Sunday, May 9, 2021

record jump in oil exports leads to largest inventory draw since January​, with ​12 million barrels still unaccounted for

record jump in oil exports to a 54 week high leads to largest crude inventory draw since January​, with ​12 million barrels still unaccounted for; refinery utilization rate is highest in 58 weeks; ​gas rigs see largest increase in 37 months

oil prices rose this week as traders antipitated higher demand for fuel as global economies eased Covid-related restrictions... after rising 2.3% to $63.58 a barrel last week on strong economic reports and on rising product demand, the contract price of US light sweet crude for June delivery traded lower Monday morning in Asia as surging COVID-19 cases in India dampened fuel demand hopes, but opened higher and rose in New York trading, supported by a weaker U.S. dollar, as hopes for a demand recovery outweighed worries about surging infections in India, with oil settling 91 cents higher at $64.49 a barrel....oil prices moved higher a second day on Tuesday as traders bet that easing COVID-19 restrictions in the U.S. and Europe would lead to higher fuel demand, and closed $1.20, or nearly 2% higher at $65.69 a barrel, after more U.S. states eased lockdowns and the EU sought to encourage travellers...oil prices extended those gains in after hours trading after the American Petroleum Institute reported the largest draw from US crude supplies since January, and opened 76 cents higher on Wednesday, but then faded late to close 6 cents lower at $65.63 a barrel, as traders reconsidered the outlook for oil demand in light of rising gasoline supplies...oil prices moved lower again on Thursday after Saudi Arabia cut the selling price of its crude to Asia, and ended trading down 92 cents at $64.71 a barrel amid uneven recovery signs among countries still battling the coronavirus...oil prices edged higher in Asia trading early Friday as global economic recovery and easing travel curbs in the US and Europe buoyed the fuel demand outlook, even as the surging pandemic in India capped prices, and June oil went on to close 19 cents higher to $64.90 a barrel in New York, and thus posted a 2.1% gain on the week...

natural gas prices also edged higher this week on near record exports and on forecasts for a cooling trend...after rising 4.0% to $2.931 per mmBTU last week on record exports and on declining gas field output, the contract price of natural gas for June delivery opened higher on Monday and climbed 3.5 cents to a 10 week high of $2.966 per mmBTU, despite forecasts for milder weather, on forecasts for near record exports...prices held steady at a 10-week high on Tuesday on forecasts for cooler weather, settling a tenth of a cent higher at $2.967 per mmBTU. but then slid 2.9 cents to $2.938 per mmBTU on Wednesday ahead of expectations for a more substantial build in underground inventories with this week’s EIA storage report...however, prices​ ​slipped​ ​again on Thursday, despite a bullish inventory print and continued robust demand for both LNG and pipeline exports, and settled a penny lower at $2.928 per mmBTU...natural gas​ ​prices rebounded Friday, rising 3.0 cents to $2.958 per mmBTU, on forecasts for cooler weather and higher heating next week and hence finished week 0.9% higher, even as they failed to penetrate the $3 level or match the highs set earlier in the week...

