, the market appeared to acknowledge just how loose the market still is, shedding more than 7 cents at the front of the curve. Stocks are now at 3,375 Bcf, nearly 600 Bcf above last year and around 440 Bcf above the five-year average, according to EIA. Even still, two major storms have their sights set on the Gulf Coast, threatening production, LNG exports and domestic demand in the coming days. Two of the biggest operators in the deepwater Gulf of Mexico (GOM), BP plc and Royal Dutch Shell plc, on Friday had begun evacuating employees from platforms and rigs. BP also was shutting in production from its four operated platforms, Atlantis, Mad Dog, Na Kika and Thunder Horse. Work was underway to secure Shell’s drilling operations, but there were no impacts to production as of Friday afternoon. The National Hurricane Center (NHC), in its Friday afternoon update, said on the forecast track, Tropical Storm Laura would move near or over Puerto Rico Saturday morning, and near the northern coast of Hispaniola late Saturday and early Sunday. Tropical Depression 14, which would become Marco if it strengthens as expected, was on track to approach the east coast of the Yucatan Peninsula of Mexico on Saturday before moving over the central GOM toward the northwestern Gulf on Sunday and Monday, NHC said.
Possible oil spill investigated at South Benson Marina - Emergency personnel investigated a possible oil spill Friday at South Benson Marina, according to fire officials. The spill or sheen was reported about 4:40 p.m., according to Assistant Chief George Gomola. Fairfield's fire and police departments responded to the scene, as did the Connecticut Department of Energy and Environmental Protection. The spill was limited to the H and I docks, according to Lt. Eric McKeon, who said the substance had no odor and was likely oil or gasoline. By the time state environmental officials arrived, much of the spill had dissipated. "We didn't find any definitive source," McKeon said, noting the substance could have blown in with the tide or been discharged from a bilge pump. Gomola said the incident was relatively minor in terms of environmental impact.
US Coast Guard- Update on oil spill in Charleston - (WCBD) – On Saturday, an oil spill at the Plum Island Wastewater Treatment Plant released some 3,000 gallons of diesel fuel into a marsh near Dill Creek.A Coast Guard pollution response team has been dispatched to work with the Department of Health and Environmental Control (DHEC) on cleanup efforts. HEPACO, an oil spill response company, was hired to assist in cleanup efforts.Officials are monitoring the impact of the spill, and report “a minimal amount of sheen in Dill Creek.” Booms are reportedly no longer absorbing oil, but “on scene crews will maintain sorbent booms and monitor collection with high tide.”The Coast Guard pollution response team is conducting high tide operations and minimizing foot traffic in the marsh to “reduce the disturbance of the environmentally sensitive area.”
Study: Flaring Linked to Increase in Preterm Births in Eagle Ford Shale - When the fracking boom came to the Eagle Ford Shale, it brought billions of dollars of investment and tax revenue to the rural, sparsely populated swath of South Texas that stretches from the borderlands near Laredo to the northeast toward College Station. In 2015, at the height of the boom, the Eagle Ford was producing more than a million barrels of oil a day. At night, satellite imagery showed rural counties lit up like cities from flaring, the burning of natural gas at well heads. But last month, a new study found that those flares were directly linked to an increase in preterm births in South Texas. Pregnant women exposed to more than 10 nightly flares within three miles of their home had a higher risk of giving birth prematurely. Premature babies can have weak hearts and lungswhen they’re born, and they are more likely to develop chronic health issues later in life. Notably, the study found that trend was exclusive to Hispanic women, who had a higher exposure to flaring than any other demographic in the region.The finding itself is noteworthy, but it’s also one of the rare long term public health studies conducted in the region. “In general, there’s a gap in epidemiology in rural areas,” Jill Johnston, one of the study’s authors, says. “You have to understand the scope of the pollution, and where it’s happening, to link it to an outcome.” That’s already difficult in such a geographically sprawling area, but on top of that, the Eagle Ford also lacks extensive air monitoring to detect the levels of harmful chemicals to begin with.Flaring releases methane, a powerful greenhouse gas, as well as volatile organic compounds, one of ingredients of smog, which irritate the lungs and nervous system. The practice also releases carcinogens like benzene and formaldehyde; nitrogen oxides, which can cause chronic lung issues; and sour-smelling hydrogen sulfide, which causes nausea, dizziness, and headaches. While the state’s Railroad Commission approves permits for oil and gas drilling and flaring, the Texas Commission on Environmental Quality (TCEQ) is tasked with monitoring the emissions from those wells. Across the entire Eagle Ford Shale, which is roughly the size of Delaware, TCEQ maintains seven air monitors—the same number of monitors set up in the city of Dallas, which is a fraction of the size. A handful of the Eagle Ford’s monitors are clustered around large cities like Laredo, measuring particulate matter pollution commonly caused by cars and lighter industrial activity. Only two air monitors track pollutants released from flares: One in Karnes and one in Wilson counties.
Permian Basin natural gas pipeline faces scrutiny after rerouted around Texas river -A controversial natural gas pipeline that would connect extraction operations in the Permian Basin with export and refinery markets in the Gulf Coast continued to face opposition even as the operator announced it would be rerouted around a river in Texas Hill Country. The $2 billion Permian Highway Pipeline project would have a transportation capacity of about 2 billion cubic feet per day of natural gas for about 430 miles east from the Permian Basin area in West Texas to the Gulf Coast. It was expected to be completed and in service by early 2021. The pipeline faced backlash in March after a spill of drilling fluid in the Blanco River in east Texas allegedly contaminated local drinking water and the project’s permits were revoked by Hays County. This week, Kinder Morgan Chief Executive Officer Steven Kean announced in an opinion piece published in the Houston Chronicle that the pipeline would be rerouting around the river instead of being constructed to go underneath. But environmentalist groups were not convinced that the reroute would minimize the pipelines environmental harm on the environment. Throughout the project's lifetime since it began in 2018, numerous lawsuits were filed seeking to block its construction. Kinder Morgan spokesperson Lexey Long said negotiations about the reroute began with local landowners in June but did not specify the exact new route of the line. Sierra Club Senior Campaign Representative Roddy Hughes pointed to numerous incidents causing environmental harm, he said, as the pipeline was built through Texas from a starting point in Waha near the state’s western border to New Mexico. Hughes said Kinder Morgan cannot be trusted to safely finish building and then operate the pipeline and called for the project to be ceased. “After multiple accidents and spills, Kinder Morgan is picking up and trying to build along a new route, leaving an enormous amount of damage in its wake and putting a whole new group of landowners at risk,” Hughes said.
U.S. Oil Rig Count Rises For First Time Since January - Baker Hughes reported on Friday that the number of oil rigs in the United States rose for the first time since January by 11, to 183—the first double-digit increase since the pandemic took locked down significant parts of America. The total number of active oil and gas rigs increased by 10 for the week, with oil rigs climbing by 11 and gas rigs falling by one. Total oil and gas rigs in the United States are now down by 662 compared to this time last year. The largest gain was seen in the Permian Basin, which added ten rigs. The EIA’s estimate for oil production in the United States stayed the same for the week ending August 14—the last week for which there is data, at 10.7 million barrels of oil per day. Oil production in the United States is 2.4 million bpd less than its all-time high reached earlier this year. Canada’s overall rig count rose this week also, by 2, reaching 56 active rigs. Oil and gas rigs in Canada are now down 83 year on year. The Frac Spread Count in North America, provided by Primary Vision, was unchanged last week, at 70. Oil prices were already trading down on the day on Friday despite heightened tensions between the United States and Iran and reports that China is expected to increase its crude oil imports from the United States next month. Dampening the oil spirits on Friday is developments in oil-rich Libya that suggests that a ceasefire has been declared—a development that will surely increase global oil production and ruin OPEC’s 97% compliance rate with its oil production cut agreement. At 12:56 pm EDT, WTI was trading down 2.71% at $41.66—roughly $0.30 down on the week. Brent was trading down 2.52% on the day, at $43.77, down $1 per barrel from last Friday. At 1:08 pm, WTI was trading at $41.67 per barrel, with Brent changing hands at $43.78 per barrel.
Company finds 74.2M barrels of oil and gas in west Texas - Thanks to a partnership with a geoscientist in the Permian Basin, a family-owned oil company is celebrating its largest discovery yet: a 13,000-acre field in Val Verde County holding an estimated 417 billion cubic feet, or 74.2 million barrels, in oil and gas reserves. Barron Petroleum, based in Graham, announced the discovery on Monday after working with scientist William J. Purves on the project since 2018. Using Purves’ 3D seismic model to estimate the location and size of the oil and gas reservoirs, the company confirmed the find by successfully drilling two wells at the site, located about 35 miles south of the West Texas town of Ozona. “We found out that it was exactly what 3D had shown on Dr. Purves’ study,” said Roger Sahota, president and CEO of Barron Petroleum. “We’re very excited and now we’re trying to figure out how to develop it or get someone to join the venture with us. It’s a large project, and our company is small. It’s just me and my three sons and my wife involved.” Albert G. McDaniel, a petroleum engineer based in Fort Worth, completed the evaluation of the oil and gas reserves and wrote that the project is now so low-risk that it “more resembles that of a development project than an exploration venture.” In an interview, McDaniel added that Barron Petroleum will have the ability to drill some 60 new wells, allowing energy companies to purchase large quantities of gas or oil from one site. “This is a major discovery because these new field designations are all going to be made from this one 13,000-acre lease,” McDaniel said. “These are going to be high-volume, high-rate wells from a major new field that will be developed over the next five to 10 years.” Sahota agrees, and is already negotiating a contract with energy companies Kinder Morgan and Enterprise to lay down a miles-long gas line and sell natural gas drilled out of the field.
Texas Democrat: US natural gas vital in transition to renewables -Rep. Vicente Gonzalez (D-Texas) said energy sources like liquified natural gas are essential in the transition to renewable energy, and that a Biden administration would help in that effort. “It's not an either or [decision],” Gonzalez said Monday at The Hill’s “Energy Access and Reliability” event during the virtual Democratic National Convention. He said renewable and traditional energy leaders will “need to hold hands and walk this walk together, and I feel fully confident that ... we will be able to do it under a Biden administration.” Gonzalez -- a member of both the Congressional Renewable Energy Caucus and the Oil & Gas Caucus -- argued at the event sponsored by the American Petroleum Institute that the United States should maintain its position as an exporter rather than an importer of energy, so that it can provide oil to allies. One way to do that, he told The Hill's Steve Clemons, is for Congress to invest in carbon-capturing technology and provide tax credits for companies that develop and use renewable energy technology, all part of the Democratic platform. The 2020 Democratic Party Platform does not mention natural gas but emphasizes investment in renewable energy. Gonzalez’s remarks came the same day the Trump administration announced it had finalized plans to allow oil and gas drilling in 1.5 million acres of the Arctic National Wildlife Refuge in Alaska, dealing a blow to conservationists and proponents of renewable energy. Will Marshall, president of Progressive Policy Institute who also spoke at Monday’s event, said presumptive Democratic presidential nominee Joe Biden is well positioned to help bridge the political divide on the environment by highlighting that energy is “an employment issue” that provides opportunities like investing in manufacturing jobs to build electric vehicles. At a discussion earlier in the day at an event titled “Campaigns and the Pandemic,” Rep. Gwen Moore (D-Wis.) described Biden’s running mate, Sen. Kamala Harris (D-Calif.), as someone who has used her position of power, such as California attorney general and San Francisco district attorney, to fight for the vulnerable, such as going after oil companies that violate environmental standards.