the natural gas storage report from the EIA for the week ending April 30th indicated that the amount of natural gas held in underground storage in the US rose by 60 billion cubic feet to 1,958 billion cubic feet by the end of the week, which left our gas supplies 345 billion cubic feet, or 15.0% below the 2,303 billion cubic feet that were in storage on April 30th of last year, and 61 billion cubic feet, or 3​.0% below the five-year average of 2,019 billion cubic feet of natural gas that have been in storage as of the 30th of April in recent years....the 60 billion cubic feet that were added to US natural gas storage this week was more than the average forecast of a 51 billion cubic foot addition from an S&P Global Platts survey of analysts, but was well below the average addition of 81 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, as well as well below the 103 billion cubic feet added to natural gas storage during the corresponding week of 2020...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending April 30th showed that because of a drop in our oil imports and a big increase in our oil exports, we needed to withdraw oil from our stored commercial crude supplies for the fourth time in eleven weeks and for the 26th time in the past forty-one weeks....our imports of crude oil fell by an average of 1,164,000 barrels per day to an average of 5,451,000 barrels per day, after risng by an average of 1,211,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 1,581,000 barrels per day to an average of 4,122,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 1,329,000 barrels of per day during the week ending April 30th, 2,745,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 10,900,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 12,229,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,243,000 barrels of crude per day during the week ending April 30th, 225,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 1,291,000 barrels of oil per day were being pulled out of the supplies of oil stored in the 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 1,722,000 barrels per day less than what our oil refineries reported they used during the account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+1,722,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting there must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed....furthermore, since last week's EIA fudge factor was at (-150,000) barrels per day, there was a 1,872,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which renders the week over week supply and demand changes we have just transcribed meaningless....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,831,000 barrels per day last week, which is​ still​ 7.8% more than the 5,408,000 barrel per day average that we were importing over the same four-week Covid impacted period last year... the 1,291,000 barrel per day net withdrawal from our crude inventories included a 150,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, and a 1,141,000 barrel per day withdrawal from our commercially available stocks of crude oil....this week's crude oil production was reported to be unchanged at 10,900,000 barrels per day even though the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 10,400,000 barrels per day because a 15,000 barrel per day increase in Alaska's oil production to 457,000 barrels per day added 100,000 barrels per day to the rounded national total....our prepandemic record high US crude oil production was at a rounded 13,100,000 barrels per day​ ​during the week ending March 13th 2020, so this reporting week's reported oil production figure was 16.8% below that of our production peak, yet still 29.3% above 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 86.5% of their capacity while using those 15,243,000 barrels of crude per day during the week ending April 30th, up from 85.4% the prior week, and the highest refinery utilization rate in 58 weeks, reflecting the refinery utilization level during the last week before the pandemic related refinery slowdown...while the 15,243,000 barrels per day of oil that were refined this week were 17.4% higher than the 12,976,000 barrels of crude that were being processed daily during the week ending May 1st of last year, they were still 7.1% below the 16,405,000 barrels of crude that were being processed daily during the week ending May 3rd, 2019, when US refineries were operating at a still low 88.9% of capacity...

even with this week's increase in the amount of oil being refined, the gasoline output from our refineries decreased by 483,000 barrels per day to 9,146,000 barrels per day during the week ending April 30th, after our gasoline output had increased by 243,000 barrels per day over the prior week...while this week's gasoline production was 36.4% higher than the 6,705,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 8.3% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 9.7% below the gasoline production of 10,129,000 barrels per day during the week ending May 3rd, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 128,000 barrels per day to 4,498,000 barrels per day, after our distillates output had increased by 71,000 barrels per day over the prior week... and since the onset of the pandemic last year didn't appear to impact distillates' production, this week's distillates output was still 11.5% lower than the 5,082,000 barrels of distillates that were being produced daily during the week ending May 1st, 2020...

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the nineteenth time in twenty-five weeks, and for 23rd time in 43 weeks, rising by 737,000 barrels to 235,811,000 barrels during the week ending April 30th, after our gasoline inventories had increased by 92,000 barrels over the prior week...our gasoline supplies managed to increase again this week because the amount of gasoline supplied to US users decreased by 13,000 barrels per day to 8,864,000 barrels per day and because our exports of gasoline fell by 49,000 barrels per day to 555,000 barrels per day while our imports of gasoline fell by 1,000 barrels per day to 1,020,000 barrels per day....but even after five straight inventory increases, our gasoline supplies still were 8.0% lower than last May 1st's gasoline inventories of 256,407,000 barrels, and about  2% below the five year average of our gasoline supplies for this time of the year... 

with the decrease in our distillates production, our supplies of distillate fuels also decreased for the 10th time in 20 weeks and for the 24rd time in thirty-six weeks, falling by 2,896,000 barrels to 136,153,000 barrels during the week ending April 30th, after our distillates supplies had decreased by 3,342,000 barrels during the prior week....our distillates supplies fell by a bit less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 205,000 barrels per day to 4,125,000 barrels per day, while our imports of distillates rose by 34,000 barrels per day to 68,000 barrels per day, and while our exports of distillates rose by 48,000 barrels per day to 956,000 barrels per day....after four consecutive inventory decreases, our distillate supplies at the end of the week were 10.1% below the 151,490,000 barrels of distillates that we had in storage on May 1st, 2020, and about 2% below the five year average of distillates stocks for this time of the year...

finally, with the drop in our oil imports and the big jump in our oil exports, our commercial supplies of crude oil in storage fell for the 14th time in the past twenty-five weeks and for the 27th time in the past year, decreasing by 7,990,000 barrels, from 493,107,000 barrels on April 23rd to 485,117,000 barrels on April 30th....after this week's decrease, our commercial crude oil inventories fell to about 2% below the most recent five-year average of crude oil supplies for this time of year, but were still about 37.3% above the average of our crude oil stocks as of the end of April over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring, our commercial crude oil supplies as of April 30th ​were 9.1% less than the 532,221,000 barrels of oil we had in commercial storage on May 1st of 2020, but still 4.0% more than the 466,604,000 barrels of oil that we had in storage on May 3rd of 2019, and also 11.8% more than the 433,758,000 barrels of oil we had in commercial storage on May 4th of 2018...     