2 bodies found, 2 missing after explosion in Texas port - -- The bodies of two missing crew members of a dredging boat were found Saturday following an explosion a day earlier in the Port of Corpus Christi in Texas, according to the U.S. Coast Guard. Two other crew members of the dredging vessel Waymon L Boyd remain missing and the search for them continues, Coast Guard Capt. Jason Gunning said during a Saturday afternoon news conference. The explosion happened at about 8 a.m. Friday when the vessel struck a submerged pipeline, according to the Coast Guard, and Port of Corpus Christi officials said it was a natural gas pipeline. “A full investigation is underway; however, search and rescue efforts are our first priority. It will not be clear for some time the cause of this accident, and any definitive statements to the contrary would be premature," Strawbridge added. The Waymon L Boyd is owned by Houston-based marine construction contractor Orion Marine Group. The fire onboard the vessel was first extinguished Friday afternoon, but sparked again and was finally put out at approximately 10 p.m. Friday, shortly before the vessel broke apart and sunk, the Coast Guard said. The vessel carried a maximum of about 6,000 gallons of diesel fuel, said Brent Koza, the regional manager for the Texas General Land Office, which investigates oil spills. “We have identified and are preparing for that as our worst case discharge scenario,” and diesel is being recovered from the channel and around environmentally sensitive areas, Koza said.
Public Opinion Is Moving Against Natural Gas and Fracking - The fracked gas industry, already on the ropes financially, has cratered in the pandemic. At the same time, its public support is tanking. This convergence of trends—financial pressure and public skepticism—could spell trouble for at least two big export-oriented fossil fuel proposals in the Northwest that would use vast quantities of gas: the methanol refinery project in Kalama, Washington, and the Jordan Cove LNG project in Coos Bay, Oregon. The decade-long fracking boom that unleashed vast quantities of gas is now fizzling out, doused by a sea of red ink. As evidence mounts that fracking is extremely harmful to the environment and risky for public health, the gas industry seems to be losing the contest for public opinion. In an election year no less. Nationwide in the United States, public opinion has grown skeptical of fracking. Gallup public opinion polling has documented the trend well: in 2015 Americans were evenly split on their support or opposition to fracking. But by 2016 Americans opposed it by an 11-point margin, a figure that widened to 18 points in opposition by 2017. The Pew Research Center documented the same shift in public opinion over the roughly the same period, as fracking fell out of favor. An August 2019 Associated Press-NORC poll found that only 22 percent of Americans support increasing fracking while 45 percent oppose increasing it. And, a YouGov Blue poll in September 2019 found that registered voters support a ban on fracking by 46 to 33 percent. Poll numbers like these have already influenced candidates’ positioning in both state primaries and the US general election. Based on horse race polling, there’s no discernible electoral disadvantage for candidates who take a tough stance on fossil fuels, even in swing states—and even in swing states where fossil fuels loom large, like Ohio, the nation’s fifth-biggest gas producer, and Texas, the nation’s leading gas producer. And no swing state may be more important than Pennsylvania, where the industry cranks out over 6 trillion cubic feet of natural gas annually—a volume that ranks second in the country and ahead of eight OPEC nations. In January 2020, a Franklin and Marshall College poll found that voters in the Keystone State favor a ban on fracking by 48 percent to 39 percent.Okla. oil driller files for bankruptcy protection -- Tuesday, August 18, 2020 -- Chaparral Energy Inc. has filed for bankruptcy protection for the second time in four years, paving the way for bondholders to take control of the Oklahoma driller in the aftermath of sluggish oil prices.
Walz administration to appeal Line 3 | MPR News - Gov. Tim Walz’s administration is wading deeper into the contentious, long-simmering debate over the proposed Line 3 oil pipeline replacement project. The Minnesota Department of Commerce announced plans Tuesday to appeal state utility regulators’ decision earlier this year to approve Enbridge Energy’s proposal to replace a deteriorating pipeline that crosses northern Minnesota with a new, larger pipe along a different route. In a statement released late Tuesday, the Commerce Department said its decision was consistent with previous agency actions. The department has filed similar appeals earlier in the Line 3 regulatory process, under the administrations of Walz and his predecessor, former Gov. Mark Dayton. The department is arguing the state Public Utilities Commission erred in granting Enbridge Energy a certificate of need — which establishes that a project is in the state’s best interest — to build the Line 3 project, “because Enbridge didn’t introduce, and so the commission could not evaluate the accuracy of, a long-term demand forecast.” The Commerce Department also said the utility regulator unlawfully shifted the burden of proof “to show that demand for product transmitted by Line 3 would decrease during the forecast period” from Enbridge to the department and others. In an announcement Tuesday, the Commerce Department said it plans to formally file its challenge with the Minnesota Court of Appeals Wednesday. Enbridge has proposed replacing its existing Line 3 pipeline, which was built in the 1960s and requires substantial maintenance, with a new line that would allow the company to transport nearly twice as much oil, along a new corridor across northern Minnesota. In a statement after the Commerce Department’s announcement, Walz said, “When it comes to any project that impacts our environment and our economy, we must follow the process, the law, and the science.” He said the appeal is a part of that process, and is “important to ensure clarity in the steps that Minnesota takes to evaluate and approve projects like this one.” Walz has been under increasing pressure from both pipeline opponents and supporters as the decision loomed.
Draft decision released for Little Missouri National Grassland oil and gas leasing -- The U.S. Forest Service has released a draft decision regarding updates to oil and gas leasing for the Little Missouri National Grassland and is accepting any public objections for 45 days.The agency has been working to update its oil and gas leasing direction for the western North Dakota grassland, a document that hasn’t been updated since the Bakken oil boom was in its infancy.About 893,000 acres of the grassland are available for oil and gas leasing. The recommended changes would provide access to an additional 216,000 acres, while providing protections for sage grouse, rare plants and fossils, according to the Forest Service's Dakota Prairie Grasslands office."Our analysis demonstrates that energy development can be compatible with our grasslands restoration work, grazing activities, and the myriad recreation opportunities the grasslands have to offer," Acting Grasslands Supervisor Jeff Tomac said in a statement. "The changes to leasing requirements we are considering will enable us to keep up with advancing technologies and trends in energy development in a way that sustains the health of the grasslands for generations to come."The agency earlier took public comment on a draft supplemental environmental impact statement. It announced the final EIS and draft decision on Monday. They can be found at https://www.fs.usda.gov/project/?project=40652. There are several ways to submit objections. They can be mailed or hand-delivered to Objection Revision Officer, USDA Forest Service, Northern Region, 26 Fort Missoula Road, Missoula, MT 59804. Objections also can emailed to appeals-northern-regional-office@usda.gov, with “Northern Great Plains Management Revision for Oil and Gas Leasing Project” in the subject line. They also can be faxed to Objection Reviewing Officer at 406-329-3411.
Giant oil company is building world's largest facility to turn vegetable oil and grease into cleaner gasoline - Fuel maker Phillips 66 is moving to convert a San Francisco-area crude oil refinery into the world’s largest renewable fuels plant by early 2024, the company announced Wednesday. The facility located in Rodeo, Calif., will be reconfigured to no longer produce fuels from crude oil and instead produce renewable fuel from used cooking oil, fats, greases and soybean oils. The company said it expects to produce 680 million gallons a year of renewable diesel and gasoline and sustainable jet fuel. When combined with production from an existing smaller sustainable fuels project, the facility could produce more than 800 million gallons of renewable fuels each year by 2024, pending regulatory approval. The conversion is expected to cut the plant’s greenhouse gas emissions by 50 percent. “Phillips 66 is taking a significant step with RodeoRenewed to support demand for renewable fuels and help California meet its low carbon objectives,” Greg Garland, chairman and CEO of Phillips 66, said in a statement. “We believe the world will require a mix of fuels to meet the growing need for affordable energy, and the renewable fuels from RodeoRenewed will be an important part of that mix.” The energy giant said the capital-efficient investment is expected to deliver strong returns through the sale of “high value products while lowering the plant’s operating costs.” The announcement comes as crude oil prices dropped more than 30 percent as the coronavirus pandemic has disrupted demand for gasoline and jet fuel. Global oil consumption is expected to stay depressed for years as a result of the coronavirus crisis. Meanwhile, demand for renewable fuel is in a position to potentially grow as government regulations in states like California are aimed at dramatically cutting greenhouse gas emissions.
Bankruptcy court approves Whiting's reorganization plans - A bankruptcy court in Texas has signed off on Whiting Petroleum’s bankruptcy plan, which exchanges billions in debts for equity in a reorganized company. Under the plan approved by the Southern District of Texas Bankruptcy Court, Whiting will shed $2.4 billion of its debts, in a $3.4 billion bankruptcy reorganization that will leave 97 percent of its ownership in the hands of private equity firms and investors and 3 percent with existing stockholders. Initially, Whiting was to raise $1 billion to pay part of its debt, but the final plan instead establishes a reserve-based revolving credit facility with an initial $750 million, according to the company’s SEC filing. The revolving fund’s credit limit is $1.5 billion. The effective date of this plan will occur only after all conditions required by the plan have been met, which the company projects will be Sept. 1. Up until then, technical amendments are still possible. A complete description of the plan is available online Whiting will emerge from bankruptcy with both a new chief executive officer and a new board. Kevin McCarthy, vice chairman of private equity firm Kayne Anderson Capital Advisors, will serve as chairman of the new board. Former SRC Energy CEO Lynn Peterson, meanwhile, has been tapped to serve as Whiting’s new CEO, replacing Brad Holly, who took the post in 2017 after serving as head of the Anadarko Petroleum Corporation. Holly will receive a $2.53 million severance package, according to regulatory filings with the SEC, and 18 months of health care benefits. This is on top of the $6.4 million he received for steering the company through the bankruptcy process.
North Dakota crude oil production fell in May beyond natural declines – EIA - Production implied by decline consists of wells with more than three months of non-zero production. A hyperbolic decline curve was fit to historical well-level production to estimate the natural decline in production from each well. Production from the PSM and STEO reflect estimated production from all producing wells in North Dakota. Between December 2019 and May 2020, crude oil output in North Dakota fell from an average of 1.5 million barrels per day (b/d) to 0.9 million b/d, a decline of more than 615,000 b/d (41.6%). This production decline is greater than it would have been if producers solely halted new drilling and allowed production from current wells to naturally decline. With only natural declines, the U.S. Energy Information Administration’s (EIA) analysis of Enverus’s data (which covers most, but not all, wells operating in North Dakota) indicates that crude oil production for most of North Dakota would have been approximately 1.1 million b/d in May 2020, 0.4 million b/d more than those wells actually reported. This difference suggests that many producers decided to reduce production from their existing wells beyond the volume the wells would have naturally declined. The principal driver of North Dakota’s production decline was low crude oil prices. After averaging $55.70 per barrel (b) throughout 2019, monthly prices in North Dakota (defined as the average of the Bakken Clearbrook and the Bakken Guernsey prices) averaged $29.82/b in May 2020 after having declined as low as -$38.13/b on April 20. According to survey data from the Federal Reserve Bank of Dallas, the region’s producers need prices of at least $28/b on average to cover their operating expenses and $51/b to drill new wells. In response to these price signals, most North Dakota producers reduced production, which was accomplished in at least one of three ways. First, some operators chose to completely halt production at some of their wells. As a result, although North Dakota had an average of 16,000 producing wells in December 2019, by May 2020, that number had fallen to 12,800 wells, the lowest level in more than four years.
Bakken gas production rebounds, but will it last? - Bakken associated gas production volume, after falling to its lowest levels in three years in early May and remaining depressed through June, has surged by 500 MMcf/d, or about 45%, in the past month and a half to 1.7 Bcf/d. However, the gains have occurred in the absence of a meaningful change in rig counts or well completion activity, which remains sluggish. Similar to the Permian, the Bakken production recovery has been almost entirely driven by existing wells returning to service after being shut in earlier this year in response to the oil price collapse. With little in the way of new drilling and completion activity, how long will it be before natural declines of existing wells begin to take a toll on Bakken output? Today, we examine prospects for continued strength in Bakken gas production volumes. Gas pipeline flow data over the past couple of months has provided the first indications that the bulk of the U.S. oil wells that were shut in this past spring have returned to service and that production volumes are rebounding. The data also provides a glimpse of what likely will follow the rebound in most basins: a gradual contraction in production output measured by the natural decline rates of existing wells, particularly given that producers’ capital spending budget cuts have slowed new drilling and well completion activity to a crawl.We discussed last month in Gimme Some Truth how these dynamics have unfolded in the Permian — from the sharp drop in associated gas output in early May as the basin’s producers shut in some crude-focused wells in response to low crude prices and storage constraints; to the near-vertical rebound in gas production in late June, as U.S. shut-ins (and, on a global scale, OPEC+ cuts) helped to work off some of the surplus in storage and crude prices recovered above $40/bbl; and finally, the inevitable downturn in production as natural declines continued to wear down the strength of output from existing wells. At the peak of the rebound in early July, Permian gas volumes hit a post-shut-in high of 11.7 Bcf/d, up from an average 10.5 Bcf/d during the worst of the shut-ins, but not quite back to pre-shut-in highs near 12 Bcf/d, and they’ve continued a slow slide from there (see the weekly NATGAS Permian and Crude Oil Permian reports for the latest).