This Week's Rig Count

The US rig count rose for the 30th time over the past 34 weeks during the week ending May 7th, but is still down by 43.5% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 8 to 448 rigs this past week, which was also up by 74 rigs from the pandemic hit 374 rigs that were in use as of the May 8th report of 2020, but was still 1,481 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 was up by 2 to 344 oil rigs this week, after falling by 1 the prior week, thus giving us 52 more oil rigs than were running a year ago, but still just 21.4% of the recent high of 1609 rigs that were drilling for oil on October 10th, the same time, the number of drilling rigs targeting natural gas bearing formations was up by 7 to 103 natural gas rigs, the biggest gas rig jump since March 2018, which was also up by 23 natural gas rigs from the 80 natural gas rigs that were drilling a year ago, but still just 6.6% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008....however, the so-called "miscellaneous" rig that had been drilling in Lake County, California was pulled out this week, leaving just a horizontal rig in the Permian basin in Midland county Texas that was classified as 'miscellaneous' this week, compared to the "miscellaneous" rig count of two a year ago..

The Gulf of Mexico rig count was unchanged at 13 rigs this week, with 12 of those rigs now drilling for oil in Louisiana's offshore waters and 1 rig continuing to drill for oil in Alaminos Canyon offshore from Texas...that was 2 fewer Gulf of Mexico rigs than the 1​5 rigs drilling in the Gulf a year ago, when all 15 Gulf rigs were drilling for oil offshore from Louisiana...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig totals are equal to the Gulf rig counts...meanwhile, in addition to those rigs offshore, a rig continues to drill through an inland lake in St Mary parish Louisiana, matching the "inland waters" rig count of one a year ago...

The count of active horizontal drilling rigs was up by 10 to 408 horizontal rigs this week, which was also up by 70 rigs from the 338 horizontal rigs that were in use in the US on May 8th of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....meanwhile, the directional rig count was unchanged at 23 directional rigs this week, which was​ still​ down by four from the 27 directional rigs that were operating during the same week a year the same time, the vertical rig count was down by 2 to 17 vertical rigs this week, but those were up by 8 from the 9 vertical rigs that were in use on May 8th of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas both tables, the first column shows the active rig count as of May 7th, the second column shows the change in the number of working rigs between last week's count (April 30th) and this week's (May 7th) count, the third column shows last week's April 30th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 8th of May, 2020..    

May 7th 2021 rig count summary

​from the tables above, it's not entirely obvious where that 7 rig increase in natural gas rigs was this week....checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that that three​ oil​ rigs were added in Texas Oil District 8, which is the core Permian Delaware, that two​ oil​ rigs added in Texas Oil District 7C, which encompasses the southern counties of the Permian Midland, and that another​ oil​ rig was added in Texas Oil District 8A, which includes the northern counties of the Permian Midland, while the last​ oil​ rig remaining in Texas Oil District 7B, which includes furthest east counties of the Permian Midland, was pulled out, thus accounting for the national Permian basin​ 5 rig​ increase...elsewhere in Texas, we had a natural gas rig added in Texas Oil District 1, and two oil rigs pulled out of Texas Oil District 2, all of which had to be Eagle Ford rigs, to account for both the increase of one gas rig and the loss of two oil rigs in the Eagle Ford, which now has 31 oil rigs and two gas rigs​ deployed​ addition, a natural gas rig was added in Texas Oil District 6, accounting for one of the Haynesville shale rigs seen above, whiile the other three Haynesville rigs​ ​were added in northern Louisiana...thus to get to our 7 natural gas rigs, we have the 4 that were added in the Haynesville shale, the gas rig that was added in the Eagle Ford, the​ gas​ rig that was added in Pennsylvania's Marcellus, and a natural gas rig that was added in a basin that Baker Hughes doesn't track, which could have been in Utah, since that's the only obvious rig addition we haven't accounted for yet... 