Dakota Access Pipeline fight will heat up again in two federal courts | S&P Global Platts — The Dakota Access Pipeline will continue to flow crude oil for now, but the legal battle heats back up again soon as the fight to shutter the pipeline continues in two separate federal courts. A three-judge panel of the US Court of Appeals for the DC Circuit ruled on Aug. 5 that the pipeline could remain open for now -- the same day that was the initial deadline for the 570,000 b/d crude system to be closed. But, as part of a mixed-bag ruling, the panel also kicked the case back to the judge, James Boasberg, who ordered the pipeline shuttered to potentially make a stronger argument for its unprecedented closure. The oil and gas industry and environmentalists are closely watching the case that could determine whether a three-year-old crude pipeline, which serves as the main crude artery from the Bakken Shale, can permanently be closed after it's built and is up and running. The legal argument is that the pipeline's construction should never have been allowed because permitting allegedly was fast-tracked by the US Army Corps of Engineer and the pipeline-friendly Trump administration without undergoing the proper environmental reviews. "What makes this case so unusual is the pipeline is already built," said James Coleman, an energy law professor at Southern Methodist University. "There really aren't many precedents." While the shutdown injunction case is back in the hands of Judge Boasberg, of the US District Court for the District of Columbia, the three-judge appeals panel is expediting legal arguments over the ruling that forces the Corps of Engineers to conduct a stronger assessment and draft an Environmental Impact Statement, called an EIS, which couldn't be completed until 2021 at the earliest. Although the appeals court let the pipeline continue to operate in the meantime, the court also upheld the yanking of the pipeline's federal water permit. That means the Corps of Engineers has until Aug. 31 to detail the options it is considering on how -- or how not -- to justify keeping the pipeline safely flowing while its environmental permitting remains vacated. The lead plaintiffs, the Standing Rock Sioux Tribe, and their legal representation at Earthjustice, contend the pipeline is now operating illegally because the permitting was lost. The strong assumption is the Corps of Engineer will let the pipeline to stay open, said attorney Jan Hasselman of Earthjustice. "Everyone always assumed that vacating the permit meant shutting down the pipeline, and it's almost like the goalpost got moved," Hasselman said. "That's certainly the conversation we'll have with the appeals court." In the appellate court, initial arguments are due on Aug. 26 and all replies are due by the end of September. The three-judge panel ordered an "expedited" court schedule this year. "I can't remember this ever happening before," Hasselman added. "We'll be litigating the same case in two different courts at the same time."
Keystone Pipeline operators pay more than $52,000 for 2019 Walsh County oil spill - TC Energy has agreed to pay more than $52,000 for the Keystone Pipeline oil spill last year that released about 383,000 gallons of crude oil onto about five acres of farmland outside of Edinburg, N.D. in October.The settlement, dated Aug. 10, states that the Canada-based pipeline company formerly called TransCanada Energy agreed to pay a $32,000 administrative penalty as well as a $20,354 environmental emergency cost recovery fee to the North Dakota Department of Environmental Quality.DEQ Director Dave Glatt said the $52,354 payment was received on Aug. 10.When determining the administrative penalty for a pipeline company responsible for a spill on North Dakota soil, Glatt said factors, such as how much damage was done and how quickly the company acted to clean the oil, are considered. The cost recovery fee covers the cost of DEQ's own response to the spill. Glatt said the administrative penalty in this case is relatively low, because of how quickly TC Energy responded to the spill and how quickly it was able to remediate the site."(TC Energy) were able to shut down the pipeline very quickly, and that resulted in minimizing the impact and so they were able to clean this up in short order," Glatt said. "Some sites, it may take years to clean them up, but that wasn't the case here."As of earlier this summer, the spill has been contained and the site remediated to the DEQ's satisfaction. Glatt said that, after the contaminated soil was removed and taken to a landfill, TC Energy workers reconfigured the land to its original contour and re-vegetated the site.DEQ will continue to monitor the site to make sure the grasses and plants return to their normal growth, but he expects there will be no long-term impacts to the land because of the spill or remediation work.
Trump Admin Pushes Final Drilling Plan for Arctic National Wildlife Refuge -- The Arctic National Wildlife Refuge, thanks to protections put in place 60 years ago, has remained a pristine oasis in the most remote section of Alaska. Now, the Trump administration is finalizing plans to end those protections and to lease the federal lands to oil and gas exploration, according to The New York Times. The maneuver will allow oil and gas companies to exploit the vast reserves that sit under what environmentalists call "the last great wilderness," according to The Guardian. The Arctic National Wildlife Refuge is estimated to sit above billions of barrels of oil. However, the 19-million acre sanctuary is home to polar bears, various waterfowl, migrating caribou and Arctic foxes that make the area their year-round home. In all, the refuge is home to more than 270 species, including the world's remaining Southern Beaufort Sea polar bears, 250 musk oxen and 300,000 snow geese, according to The Washington Post. The Trump administration plans to open the perimeter to drilling, roughly 1.6 million acres in coastline, as The New York Times reported. The Department of the Interior said it had completed all the requisite reviews and intended to start selling leases to the land soon. Speaking to reporters, Secretary of the Interior David Bernhardt said, "I do believe there could be a lease sale by the end of the year," as The New York Times reported. Bernhardt added that offering the leases, "marks a new chapter in American energy independence" and predicted it could "create thousands of new jobs," according to CNN. He also said in his conference call with reporters that he was moving forward with a 2017 budget bill, passed by a Republican-led congress, that insisted that the Federal government open up oil and gas leasing on the Arctic National Wildlife Refuge, according to The Washington Post. The push to open up the wildlife refuge marks a significant energy policy for an administration that has been hostile to the urgency of the climate crisis and invested heavily in greenhouse gas-emitting fossil fuels. According to research from the Centers for American Progress, the drilling would result in more than 4.3 billion tons of CO2 emissions, which is roughly 75 percent of the nation's annual carbon dioxide emissions, according to The Washington Post.
The federal government will hold an ANWR lease sale. But drilling would be more than a decade away - Anchorage Daily News - The Trump Administration on Monday set the stage for a lease sale in the Arctic National Wildlife Refuge in the coming months, but industry observers and Alaska leaders say oil won’t flow for years. Drilling in the sensitive coastal plain faces strong resistance, questions about future demand for oil and vows from large banks not to invest in the region, they said. But some said that while litigation could slow the lease sale, the promise of a large discovery in a little-explored land land, where oil has been found at the surface, means drilling is certain.Rep. Don Young, R-Alaska, who has fought for development in ANWR for generations, said that with litigation from conservation groups likely, he doesn’t think there’s enough time to hold a lease sale this year. But it will be held next year, he said. Like Prudhoe Bay, where drilling was also controversial before it began, oil production from the refuge will eventually create significant jobs and revenue for Alaska and the U.S., Young said in an interview. Led by Alaska’s congressional delegation, Congress in 2017 approved legislation calling for two lease sales by late 2024, at least 400,000 acres apiece in the coastal plain of the 19-million-acre refuge in northern Alaska. On Monday, Interior Secretary David Bernhardt finalized a more than two-year environmental review that analyzed potential drilling in the refuge, signing a record of decision that puts all available land, or 1.6-million acres, on the table for possible leasing. Congress mandated the lease sales, so they have to go forward, Benhardt said, in a meeting with reporters on Monday. The first lease sale will be held by late 2021, and the second by late 2024, he said. “The question of whether or not there will be a program in ANWR has really been answered,” he said. “The issue now is how do we go about it, and how durable that is.”
Trump Administration Finalizes Plan to Open Oil Drilling in Alaska's Arctic Refuge - The New York Times — The Trump administration on Monday finalized its plan to open up part of the Arctic National Wildlife Refuge in Alaska to oil and gas development, a move that overturns six decades of protections for the largest remaining stretch of wilderness in the United States.The decision sets the stage for what is expected to be a fierce legal battle over the fate of the refuge’s vast, remote coastal plain, which is believed to sit atop billions of barrels of oil but is also home to polar bears and migrating herds of caribou.The Interior Department said on Monday that it had completed its required reviews and would begin preparations to auction off drilling leases. “I do believe there could be a lease sale by the end of the year,” Interior Secretary David Bernhardt said.Environmentalists, who have battled for decades to keep energy companies out of the refuge, say the Interior Department failed to adequately consider the effects that oil and gas development could have on climate change and wildlife. They and other opponents, including some Alaska Native groups, are expected to file lawsuits to try to block lease sales.“We will continue to fight this at every turn,” said Adam Kolton, executive director of the Alaska Wilderness League, in a statement. “Any oil company that would seek to drill in the Arctic Refuge will face enormous reputational, legal and financial risks.”Though any oil production within the refuge would still be at least a decade in the future, companies that bought leases could begin the process of seeking permits and exploring for oil and gas.President Trump has long cast an increase in Arctic drilling as integral to his push to expand domestic fossil fuel production on federal lands and secure America’s “energy dominance.” Republicans have prized the refuge as a lucrative source of oil and gas ever since the Reagan administration first recommended drilling in 1987, but efforts to open it up had long been stymied by Democratic lawmakers until 2017, when the G.O.P. used its control of both houses of Congress to pass a bill authorizing lease sales.“ANWR is a big deal that Ronald Reagan couldn’t get done and nobody could get done,” Mr. Trump said in an interview with Fox & Friends on Monday.It remains unclear how much interest there will be from energy companies at a time when many countries are trying to wean themselves from fossil fuels and oil prices are crashing amid the coronavirus pandemic. Exploring and drilling in harsh Arctic conditions remains difficult and costly.Nevertheless, by proceeding with the lease sales, the Trump administration has made the Arctic refuge a potential issue in the presidential campaign, and the region’s fate may ultimately hinge on the election’s outcome. The Democratic nominee for president, Joseph R. Biden Jr., has called for permanent protection of the refuge. However, even if he were to win the White House, it could prove difficult for his administration to overturn existing lease rights once they have been auctioned to energy companies.
The Energy 202: Trump team up against the clock to sell Arctic drilling rights by Inauguration Day - The Washington Post - The Trump administration is racing to sell off the right to drill deep in the Alaskan Arctic – to protect against the possibility that Joe Biden, if elected, could undo one what would be among the president's most significant energy policy achievements. The presidential election is putting pressure on Trump's deputies at the Interior Department to be on track to complete a lease sale in the Arctic National Wildlife Refuge before Inauguration Day in January 2021. That would make it much more difficult for a future Democratic administration to reverse the decision to open the ecologically sensitive caribou and polar bear habitat to oil and gas extraction, experts say. “They have a very narrow window,” said Matt Lee-Ashley, a senior fellow with the Center for American Progress, a left-leaning think tank that opposes drilling in the Arctic refuge. “They certainly can do it, but the margins of error are smaller.” The coastal plain within the Arctic National Wildlife Refuge in Alaska. (U.S. Fish and Wildlife Services/AFP via Getty Images) The coastal plain within the Arctic National Wildlife Refuge in Alaska. (U.S. Fish and Wildlife Services/AFP via Getty Images) (Handout/Us Fish And Wildlife Services/Af) The Interior Department just finalized a plan to hold a lease sale, but didn't say when exactly it would take place. The plan released Monday calls for the first oil and gas auction to be held by December 2021. The move opens the door for leasing on the 1.6 million-acre coastal plain on Alaska's North Slope after drilling there was authorizing by congressional Republicans in a 2017 budget bill. AD Without mentioning the upcoming election, Interior Secretary David Bernhardt suggested his department may complete the lease sale soon. “I do believe that there certainly could be a lease sale by the end of the year,” Bernhardt told reporters this week, though he added that he is “not really driven by the political dynamics.” “The president has this issue as one of his priorities that he discussed with us,” he said. Looming over the leasing process is a promise from Biden to block drilling in the refuge if elected president. His campaign reiterated that commitment Monday after the Trump administration released the plan. Now both the oil industry and politicians in Alaska are eager to see leases sold sooner rather than later. Frank Macchiarola, a senior vice president at the American Petroleum Institute, a major oil and gas lobbying group in Washington, said his organization “would support seeing a lease sale this year.” AD “This has been an important priority for the industry for a number of years,” he added. Perhaps no one did more to usher the drilling provision through Congress than Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee. Getting Congress to permit drilling there was a goal long sought by Alaska politicians, including her father, former senator and governor Frank Murkowski (R). She, too, wants “to see a lease sale this year,” she said. “We should not delay this opportunity,” she added.
An oil company wants to use giant chillers to refreeze the ground that climate change is thawing in order to drill for more oil — which will ultimately accelerate global warming - ConocoPhillips, one of the nation's largest oil companies, might soon be forced to face symptoms of a problem it helped create — melting permafrost wrought by climate change. In a planned project in northern Alaska, where global warming is causing the frozen soil to thaw, the company said it would use chillers to keep the ground beneath key infrastructure frozen, according to an environmental impact statement published by the Bureau of Land Management (BLM) last Friday, Bloomberg Law first reported. The oil-drilling infrastructure, itself, could also exacerbate the thawing of the ground, the agency said. The project, known as Willow, could produce more than 160,000 barrels of oil per day over a period of about 30 years, during which climate change is likely to worsen warming, BLM said. In the last 60 years, average temperatures in the region rose by 3 degrees and they're expected to increase by as much as 12 degrees by the end of the century "if global emissions continue to increase," the agency said. The transportation sector — which runs on fuels made with oil — is the largest source of planet-warming emissions in the US. The oil produced by the ConocoPhillips project is thus likely to accelerate global warming and the melting of Alaska's permafrost. "Climate change is affecting the Arctic and our operations, but these effects are incremental, which means they can be effectively monitored and addressed as they arise," a ConocoPhillips representative said in a statement. "For example, in addition to closely monitoring changes in the depth of the usual summertime thawing of the permafrost surface layer each year, where necessary we use cooling devices (thermosyphons) that can chill the ground enough in the winter to help it remain frozen through the summer."
BP disputes Greenpeaces oil spill claims - OIL company BP has insisted there has been no oil spill from its Andrew platform, 140 miles northeast of Aberdeen, after activists from Greenpeace said they had recorded pollution originating from the installation. Greenpeace said they had “witnessed” the spill from its ship Esperanza on Saturday and reported the incident to Marine Scotland and the Maritime and Coastguard Agency (MCA) the following day. The environmental activists, currently campaigning in the North Sea, said aerial photographs clearly show that the pollution originates from the Andrew platform, operated by BP. BP in Aberdeen said on Tuesday morning that water produced from platform operations was discharged to the sea in accordance with applicable regulation. A company spokesman said: “BP, as a responsible operator, carries out continuous monitoring analysis in addition to sampling as required by UK regulation. “The results of this analysis and sampling have been shared with the regulator and the composition of produced water from Andrew is within approved limits. “BP will continue to analyse the produced water from Andrew to ensure this remains the case. The spokesman added: “There is not a spill at the Andrew platform.” This video grab captured from drone footage shows oil floating on the surface of the North Sea in the Andrew oilfield.This video grab captured from drone footage shows oil floating on the surface of the North Sea in the Andrew oilfield. Climate finance adviser for Greenpeace UK Charlie Kronick responded: “Given the scale of the pollution witnessed, which goes beyond the 500m exclusion zone, it’s troubling if this is considered normal operating practice.
Venezuela coast could take half a century to recover from oil spill, researcher says (Reuters) - A strip of Venezuela’s western coastline boasting pristine beaches and fragile ecosystems like mangroves and coral reefs could take more than half a century to fully recover from the environmental impacts of a recent oil spill, a researcher said on Wednesday. The country’s opposition-controlled National Assembly last week opened an investigation to determine the causes and consequences of the oil slicks that began washing up on the Caribbean coast of western Falcon state in early August. “We project that the negative consequences on ecosystems and their components could last for 50 years or more,” Julia Alvarez, a biologist with Venezuela’s SVE ecological society, told reporters. Alvarez added that the area was also home to mollusks that likely would have died instantly on contact with the oil, threatening the livelihood of fishermen in the area at a time of severe economic contraction in Venezuela. Independent researchers and opposition lawmakers have said the spill likely originated from the El Palito oil refinery in nearby Carabobo state, citing satellite images showing slicks near the refinery in late July, days before oil began washing up on the coasts of Morrocoy national park. A report published by the SVE and Venezuela’s Simon Bolivar University cited satellite images showing that the slick first appeared on July 22 near the refinery. Given its length of 5.6 km (3.5 miles) and width of 1.5 km, the researchers calculated it contained around 26,700 barrels of oil.
Australians charged ‘substantially’ more for country’s gas than buyers overseas - Consumers and businesses on Australia’s east coast are paying significantly more for gas than international customers buying its liquified natural gas (LNG) exports, the competition watchdog has found.An interim report by the Australian Competition and Consumer Commission (ACCC) found domestic gas users were offered prices of between $8 to $11 a gigajoule in late 2019 and early this year. By comparison, LNG exporters were selling to their north Asian customers for less than $6 a gigajoule by early 2020.The LNG netback price, a measure of what a gas supplier would expect to receive, has been below $5.50 since May. The ACCC chair, Rod Sims, said he was concerned about a widening gap between domestic and export parity prices. It would have an “inevitable impact” on Australia’s industrial sector during a difficult economic period, he said.“I am yet to hear a compelling reason from LNG producers as to why domestic users are paying substantially higher prices than buyers in international markets,” Sims said in a statement. “When we have lower gas prices around the world, and the Australian market linked to world gas markets, it is vital that Australian gas users get the benefit.”International oil and gas prices have crashed in recent months due to the Covid-19 shutdown, Saudi Arabia and Russia flooding the global oil market and, according to some analysts, investors’ increasing wariness about the financial risk of backing fossil fuel assets as the world looks to cut greenhouse gas emissions.Sims said the impact of Covid-19 and the collapse in oil prices were being felt at all levels of the gas supply chain. “They have highlighted key areas of dysfunction in the market,” he said.The Morrison government and its handpicked National Covid Coordinating Commission have embraced the falling price as an opportunity and backed public support for gas infrastructure. The commission’s chair, Nev Power, has played down suggestions of a green recovery from the pandemic built on clean energy. A leaked draft report by the commission’s manufacturing taskforce recommended the government underwrite a massive expansion of the domestic gas industry – including government help to open new fields and build hundreds of kilometres of pipelines – that could reduce the domestic price to about $6 a gigajoule, with a goal of $4. Analysts have dismissed this as unrealistic.
Shell working to eliminate oil pollution in Niger Delta through effective operational activities - The cause of the spillage is one or more of the combinations of poor maintenance of oil infrastructure, corrosion, equipment failure, sabotage and theft. Experts say oil spill is a form of pollution caused by the release of a liquid petroleum hydrocarbon into the environment, especially the marine ecosystem, due to human activity. Not stressing much on the fact, the negative impacts caused in the processes of oil exploration and production are no less of commercial and environmental catastrophes, the world over. Since Nigeria discovered the ‘black gold’ in Oloibiri, in 1956, there has been a resultant environmental degradation from gas flaring, dredging of larger rivers, oil spillage and reclamation of land due to oil and gas extraction across the Niger Delta region. Chiefly as a result of intensified petroleum exploration and production since the 1960s, oil spillage has likewise intensified. However, for the last decade, in particular, the Shell Petroleum Development Company of Nigeria Limited (SPDC), a wholly-owned Shell subsidiary which operates an unincorporated joint venture (SPDC JV), has been working to eliminate spills from its operational activities and to lower the scale of oil pollution in its operations. According to the “Nigeria Briefing Notes 2020,” the SPDC JV, in 2019, reduced operational spills to its lowest levels and significantly reduced breaches from wellheads and cleaned up more spill sites than ever before. The energy company, in the review period, reported a decrease of 46.6 per cent or seven operational spills, relative to 15 spills recorded in the previous year of 2018. Not undermining illegal activities of oil theft, pipeline vandalism and others inhibiting a normal operating environment for its operations, the SPDC has remained resilience in accordance with its policy to eliminate spills from its operational activities. In fact, when a leak is identified, reports say the SPDC JV team responds to contain any of such spilled oil and clean up. In 2019, the company remediated 130 sites. That said, there is no doubt that, as a company operating to the same technical standards as other Shell companies globally, there is still much work to do to get the company to its target of “Goal Zero” in all spills, operational and third-party vandalism. But through a solid strategy, active partnerships, closer community engagements, bold security and new surveillance equipment, the SPDC has been steadily making good progress in the areas of performance, illegal activity, response and investigation, remediation and clean-up in Ogoniland.
Ship that oozed oil off Mauritius coast splits in two- A ship that has leaked more than 1,000 tonnes of oil in pristine waters off the coast of Mauritius has split in two. The bulk carrier MV Wakashio ran aground on a coral reef off the southeastern coast of Mauritius on July 25 and began oozing oil more than a week later, threatening a protected marine park boasting mangrove forests and endangered species. Mauritius declared an environmental emergency and salvage crews raced against the clock to pump the remaining 3,000 tonnes of oil off the stricken vessel. "It was confirmed on August 15 that the vessel has broken into two," the ship's operator Mitsui OSK Lines said in a statement Sunday, noting that the information came from the vessel's owner, Nagashiki Shipping. The split was caused by a crack in a cargo hold on its stern side, Mitsui said. Officials had been preparing for the development for days, and images taken Saturday indicated it was inevitable, with the two pieces only partially attached. 'Worst ecological disaster' Nearly all the remaining 3,000 tonnes of oil had been pumped off the ship by that time, though there were still 90 tonnes on board, much of it residue from the leakage. Oil-oozing ship off Mauritius coast Oil-oozing ship off Mauritius coast Mitsui noted Sunday that "an amount of unrecovered oil is believed to have leaked out of the vessel", without providing details. Thousands of Mauritians have volunteered day and night to clean the powder-blue waters that have long been a favourite among honeymooners and tourists. The spill is both an environmental and economic disaster for Mauritius, which relies heavily on tourism. The spill already qualifies as the "worst ecological disaster" for the Indian Ocean island nation, Greenpeace Africa campaigner Happy Khambule said, adding that it "puts unique species under immediate threats".
Japanese Tanker Splits in Two After Creating Environmental Disaster for Mauritius - The Japanese cargo ship that hit a coral reef near Mauritius and spilled thousands of metric tons of fuel into the island nation's turquoise waters split in two over the weekend, The Guardian reported. "At around 4.30 p.m., a major detachment of the vessel's forward section was observed," the Mauritius National Crisis Committee said in a statement regarding The MV Wakashio. "On the basis of the experts' advice, the towing plan is being implemented." The ship ran aground near Blue Bay Marine Park, a designated conservation area that is home to dozens of unique coral and fish species. To protect the area, crews used floating dams to cordon it off and divert the oil. India is helping the effort by sending 28 tons of material, including dams and barges to help lessen the oil spill impact, NPR reported. Tug boats are trying to haul the ship hundreds of miles into the Indian Ocean in order to sink it, but NPR reported that bad weather is hampering plans to remove it. It's estimated that at least 1,000 tons from the ship's 4,000 tons of oil spilled into the Indian Ocean, and by the time the ship split, nearly all of the remaining fuel had been removed, except for 90 tons that couldn't be reached since it was mostly leakage residue, CBS News reported. The Mauritius National Crisis Committee said that booms had been placed near the ship as it broke apart to absorb any of the remaining fuel leakage. The ship's owner, Nagashiki Shipping, will consider compensation requests from Mauritius, the BBC reported. The Japanese environment minister, Shinjiro Koizumi, said that Japan would send a team of officials and specialists to assess the damage, the Guardian reported. While the full impact of the oil spill is still unfolding, the damage could severely harm Mauritius' tourism-based economy for decades, The Guardian reported. Besides the hit to tourism, scientists noted that the damage could affect the local ecosystem for just as long. "This oil spill occurred in one of, if not the most, sensitive areas in Mauritius," oceanographer Vassen Kauppaymuthoo told Reuters. "We are talking of decades to recover from this damage, and some of it may never recover."