Overview of Recent Nationwide Permit Program Changes --National Law Review (excerpts):

  • Ohio EPA Waived Water Quality Certifications: Under Section 401 of the CWA, a federal agency may not issue a permit, such as a NWP, to conduct any activity that may result in any discharge into waters of the United States unless a Section 401 water quality certification (“WQC”) is issued by a certifying authority such as the Ohio EPA. The certifying authority must timely verify compliance with water quality requirements, or its certification right is waived. A WQC can be waived expressly or by failure to act on a certification request within a reasonable period of time provided by the Corps. The Corps, in a Public Notice issued on March 8, 2021, took the position that the State of Ohio Section 401 WQC has been waived for the newly issued NWPs. Ohio EPA received a request for certification under Section 401 of the CWA for the proposed issuance the NWPs in October of 2020 with 60 days to respond. Ohio EPA did not respond until March 4, 2021. In its WQC, Ohio EPA provided that “any lowering of water quality in various waters of the state as authorized by these certifications is necessary;” meaning that impacts to waters of the state of Ohio may occur pursuant to activities authorized by the NWPs subject to specified conditions. However, at this point in time, the specified conditions do not apply to NWPs issued for activities in Ohio. Activities that meet the conditions of the current NWPs do not require an individual Ohio  Section 401 WQC. Therefore, anyone applying for coverage under the newly issued NWPs need only apply for, obtain coverage under, and comply with the federal NWP requirements.   Ohio EPA’s currently waived WQC for the newly issued permits can be found here.
  • Ohio EPA Issues General Permit to Protect Ephemeral Streams and Isolated Wetlands No Longer Protected by the Clean Water Act: On April 21, 2020, the United States Environmental Protection Agency and the United States Army Corps of Engineers (“Corps”) published the Navigable Waters Protection Rule (“NWPR”) in the Federal Register. The NWPR finalized a revised definition of “waters of the United States” under the Clean Water Act (“CWA”) and replaced the 2015 Clean Water Rule which previously defined the term. The definition of “waters of the United States” in the CWA controls permitting and regulatory requirements for waterbodies that fall within that definition. While individual states normally have the authority to stop a federal agency from issuing a permit for a project that does not comply with that state’s additional requirements in their Water Quality Certification (“WQC”), the NWPR potentially left unprotected the estimated 36,000 miles of ephemeral streams in Ohio. In response, the Ohio Environmental Protection Agency (“Ohio EPA”) issued the Ohio General Permit for Filling Category 1 and 2 Isolated Wetlands and Ephemeral Streams (“General Permit”) on June 25, 2020. Ohio EPA cited Ohio Revised Code (“ORC”) § 6111 as its source of authority to regulate the filing of and discharges into these waterbodies in Ohio that are now explicitly excluded from the CWA. A 2017 letter concerning the proposed changes to the NWPR provides a basis for Ohio EPA’s current actions. Ohio EPA stated:  Due to the broad definition and prohibitions in ORC 6111, ephemeral and intermittent streams would be protected, but there would be no permitting mechanism to allow the placement of dredge and fill material similar to the 404/401 permitting mechanism. The 401 program in Ohio is dependent on the 404 process, so if certain streams were considered not a water of the US (non-jurisdictional), then a 401 WQC could not be issued for placement of dredge and fill material.