Birthday Party & Quest for WiFi led to Wakashio grounding off Mauritius - “The 58-year-old captain of the ill-fated Newcastlemax-type bulk carrier WAKASHIO could face negligence charges” after it was discovered the crew was celebrating a crewmember’s birthday as the ship edged closer to the Mauritius coastline seeking wifi signals just prior to the bulk carrier’s grounding on a reef off the island’s south coast. It appears seeking close proximity to the populated shore is a common practice for ships out to sea weeks at a time. It is done so crews can pick up TV signals, internet, and cell phone access. Crews can call home or catch up on the news.First reported by local newspaper “L’Express,” these bombshell revelations come from investigators interviewing the crew of the Japanese-owned WAKASHIO a Panamanian-flagged ship.The WAKASHIO grounded on a reef near UNESCO protected sites on the evening of July 25. Before the catastrophe, local authorities noticed the close proximity of the WAKASHIO to the Mauritius coastline and had been trying to contact the ship before the accident to warn it off from its flawed course. A later story after talking to the crew revealed the crew was celebrating a birthday and had missed the initial and urgent calls. The wrecked ship is now on the verge of breaking up (and has done so), has spilled around 1,000 tonnes of bunker fuel into the pristine Mauritian waters, and has created the republic’s greatest ecological disaster. The “Newcastlemax” designation refers to ship size; Maximum beam 50 meters with a maximum overall length of 300 meter. It is the largest vessel to be able to enter the port of Newcastle, Australia at about 185,000 DWT.
Mauritius Oil Spill Tragedy: How and Why the MV Wakashio Ran Aground, and Aftermath - A mysterious course change, a birthday party, oil on the beaches, and a billion dollars in compensation (maybe). Nagashiki Shipping’s Capesize bulk carrier Wakashio, which, loaded with oil, ran aground on a reef off Pointe Desny[1], southeast Mauritius, on July 25, 22 days ago, broke in two today.[2] Here’s before-and-after satellite imagery: Here’s a close-up image of the Wakashio: And here’s an aerial view, showing the nasty effects of oil on Mauritius’ turquoise water: (Most of the oil was removed from the tanker before it broke up, so this photo shows the vile residue.) A few days ago, Yves covered the grounding, the ecological effects, the (mostly successful) efforts to pump the low sulfur and diesel oil out of the ship to keep it out of the ocean, and the volunteer efforts to clean up the oil that did escape; she also gave a link to a crowd-funding site for cleaning and protecting the Mahebourg Lagoon[3] where the oil spilled. In this post, I’ll look at what we know today about how the Wakashio ran aground, the nature of the oil spill, and compensation for the spill.
Japan ramps up aid to Mauritius after oil spill - Japan is sending a second team of experts to help clean up more than 1,000 tons of oil that leaked from a Japanese-owned bulk carrier into pristine waters off the coast of Mauritius. The decision came as the Mauritian government vowed to seek compensation from the ship's owner and insurer for "all losses and damages" related to the disaster. Tokyo has already dispatched one team of six experts, including a coastguard expert and diplomats, to aid in the response. The new team of seven experts is to leave Japan on Wednesday and will carry materials such as sorbent to help clean up the oil, Japan's embassy in Mauritius said in a statement Monday. "The oil spill has caused serious damage over the southeast coastal environment of Mauritius and will have an inevitable impact on the country's tourism industry as well," the statement said. "Japan has decided to dispatch the team out of comprehensive and holistic consideration of all circumstances, including the request of urgent assistance from the government of the Republic of Mauritius and the friendly relationship between the two countries," it said. The MV Wakashio ran aground on a coral reef on July 25 and began oozing oil more than a week later. Both the Mauritian and Japanese governments have come under fire for not doing more immediately to prevent a large-scale spill. Japanese firm Nagashiki, the ship's owner, has pledged to "sincerely" respond to requests for compensation over damage to the marine environment. The ship split in half over the weekend, and a portion remains stranded on the reef. At a meeting Monday, the national crisis committee formed in response to the spill determined that it was "still risky to remove the remaining small amount of residual oil in the engine room" of that portion of the ship, according to a statement issued Monday night. "Oil-pumping operations should resume as soon as the weather permits," the statement said.
Japanese team- Mauritius oil cleanup won't be easy - Japanese experts assessing the impact of an oil spill caused by a Japanese ship off Mauritius say they have no idea how long it will take to clean up contaminated areas.Specialists in maritime anti-pollution measures began working at sites where oil from a ship operated by Mitsui O.S.K. Lines washed ashore. The vessel ran aground off the Indian Ocean island nation on July 25.The team reported its initial findings online on Friday, three days into the survey. One member said the contamination is widespread, with oil reaching some 10 kilometers north of the stranded ship.He said the vessel suffered such severe damage that an attempt to retrieve it from shallow waters of only 10 meters deep would be challenging. Another expert said mangrove swamps are inundated with oil, making it difficult to gain access and clean the entangled roots of the trees.
Cleanup of oil leaked from Japanese-owned ship to be prolonged-- A Japanese disaster relief team dispatched in response to the leakage of fuel oil from a Japanese-owned freighter that ran aground off Mauritius said Friday it cannot estimate when the cleanup operation could be completed. "The spilled oil has stuck to coastal mangroves where it is hard to remove," a member of the team said in an online press briefing hosted by the Japan International Cooperation Agency via the videoconferencing app Zoom. Using chemicals to dissolve the oil is not a viable option as it may harm the ecosystem, the team said, adding that it was not presently aware of any damage to underwater coral. The team, which consists of four experts from the Japan Coast Guard and one official each from the Foreign Ministry and JICA, arrived in the Indian Ocean island nation on Monday. A recent survey of the area found that oil had spread to around 10 kilometers north of where the ship had ran aground near Pointe d'Esny, an area designated as a wetland of international importance under the Ramsar Convention. More than 1,000 tons of fuel oil has leaked from the vessel, according to its operator Mitsui O.S.K. Lines Ltd. The team expects to finish removing all the oil remaining inside the vessel within the next few days, weather permitting. The Panama-flagged bulk carrier Wakashio, owned by Nagashiki Shipping Co., was carrying a total of some 3,800 tons of fuel oil when it ran aground on July 25. The oil began to leak last week when one of the five fuel tanks cracked.
Mauritius oil clean-up team turns focus from sea to mangroves - A Japanese disaster relief team helping to clean up a devastating oil spill off the Indian Ocean island nation of Mauritius is focusing on mangroves, beaches and wetlands after most of the oil at sea had been collected, it said on Tuesday. A Japanese bulk carrier struck a coral reef on July 25, spilling about 1 000 tonnes of fuel oil in what environmentalists say is the country's worst ecological disaster, killing wildlife and damaging pristine waters. "As most of the spilled oil at sea has been collected, we are moving into a next stage, with the focus on cleaning up the seaside and minimising the environmental impact," Keiji Takechi, deputy team leader, told an online news conference from Mahebourg, Mauritius. "Environmental experts who can give advice and instruction are needed now." Japan sent six officials, mainly oil spill experts, to Mauritius last week and plans to send another team of environment ministry officials and specialists this week. Team leader Junji Gomakubo said the focus was not only on the immediate impact. "We also need to think about plans to restore the environment in the long run, like in a 10-, 20-, 30-year span," he said. The full impact of the spill is still unfolding, scientists say. As island residents scrambled to mop up the oil slicks and clumps, they saw dead eels and fish floating in the water, as fuel-soaked seabirds limped ashore. The damage, scientists say, could impact Mauritius and its tourism-dependent economy for decades.
Mauritius Arrests Captain of Ship Behind Devastating Oil Spill - The captain of the ship that ran aground off Mauritius and caused an environmental crisis when oil began leaking close to the island nation's unique marine ecosystems was arrested, both police and the captain's lawyer said on Tuesday. The captain, 58-year-old Sunil Kumar Nandeshwar of India, was charged with endangering safe navigation,BBC News reported. Chief officer Tilak Ratna Suboda of Sri Lanka was also arrested, according to The New York Times. "We have arrested the captain of the vessel and another member of the crew. After having been heard by the court they have been denied bail and are still in detention," Inspector Siva Coothen told Reuters.Nandeshwar was arraigned in a district court in the Mauritius capital of Port Louis. Both men will appear in court again Aug. 25, Nandeshwar's lawyer Ilshad Munsoor told The New York Times.The MV Wakashio ran aground on one of Mauritius' reefs July 25 and began leaking oil less than two weeks later. It is estimated that at least 1,000 tons of the roughly 4,000 tons on the ship spilled into the Indian Ocean. The rest was removed before the ship split in two over the weekend, except for 90 tons still on the ship.Rough weather conditions have made the remaining oil unsafe to remove, BBC News reported."Due to the adverse weather conditions, it is still risky to remove the remaining small amount of residual oil in the engine room," the National Crisis Management Committee said on Monday.While other major oil spills have been worse in terms of total oil released into the environment, this spill was catastrophic because it occurred near two protected marine ecosystems and one wetland of international importance.Scientists say damage from the spill could impact Mauritius' marine life and related tourism for decades, according to Reuters. "This oil spill occurred in one of, if not the most, sensitive areas in Mauritius," oceanographer Vassen Kauppaymuthoo told Reuters Aug. 13. "We are talking of decades to recover from this damage, and some of it may never recover." It still isn't clear why the ship passed so close to shore when it ran aground. The Mauritius coast guard tried repeatedly to warn the vessel that it had charted a dangerous course, but received no reply, an anonymous maritime official told Reuters.
Greenpeace warns Mauritius not to sink vessel that caused oil spill - Plans by Mauritius to sink part of a broken-up vessel that caused a disastrous oil spill should be shelved, environmental watchdog, Greenpeace, said on Wednesday. “Out of all available options, the Mauritian government is choosing the worst one,” said Happy Khambule of Greenpeace Africa. “Sinking this vessel would risk biodiversity and contaminate the ocean with large quantities of heavy metal toxins, threatening other areas as well, notably the French island of La Reunion,” he added. The Mauritian government announced its plan to sink part of the Wakashiho earlier in the week, after the Japanese-owned ship broke in two weeks after running aground off the tourist island. The government said the front of the vessel, owned by Nagashiki Shipping, would be towed into deep waters and sunk, while the rest would be removed bit by bit. The vessel leaked about 1,000 tons of the 4,000 tons of fuel oil it was carrying into the popular honeymoon resort’s pristine coastal waters, an area that is home to rare flora and fauna. The company and the Mauritian government have been under increasing pressure to explain why the vessel sailed so dangerously close to the reef and why it took authorities days to arrive at the scene. Authorities blame bad weather for the delay. The ship’s captain, an Indian national, and officer, a Sri Lankan, were arrested on Tuesday in the capital St Louis and have been charged with endangering safe navigation.
Mauritius oil spill puts spotlight on ship pollution- Small island nations face an existential and developmental threat from ship-source pollution endangering their vulnerable marine ecosystems and ocean economies. An effective international legal regime can help. Often close to world shipping lanes, small island and coastal nations are at particular risk from oil spills. Reliant on the marine environment and its biodiversity for tourism, fishing and aquaculture, islanders face an existential threat when oil spills happen in their waters. This is why the environmental crisis unfolding in Mauritius is of grave concern. It also brings into focus the international legal framework in place to provide support when ship-source environmental disasters strike, a new UNCTAD article says. The seas and their use are governed by several international conventions. But some are not ratified by all countries that might benefit, and others are yet to enter into force. This creates murky waters when oil spills happen, as not all parties have the same liability and compensation recourse, depending on which kinds of ships are responsible for the pollution and whether they have signed up to existing conventions. “There’s a need for universal participation in the existing international legal framework, where all nations are party to agreements, so when incidents like this occur, vulnerable countries are protected,” said Shamika N. Sirimanne, UNCTAD’s technology and logistics director. She said such oil spills herald negative environmental and socio-economic consequences for developing countries, especially small island developing states (SIDS). Ms. Sirimanne added: “Sustainable Development Goal 14 calls on us to protect life below water and this means minimizing pollution at every possible turn, including putting all necessary precautions in place to manage environmental disasters like oil spills when they do happen.”
India's crude imports fall to lowest in over a decade in July - (Reuters) - India’s crude oil imports fell in July to their lowest since March 2010 as fuel demand slowed amid renewed coronavirus-induced lockdowns and closures of refinery units for maintenance, government data showed on Thursday. Crude oil imports last month slumped about 36.4% from a year earlier to 12.34 million tonnes, or 2.92 million barrels per day, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed. That marked a fourth straight monthly decline. Fuel demand in the world’s third-biggest oil importer and consumer also fell, posting a fifth consecutive year-on-year drop. The country reported a record daily jump of 69,652 coronavirus infections on Thursday, taking the total number of cases to 2.84 million, data from the federal health ministry showed. India is also Asia’s third-biggest economy, which imports and exports refined fuels. Refined product imports surged 46.4% to 4.07 million tonnes year-on-year, mainly due to a sharp jump in India’s fuel oil imports. Fuel oil imports rose to record 1.22 million tonnes in July from 127,000 tonnes a year ago. Reliance Industries Ltd (RELI.NS), operator of the world’s biggest refining complex, has been buying some straight-run fuel oil from countries including Iraq to process at its revamped coker, to maximise refining margins.
COVID-19 Positive Russian Oil Minister Will Join OPEC+ Meeting – Russia’s Energy Minister Alexander Novak will take part in the virtual meeting of the OPEC+ monitoring panel on Wednesday, despite testing positive for COVID-19, Russia’s energy ministry said on Tuesday. Earlier on Tuesday, Russian Prime Minister Mikhail Mishustin said that Novak had tested positive for the coronavirus while he was on a visit to Russia’s Far East. Novak returned to Moscow and will work remotely, the ministry said.Novak feels good and doesn’t have any symptoms, and he plans to take part in the OPEC+ panel’s meeting on August 19 via video conference, a representative of the Russian energy ministry told Russian outlet RBC.Prime Minister Mishustin and Vladimir Putin’s Press Secretary Dmitry Peskov have recovered from COVID-19 after contracting the virus earlier this year.The Joint Ministerial Monitoring Committee (JMMC) holds meetings every month until the end of 2020, instead of ahead of every full OPEC+ meeting only, because of the volatile oil market and the highly uncertain trajectory of global demand recovery.The JMMC is meeting this week, but it will not discuss any revisions of the ongoing production cut pact and is not expected to make any major decisions to tweak the deal, Novak said last week.The OPEC+ coalition saw its compliance rate with the oil production cuts at 95 percent in July, four sources from the group told Reuters on Monday, which is a level similar to the previous month, if the additional one-month voluntary cuts from Saudi Arabia, the UAE, and Kuwait for June are excluded. At last month’s panel meetings in mid-July, the JMMC noted an improved compliance rate with the cuts. The overall compliance rate for the OPEC+ group was a record-breaking 107 percent in June, but it was due to the additional voluntary contributions from Saudi Arabia, the United Arab Emirates, and Kuwait, which cut a total of 1 million bpd in June on top of their shares
Oil steady as China's plans to boost U.S. imports counters tensions -- Oil prices steadied on Monday as news that China planned to ship large volumes of U.S. crude in August and September countered rising tensions between the two countries and a delay in the review of their trade pact over the weekend. Brent crude was up 17 cents at $44.97 per barrel, and West Texas Intermediate crude traded 32 cents higher at $42.33 per barrel. The emergence of new coronavirus hot spots particularly in Europe also put pressure on fuel demand and oil prices, analysts said, while a weak dollar lent some support. "Clearly the market is not tightening as quickly as initially anticipated. Demand is taking longer than expected to get back to normal levels," ING Group said. Market sentiment soured after the United States and China delayed a review of their Phase 1 trade deal initially slated for Saturday, citing scheduling conflicts. However, in a positive signal, Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September. Investors are also looking for more clues on future supply from a meeting this week of a panel representing ministers of the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+. The Joint Ministerial Monitoring Committee (JMMC) monitors OPEC+ production curbs agreed earlier this year. Last month, the JMMC recommended that cuts be eased from Aug. 1 to about 7.7 million barrels per day (bpd) from a reduction of 9.7 million bpd since May, in line with an earlier OPEC+ agreement. Iran's oil minister, Bijan Zanganeh said "OPEC's performance has been successful because the price of oil has risen from $16 in May to around $45 and has stabilised." ANZ estimated that demand had risen 8 million barrels per day (bpd) over the past four months to 88 million bpd - still 13 million bpd below this time last year. .
Oil Rises on Commodities Rally; Talk of OPEC Cuts -Crude prices rose Monday, helped by a broad commodities rally and a media report suggesting that OPEC+ members were pulling their weight in complying with the alliance’s production cuts. A panel of the Saudi-steered and Russia-assisted Organization of the Petroleum Exporting Countries and its allies will meet Wednesday to review the market amid efforts to roll back some two million barrels from production cuts of around 9.6 million barrels per day agreed to in May. A Reuters report on Monday, quoting two OPEC+ sources, said the group members’ compliance with cuts was seen at around 97% in July. New York-traded West Texas Intermediate, the benchmark for U.S. crude futures, settled up 88 cents, or 2.1%, at $42.89 per barrel. London-traded Brent, the bellwether for global crude prices, closed the New York session up 57 cents, or 1.4%, at $45.37. Crude prices were also helped by the broader outperformance of commodities amid plunging yields on the U.S. 10-Year Treasury note and the slide of the Dollar Index. Yields on the 10-year note initially plunged 5% on Monday, before recovering slightly to show a deficit of 3.8% late afternoon in New York. The dollar index, which pits the greenback against a basket of six currencies, was down to as low as 92.75 earlier in the day before stabilizing to 92.85. China is living up to its end of the trade deal the two parties signed in January, U.S. President Donald Trump said Monday, even though the nation has fallen short so far of promised purchases of U.S. products, Reuters reported. Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September. The U.S. Energy Information Administration’s estimates of unexpectedly strong crude stockpile draws at home have also kept oil supported, despite the International Energy Agency forecasting a weaker global outlook for fuels amid the Covid-19 outbreak.
Oil steadies as demand fears offset high OPEC+ compliance - (Reuters) - Oil prices steadied on Tuesday as high compliance with supply cuts from the OPEC+ producer group offset demand fears from the new coronavirus. Brent crude futures rose 9 cents to settle at $45.46 a barrel. U.S. West Texas Intermediate (WTI) crude futures ended unchanged at $42.89 a barrel. Supporting prices on Tuesday, a technical panel found that compliance with OPEC+ oil output cuts in July was between 95% and 97%, according to a draft report seen on Monday by Reuters. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a grouping known as OPEC+, eased their cuts in August to 7.7 million barrels per day (bpd) from 9.7 million bpd previously. OPEC+ will hold a ministerial panel meeting on Wednesday. “Expect OPEC+ to communicate that they request strict compliance from all members and cheer for the success of the measures to date,” said Rystad Energy’s Bjornar Tonhaugen. Still, the coronavirus pandemic, which has raged for months, shows no signs of letting up. In the Americas alone, almost 11.5 million have contracted the disease, and over 400,000 people have died as a result of the pandemic, the World Health Organization regional director Carissa Etienne said on Tuesday. The United States and Brazil are the biggest drivers of the COVID-19 case count in the Americas, Etienne added. “There are still ongoing concerns about COVID and there are continuing concerns about the lack of a deal in Congress for stimulus,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. The U.S. Congress has so far failed to agree on another fiscal relief package to stem economic fallout from the pandemic. Meanwhile, some European countries have renewed travel quarantines, which impact jet and motor fuel demand.
Oil rises slightly as inventory draw outweighs demand worries -Oil prices were little changed on Wednesday as concerns lingered over soft U.S. fuel demand while global producers feared a second prolonged wave of the coronavirus pandemic was a major risk for the market recovery. U.S. crude oil stockpiles fell 1.6 million barrels last week, while fuel demand was down 14% from the year-ago period over the last four weeks, Energy Information Administration data showed. "The drop in gasoline demand week-over-week was a concern. That's still showing weakness," said Phil Flynn, a senior analyst at Price Futures Group in Chicago. "The only thing that is holding us back is demand," he said. Brent crude futures were down 13 cents at $45.33 a barrel, but still not far off a five-month high above $46 a barrel reached earlier in August. West Texas Intermediate crude settled 4 cents higher at $42.93 per barrel. Global oil demand should recover to pre-pandemic levels as soon as the fourth quarter, the Saudi Energy minister said, while urging compliance with a global deal to cut output. The Organization of the Petroleum Exporting Countries and its allies such as Russia, a grouping dubbed OPEC+, began a meeting on Wednesday to review the compliance levels with the deal, aimed at supporting prices. . "Based on the average projections of various institutions, ... it is estimated that the world will reach about 97% of pre-pandemic oil demand during the fourth quarter - which is a big recovery from the huge falls in April and May," said Prince Abdulaziz bin Salman. A draft OPEC+ statement, seen by Reuters, said a second prolonged wave of the pandemic was a major risk for the oil market recovery. OPEC+ sources have said the group was unlikely to change on Wednesday its output policy, which currently calls for reducing output by 7.7 million barrels per day (bpd) versus a record high 9.7 million bpd up until this month.
U.S. oil benchmark erases loss, finishes flat after EIA reports drop in gasoline inventories - The U.S. crude benchmark shook off early losses to end little changed on Wednesday, finding support after government data showing a fall in gasoline inventories soothed jitters over demand as a pandemic-lightened driving season moves into its final stretch.Traders were also keeping an eye on a meeting of an OPEC+ panel that was expected to recommend sticking with the current schedule of production curbs as major producers gauge the COVID-19 pandemic’s affect on the demand outlook.West Texas Intermediate crude for September delivery rose 4 cents, or 0.1%, to close at $42.93 a barrel on the New York Mercantile Exchange, while October WTI CLV20, -1.33%, the most actively traded contract, lost a penny to close at $43.11 a barrel. October Brent crude fell 9 cents, or 0.2%, to $45.37 a barrel on ICE Futures Europe.The Energy Information Administration said U.S. crude inventories last week fell by 1.6 million barrels, while gasoline inventories were down 3.3 million barrels. Oil had been under pressure after the American Petroleum Institute late Tuesday reported a rise in gasoline inventories, which would be a bearish sign in the final stretch of summer driving season. The EIA said distillate inventories rose by 200,000 barrels. September gasoline futures rose 0.75 cent, or 0.6%, to close at $1.2905 a gallon.
Oil drops as demand risk rises, U.S. stockpiles fall less than expected - Oil prices fell on Thursday as major producers warned of a risk to demand recovery if the coronavirus crisis is prolonged, while U.S. crude inventories dropped less than expected. Brent crude was down 36 cents, or 0.8%, at $45.01 a barrel by 0442 GMT, having slipped 0.2% in the previous session. U.S. oil was down 38 cents, or 0.9%, at $42.55 a barrel, after inching higher on Wednesday. Stockpiles of crude in the United States fell for a fourth straight week, even as net imports rose. However, the 1.6 million barrel decline was less than a Reuters poll showing expectations for a 2.7 million barrel fall. Stockpiles of crude in the United States fell a fourth straight week, even as net imports rose, the Energy Information Administration said on Wednesday. However, the 1.6 million-barrel decline for the week to August 14 was less than a Reuters poll showing expectations for a 2.7 million-barrel fall. Fuel demand was down 14% from the year-earlier period over the last four weeks, the EIA data also showed. Global oil demand should recover to pre-pandemic levels as soon as the fourth quarter, the Saudi energy minister said on Wednesday, while urging partners to comply with a deal to cut output. Saudi Energy Minister Prince Abdulaziz bin Salman was speaking at a virtual meeting of the Organization of the Petroleum Exporting Countries and allies such as Russia – a grouping known as OPEC+. The meeting was reviewing compliance with production cuts and left output reductions unchanged. "The positive outcome from the OPEC+ meeting was counter-balance (to) the EIA reporting that U.S. oil inventories last week fell by (less than the) consensus," s Still, a draft OPEC+ statement, seen by Reuters, said a second extended wave of the pandemic posed a major risk for the oil market recovery. The group pressed members such as Nigeria and Iraq to do more to meet their quotas after they exceeded them between May and July. OPEC alone in the past decades generally produced well over 30 million barrels per day of oil but after this year's cuts, its output stood at 20 million to 22 million bpd.
Oil prices pull back as worries linger over demand - Oil futures ended lower Thursday, under pressure after a rise in weekly jobless claims added to concerns about the outlook for demand already shaken by minutes of the Federal Reserve’s last meeting. West Texas Intermediate crude for September delivery declined 35 cents, or 0.8%, to finish at $42.58 a barrel, while October WTI, the most actively traded contract, fell 29 cents, or 0.7%, to $42.82 on the New York Mercantile Exchange. The global benchmark, October Brent crude BRNV20, -0.20%, finished down 47 cents, or 1%, at $44.90 a barrel on ICE Futures Europe.“The energy market is seen as a good barometer for global demand and seeing as dealers are less optimistic about the state of the global economy in light of [Wednesday’s] Fed minutes, oil has tumbled,” said David Madden, analyst at CMC Markets, in a note.Crude futures remained lower after data showed the number of first-time U.S. weekly jobless claims rose back above 1 million last week.Minutes of the Fed’s July 28-29 meeting released Wednesday afternoon said staff economists told policy makers they were lowering their estimate for economic growth over the second half of the year. Meanwhile, a meeting of the OPEC+ alliance’s Joint Ministerial Monitoring Committee on Wednesday offered no surprises, with ministers maintaining output cuts of 7.7 million barrels a day, but emphasizing the need for countries that failed to cut enough in previous months to make compensatory reductions this month and next. Support in Wednesday’s session also was tied to weekly inventory data from the Energy Information Administration, which said U.S. crude inventories last week fell by 1.6 million barrels, while gasoline inventories were down 3.3 million barrels. Oil had been under pressure after the American Petroleum Institute late Tuesday reported a rise in gasoline inventories, which would be a bearish sign in the final stretch of summer driving season. The EIA said distillate inventories rose by 200,000 barrels.But the data didn’t dispel worries about demand as the economy continues to wrestle with the COVID-19 pandemic.Gasoline demand fell to 8.6 million barrels a day, remaining around 10% lower than in previous years, wrote analysts at Commerzbank. The fall in gasoline inventories was presumably due not only to a fall in gasoline production but also a fall in gasoline imports, that dropped by almost half to 557,000 barrels a day, they said.
Oil ends lower on demand worries - Oil futures finished lower Friday, under pressure from continued worries over prospects for demand as the COVID-19 pandemic undermines economic growth. West Texas Intermediate crude for October delivery lost 48 cents, or 1.1%, to finish at $42.34 a barrel on the New York Mercantile Exchange, while the global benchmark, October Brent crude shed 55 cents, or 1.2%, to settle at $44.35 a barrel on ICE Futures Europe. WTI ended the week with a gain of 3 cents, or 0.1%, while Brent fell 1%. Crude remained under pressure after oil-field services company Baker Hughes Co. BKR, -1.78% reported that the number of U.S. oil rigs rose by 11 this week to 183, ending a three-week streak of declines. The number of rigs has fallen sharply this year in response to crude’s earlier pandemic-induced plunge, with the number of units down 571 from the same time last year. Eurozone purchasing managers index readings Friday showed a slowdown in the region’s economic activity, while data out of Japan indicated a continued decline in activity. Meanwhile, a renewed rise in COVID-19 cases in parts of Europe and elsewhere have underlined worries about the outlook for energy demand. In Asia, a cutback in refining activity in response to poor fuel demand is a troubling sign, analysts said. “Simply put, demand for crude has waned over the past month. Firm refinery run rates paired with an increased amount of refined product output and weak end use demand leads to an excess of gasoline and diesel being exported or dumped onto the open market,” said Michael Tran, analyst at RBC Capital Markets, in a note. “This pattern crushes regional refinery margins, which can result in lower refinery run rates and crude demand destruction,” he said, noting that Asian margins are a leading market indicator heading into fall and the end of the summer driving season. Crack spreads — the difference between the price of crude and the petroleum products refined from it — “will not improve until either demand leads the way or run cuts curtail output,” he said. September natural-gas futures jumped 4.1% to end at $2.488 per million British thermal units, leaving it with a weekly rise of 3.9%. September gasoline fell 1.24 cents, or 1%, to $1.2841 a gallon, while September heating oil shed 3.87 cents, or 3.1%, to close at $1.2080 a gallon. Gasoline saw a weekly rise of 3.2%, while heating oil retreated 2.3%.
Oil slides 1%, but still posts fifth week of gains in last six - Oil prices dropped on Friday as the economic recovery worldwide runs into stumbling blocks due to renewed coronavirus lockdowns, even as major global crude producers limit crude supply. The euro zone's economic recovery from its deepest downturn on record has stalled this month as pent-up demand unleashed by the easing of lockdowns in July dwindled, a survey showed. By contrast, U.S. housing and manufacturing survey data came in better than expected, offsetting a surprising increase in jobless claims on Thursday. Brent crude futures were down 84 cents, or 1.9%, at $44.06 a barrel, heading for a nearly 2% weekly fall. West Texas Intermediate crude futures settled 48 cents, or 1.12%, lower at $42.34 per barrel. "Right now, the concerns about demand and the uptick in COVID cases seems to be the big reason why we're weaker," said Phil Flynn, senior analyst at Price Futures Group in Chicago. India's crude oil imports fell in July to their lowest level since March 2010, while U.S. motorists drove 13% fewer miles in June than a year earlier, according the U.S. Department of Transportation. Libya's national oil company said it could restart oil exports after the North African country's internationally recognized government in Tripoli announced a ceasefire, putting further pressure on oil prices. "This is a market that can't afford to absorb any additional barrels," said John Kilduff, partner at Again Capital LLC in New York. OPEC+, which consists of the Organization of the Petroleum Exporting Countries and allies, including Russia, was focused on ensuring members that had overproduced against their commitments would reduce output. An internal report showed the group wanted oversupply between May and July compensated for with cuts this month and next, Reuters reported. It also showed OPEC+ expects oil demand in 2020 to fall by 9.1 million barrels per day, and by as much as 11.2 million bpd if there is a resurgence of coronavirus infections.
UN chief urges Yemen’s Houthis to grant access to decaying oil tanker - UN Secretary-General Antonio Guterres urged Yemen’s Houthis to allow an assessment team to travel to a decaying oil tanker that is threatening to spill 1.1 million barrels of crude oil off the war-torn country’s coast. More then a month ago Houthi officials said they would agree to allow a UN mission to conduct a technical assessment and whatever initial repairs might be feasible on the Safer tanker. But the United Nations is still waiting for formal authorization. Guterres is “deeply concerned” about the condition of the oil tanker, UN spokesman Stephane Dujarric said on Friday. The United Nations has warned that the Safer could spill four times as much oil as the 1989 Exxon Valdez disaster off Alaska. “He specifically calls for granting independent technical experts unconditional access to the tanker to assess its condition and conduct any possible initial repairs,” Dujarric said. “This ... will provide crucial scientific evidence for next steps to be taken in order to avert catastrophe.” The Safer tanker has been stranded off Yemen’s Red Sea oil terminal of Ras Issa for more than five years. The UN Security Council has also called on the Houthis to facilitate unconditional access as soon as possible.
IMO assists efforts to prevent an oil spill from FSO Safer - IMO is contributing to international efforts aimed at preventing an oil spill from the deteriorating floating storage and offloading unit FSO Safer moored off the coast of Yemen. The Organisation is also leading on the contingency planning efforts aimed at enhancing preparedness to mitigate the environmental impacts of a potential spill. IMO has mobilised a technical expert to develop contingency plan based on a variety of risk scenarios, which would play a key role in improving the efficiency, effectiveness and management of emergency response operations in the event of a spill from the FSO Safer. The contingency plan will outline the roles and responsibilities of key players and assist in coordinating the response. It will also clarify equipment requirements and locations of stockpiles and identify priority areas. IMO will also provide training to the relevant actors. The expert is currently working remotely in close communication with all relevant stakeholders. IMO is offering technical advice to support the joint international efforts, led by the wider UN family*, to assess the current condition of the FSO Safer and examine ways to secure the 150,000 MT of light crude oil currently on board. Following recent reports of water entering the engine room, it is considered that the risk of an oil spill from the FSO Safer is increasing. The floating storage and offloading unit, moored off the coast of Yemen, has not been inspected or maintained since 2015, leading to serious concerns about its integrity. “While IMO is proactively working on contingency planning, it is hoped that international efforts will succeed in paving the way to assessing the state of the FSO and taking necessary measures, in order to prevent an oil spill from occurring”, said Patricia Charlebois, Deputy Director, Subdivision for Implementation at IMO. “In the case of oil spills, prevention is always better than cure. However, should these efforts fail, we want to ensure adequate preparedness measures are in place”, she added. Ms. Charlebois highlighted that the situation is particularly complex due to the conflict in the region and the COVID-19 pandemic.
Saudi Arabia Refuses To Learn From Its Two Failed Oil Price Wars - Having failed to achieve the slightest semblance of success in the two oil price wars that it started – the first running from 2014 to 2016, and the second running from the beginning of March to effectively the end of April this year – it might be assumed that key lessons might have been learned by the Saudis on the perils of engaging in such wars again. Judging from various statements last week, though, Saudi Arabia has learned nothing and may well launch exactly the same type of oil price war in exactly the same way as it has done twice before, inevitably losing again with exactly the same catastrophic effects on it and its fellow OPEC members. At the very heart of Saudi Arabia’s problem is the collective self-delusion of those at the top of its government regarding the Kingdom’s key figures relating to its oil industry that underpins the entire regime. These delusions are apparently not discouraged by any of the senior foreign advisers who make enormous fees and trading profits for their banks from Saudi Arabia’s various follies, most notably oil price wars. It is, in the truest sense of the phrase, aperfect example of ‘The Emperor’s New Clothes’, although in this case, it does not just pertain to Crown Prince Mohammed bin Salman (MbS) but to all of the senior figures connected to Saudi Arabia’s oil sector. One of the most obvious examples of this is the chief executive officer of Saudi Arabia’s flagship hydrocarbons company, Saudi Aramco (Aramco), Amin Nasser, who said last week – bewilderingly for those who know even a modicum about the global oil markets – that Aramco is to go ahead with plans to increase its maximum sustained capacity (MSC) to 13 million barrels per day (bpd) from 12.1 million bpd. Quite aside from the sheer pointlessness of this posturing in a world already awash in oil as a result of the negative demand effect of the COVID-19 pandemic and the output overhang from the oil price war just ended, this comment from Saudi Arabia’s third-ranking oil man (after MbS, albeit by the loosest possible definition, and Energy Minister, Abdulaziz bin Salman al Saud), is extremely misleading. As such, it feeds into the oil market’s collective understanding since the 2014-2016 oil price war that anything that Saudi Arabia says about its oil industry is not to be taken as true, without a lot of additional fact-checking. Regarding the ‘maximum sustained capacity’ statement, to begin with, this term is one that has been repeatedly used by Saudi Arabia since the first oil price war disaster to cover for two other long-running delusions relating to the real level of its crude oil reserves and to the real level of its spare capacity.
Trump Touts "Making Very Big Oil Deals" As Condition For Rapid Troop Exit From Iraq - President Trump has again vowed that all US troops will soon be out of America's second longest occupation in Iraq (behind the longest running war in Afghanistan). But curiously, like in neighboring Syria, he tied concluding the US mission there directly to the possibility of oil and resource benefits for American companies:“We look forward to the day when we don’t have to be there,” Trump said during an Oval Office meeting with Iraqi Prime Minister Mustafa al-Kadhimi.“We were there and now we're getting out. We’ll be leaving shortly and the relationship is very good. We’re making very big oil deals. Our oil companies are making massive deals. ... We’re going to be leaving and hopefully we’re going to be leaving a country that can defend itself.” Over the past months the president has been on record as desiring a troop withdraw as soon as possible, following tensions in January which nearly took the Pentagon to war against Iran-backed Shia militias in the country, in the wake of the US assassination of IRGC Quds Force chief Qassem Soleimani.But the persistent key question remains as to the future presence of the some 5,000 US troops still in the country is the timetable. When pressed by reporters on the issue, Trump turned to Secretary of State Mike Pompeo, who replied: “As soon as we can complete the mission. The president has made very clear he wants to get our forces down to the lowest level as quickly as we possibly can. That’s the mission he’s given us and we’re working with the Iraqis to achieve that.” So it appears these twin objectives have emerged out of years of endless mission-creep and ambiguously defined "justifications" for staying there (a hallmark of the so-called 'war on terror' era: forever shifting objectives, or in some cases no objectives at all):
- Countering Iran and leaving an Iraqi security force strong enough to be fully independent of the Shia militias.
- "Make very big oil deals," as Trump underscored Thursday.
United Arab Emirates-Israel agreement cements US-led alliance against Iran - US President Donald Trump announced last Thursday that the United Arab Emirates (UAE) is to “normalise” relations with Israel in a deal to be known as the “Abraham Accords.” The Abraham Accords supposedly makes recognition of Israel dependent upon Israeli Prime Minister Benjamin Netanyahu halting plans to annex swathes of Palestinian land in the West Bank occupied since the June 1967 war. The aim is to side-line the fate of the Palestinians, which for decades defined the Arab states’ attitude towards the Zionist state, in order to cement an alliance between the Sunni petro-monarchies and Israel against Iran.The UAE claimed publicly that its decision was a way of encouraging peace efforts and taking Israel’s planned annexation of parts of the West Bank off the table, arguing that relations with Israel should be tempered with “realism.” Netanyahu rejected this, insisting that he had only agreed to “delay” the annexation, with the plan remaining “on the table.”The agreement is in reality bound up with the Trump administration’s “maximum pressure” sanctions regime targeting Iran, tantamount to a state of war, aimed at overturning its government and installing a client regime that would reinforce US hegemony over the resource-rich Middle East and strengthen Washington’s position against China.The announcement is the result of years of backroom talks on issues ranging from trade and security to intelligence-sharing that included Israel’s opening of an office in 2015 in Abu Dhabi. Its timing meets the needs of all three parties. It comes as Israel’s economy is unravelling in the wake of the COVID-19 pandemic and as Netanyahu’s trial proceedings on charges of bribery, corruption, and breach of trust in three separate cases move to the evidence hearings set for January. It gives the beleaguered Netanyahu, who heads a fractious coalition and faces increasing opposition from his support base among far-right forces, the chance to pose as Israel’s master statesman.It likewise enables Trump, who is trailing in the polls against Joe Biden, the Democrats presidential candidate, to claim a diplomatic “triumph” after his administration’s draft Security Council resolution extending a UN ban on arms sales to Iran, due to expire in October, was defeated, paving the way for Iran to purchase arms from other major powers. The UAE is seeking Washington’s approval for its request to purchase the US F-35 advanced combat aircraft and armed unmanned aerial vehicles, reversing its previous reliance on French fighter jets and Chinese drones. It is also seeking US support for major concessions from Qatar—in exchange for lifting the UAE’s, Saudi Arabia’s and Bahrain’s three-year long blockade of Qatari airspace and land crossings.
In act of high seas piracy, US hijacks Iranian oil bound for Venezuela - The US interdiction of oil shipments bound from Iran to Venezuela represents a dangerous escalation of the “maximum pressure” sanctions that Washington has imposed against both countries, raising the threat of armed conflict. The Department of Justice issued a statement Friday bragging that it had carried out the “largest-ever seizure of fuel shipments from Iran.” It said that “approximately 1.116 million barrels of petroleum” had been stolen “with the assistance of foreign partners.” There has been no indication of what “foreign partners” were involved in this act of piracy, but US officials claim that the seizure did not involve military force. Rather, it appears that some combination of threats and bribes were used to convince the Greek owners of the four tankers carrying the fuel— identified as the Bella, Bering, Pandi and Luna, all of them flying Liberian flags–to give it up. According to the Wall Street Journal, the threats included sanctions against the ships’ owners and crews that would prevent them from accessing US ports, US banks and US dollars. The pseudolegal basis for Washington’s act of high seas piracy was a seizure order issued by a US District Court judge in Washington, DC based upon the Justice Department’s claim that the oil constituted “foreign assets or sources of influence” for the Islamic Revolutionary Guard Corps, a major component of the Iranian military, which Washington has branded as a “Foreign Terrorist Organization.” This designation, imposed without any justification in April of last year, represented the first time that Washington has deemed a branch of another country’s government as “terrorist.” Since unilaterally abrogating the JCPOA nuclear deal between the major powers and Tehran in 2018, the Trump administration has imposed a crippling economic sanctions regime against Iran tantamount to a state of war, while building up US forces in the region in preparation for military confrontation. Gloating over the operation, President Donald Trump falsely claimed at a White House press briefing last Friday, “We seized the tankers, and we’re moving them ... to Houston.” In reality, the oil was offloaded from the Greek-owned vessels onto tankers contracted by the US military. Two of these transfers took place off the coast of Oman, and two off the coast of Mozambique. The Greek-owned ships themselves were not seized. While denouncing the US action, Iranian officials have pointed out that the oil had already been sold to Venezuela and did not belong to Iran. Furthermore, the ships themselves were neither owned nor flagged by Iran.
Iran Slams US "Pirates Of The Caribbean" But Insists Seized Tankers & Fuel Didn't Belong To Them - President Trump confirmed at the White House press conference on Friday: “We have four tankers. They are going to Houston, and they’re there… Iran is not supposed to be doing that. And so we did — we seized the tankers, and we’re moving them, and moved, to Houston.”Yet details have not emerged as to precisely how the seizure of the fuel aboard four Iranian vessels - the Luna, Panid, Bering, and Bella - went down last Thursday. A US official emphasized to the WSJ last week the vessels were taken "without the use of military force" but provided no further details.Meanwhile Tehran appears to be disputing that Iranian fuel allegedly bound for Venezuela was taken at all. Foreign Minister Javad Zarif condemned US authorities as "Pirates of the Caribbean" in a tweet, adding that, "Sadly for them, stolen booty wasn't Iran's." "Pirates of the Caribbean" have their own judges and courts now. Sadly for them, stolen booty wasn't Iran's. Fuel was sold F.O.B. Persian Gulf. Ship and flag weren't ours either. Hollow, cheap propaganda doesn’t deflect from miserable failure of US diplomatic malpractice at UN. — Javad Zarif (@JZarif) August 15, 2020 Previously the DOJ said it sought a federal court order “seeking to forfeit all petroleum-product cargo aboard four foreign-flagged oil tankers” and that it was done in accord with US laws targeting sanctions-busting. As geopolitical commentator Jason Ditz has pointed out: "It is not clear how exactly the shipment was seized. With US sanctions on Venezuela targeting the maritime industry, it is possible the shipowners were threatened with the loss of registration or insurance, which could have been enough for them to comply and sail to a US port." Iran's president Hassan Rouhani also slammed US claims of the seizure as "a lie" to cover up the "humiliation" of the UN Security Council failure to extend the Iran arms embargo:
Same Narrative, Rotating 'Bad Guys'- Iran Paid Off Taliban Insurgents To Kill Americans - A little over a month ago we were told that Russian military intelligence was paying the Afghan Taliban to kill American troops. As many predicted, that "bombshell" - later admitted by some of the same sources that initially promoted it to be of "sketchy" intelligence origin - was very short-lived, grabbing headlines for a few days, only to be rapidly memory-holed akin to the fate of other Russiagate-related 'anonymous sources say' type stories. In the foreign-policy-think of the D.C. blob, the cast of "rogue" actors constantly threatening US national security seamlessly rotates, entering in and out of familiar narratives when convenient, and now CNN is out with the latest: "US intelligence agencies assessed that Iran offered bounties to Taliban fighters for targeting American and coalition troops in Afghanistan, identifying payments linked to at least six attacks carried out by the militant group just last year alone, including a suicide bombing at a US air base in December, CNN has learned." Administration officials say it was US intelligence's uncovering of the Iranian bounties plot which was decisive in convincing President Trump to assassinate IRGC Quds Force chief Qassem Soleimani on January 3rd. The killing by drone of Soleimani came less than a month after a particularly devastating attack on Bagram Air Base which resulted in two civilian deaths, and injuries to four American personnel, among more than 60 others wounded. That attack was on December 11, 2019. CNN writes: "The name of the foreign government that made these payments remains classified but two sources familiar with the intelligence confirmed to CNN that it refers to Iran." So there it is — the largely debunked 'Russian bounties' story lives on apparently, in new form, fed to the public by anonymous intelligence sources. The CNN story even links the two threads together, suggesting that two major American enemies, Russia and the Islamic Republic, are now essentially handing out vast amounts of cash to mujahideen to kill Americans in Central Asia.
Turkey makes significant Black Sea gas find: sources - (Reuters) - Turkey has found significant gas resources in the Black Sea, two Turkish sources said, a discovery which could help the country cut its dependence on energy imports if the gas can be commercially extracted. President Tayyip Erdogan told energy executives on Wednesday he will announce “good news” on Friday that will herald a “new period” for Turkey - comments which drove up shares in Turkish energy firms and lifted the lira from this week’s record low. He gave no details but the sources said he was referring to a gas discovery in the Black Sea, and one source said the scale of the reserves could potentially meet Turkey’s energy needs for 20 years. Turkey’s drilling ship Fatih has been operating since late July in an exploration zone known as Tuna-1, about 100 nautical miles north of the Turkish coast in the western Black Sea. “There is a natural gas finding in the Tuna 1 well,” the source said. “The expected reserve is 26 trillion cubic feet or 800 billion cubic metres, and it meets approximately 20 years of Turkey’s needs.” However he cautioned that it could take seven to 10 years to start production, and estimated investment costs at between $2 billion and $3 billion. Officials, including Energy Minister Fatih Donmez, have given no details of Friday’s announcement, saying Erdogan will spell out the “surprise” himself.
Erdogan Announces "Biggest Gas Discovery In Turkey's History" As Lira Resumes Plunge - Turkey's lira was up as much as 1% just ahead of President Tayyip Erdogan's major announcement Friday - crucially before tumbling again - in which he declared a "significant gas find" in the Black Sea. He unveiled “the biggest gas discovery in Turkey’s history” during a speech in Istanbul. Per Bloomberg, the “Turkish lira erased gains against U.S. Dollar as Erdogan continues his speech. Borsa Istanbul 100 index reversed more than 1.3% gains to 0.7% loss” — perhaps given many likely see this as but a desperate attempt for him to provide some deus ex machina as Turkey's economy is imploding and locals are fleeing the lira to buy gold. BREAKING — Turkey has discovered a gas reserve as big as 320 billion cubic meters in Black Sea, Erdogan says. He says this is the largest ever gas discovery in history pic.twitter.com/CYGoa0PdPf Despite the lira hitting a record low 7.4 against the U.S. dollar this week, the potential major energy find could reduce Turkey's dependence on energy imports, which Turkey's leaders hope will breath a sign of life back into the spiraling economy. Erdogan said the discovery is sure to mark the start of a "new era" for the country, detailing that Turkey will aim to achieve the first gas production from the find by 2023. But again, it appears that based on immediate reaction to his speech at least, markets aren't quite buying it just yet.
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