Rep. Baldridge fights for pipeline, jobs in Michigan visit --An Ohio lawmaker went on the road to try to convince Michigan officials to abandon plans to force the shutdown of a fuel pipeline that could cost jobs in the Buckeye State. Rep. Brian Baldridge, R-Winchester, testified last week before the Michigan Senate's Energy Committee and met with the state’s Senate leadership in response to the recently adopted Ohio Resolution 13, which urged Michigan to keep the Enbridge Line 5 pipeline operating. “I drove to Michigan for one reason: to protect Ohio jobs,” Baldridge said. “We cannot allow a political decision to get in the way of hardworking Ohioans providing for their families. House Resolution 13 would keep Line 5 safely operating and protect Ohio jobs and protect the Great Lakes Region's shared economy.” A shutdown affects jobs and fuel availability in the region, according to Enbridge, leaving Ohio, Pennsylvania and Michigan and Canadian provinces Ontario and Quebec with a 14.7-million-U.S.-gallons-a-day supply shortage of gas, diesel and jet fuel. That represents about 45% of the current supply. A shutdown could cause the loss of $5.4 billion in economic output to Ohio and southeast Michigan, the company said. Michigan Gov. Gretchen Whitmer, Michigan Attorney General Dana Nessel and Michigan Department of Natural Resources Director Dan Eichinger filed a lawsuit Nov. 13 in Ingham County Court demanding Enbridge cease Line 5 operations by May 2021. The easement has been in place since 1953. The Line 5 pipeline services two Oregon refineries in northwest Ohio. According to Ohio officials, closing the line would cause a significant disruption in the supply chain, which serves as a source of jet fuel for several regional and international airports, particularly in Cleveland and Detroit. Whitmer and Eichinger said the administration’s actions are based on what they are characterizing as Enbridge’s violation of the public trust doctrine, which protects the state’s natural resources.Among the violations cited by the governor are “the unreasonable risk that continued operation of the dual pipelines poses to the Great Lakes,” according to a November news release. Whitmer cited events in April 2018 and another in 2019 in which Line 5 was damaged.

Cabot, Southwestern Remain Disciplined in 1Q, Despite Jump in Prices --Appalachian heavyweights Cabot Oil & Gas Corp. and Southwestern Energy Co. stayed in maintenance mode during the first quarter of 2021, keeping production flat and delivering free cash flow (FCF) in line with plans for the period. Both companies reported an increase in average realized prices during the quarter, but that didn’t prompt them to change course as Appalachian operators have scaled back in recent years amid volatile commodity prices and calls for better returns from investors. Cabot produced 2.29 Bcfe/d during the quarter, all of it natural gas produced solely in Susquehanna County, PA. That was down slightly from 2.36 Bcfe/d in 1Q2020. But the company had guided for a drop during the period given a decrease in operating activity and capital spending during the second half of 2020. Cabot’s full-year guidance remains unchanged at 2.23-2.28 Bcfe/d, but CEO Dan Dinges said production wouldn’t begin ramping up until later this year. “Our production guidance for the second quarter implies a slight sequential decline relative to the first quarter, which is a result of lower activity levels and capital spending during the winter season,” Dinges said. “Activity levels are expected to increase in the second and third quarters, resulting in sequential growth during the second half of the year, primarily during the fourth quarter in anticipation of higher natural gas prices and the in-service of the Leidy South expansion project.”  Transcontinental Gas Pipe Line LLC’s Leidy South would carry about 600 MMcf/d from Pennsylvania to Atlantic Seaboard markets. Partial capacity on the system was brought online late last year. . The company reported net income of $126.4 million (32 cents/share), compared to a profit of $53.9 million (14 cents) in 1Q2020.  Southwestern has similar plans for 2021, announcing guidance late last year to keep 4Q2021 production flat with 4Q2020 levels, including the assets ittook in the acquisition of Appalachian pure-play Montage Resources Corp. that was completed last November.  The company had a stronger start to the year, though, reporting 269 Bcfe of production, which consisted of 79% natural gas, 17% natural gas liquids and 4% oil. That’s up from 201 Bcfe in the year-ago period. The company’s Southwest Appalachia division accounted for 151 Bcfe of 1Q2021 volumes, while its Northeast Appalachia division, where volumes are drier, produced 118 Bcf.  Southwestern in the first quarter drilled its first Utica Shale well in Ohio after entering the state with the Montage acquisition. COO Clay Carrell said the well is currently being completed and is expected to come online this quarter. The company has 12-15 Utica wells planned for this year, Carrell said, adding that “we get the incremental benefit from that program of now consistently drilling Utica wells and all the learning that’s going to come from that.”

Gas industry slowdown hurting western Pa. economy, taxpayers — For the past decade, the natural gas industry has boomed in Western Pennsylvania. But the industry is facing tough times now, and that is having a major impact in communities where the industry has a large presence. Advertisement Waynesburg was the center of the natural gas boom but you wouldn't know it these days. A downtown building hosting a Welcome to Greene County sign is for sale. Other buildings are seeking renters as stores shut down. Area leaders said it's not just the pandemic causing the slowdown. "It used to be if you sat on the sidewalk in Waynesburg you'd see water trucks and sand hauling trucks just lined up going through there and that is no longer the case," said County Commission Chairman Mike Belding. In late 2014, records show the natural gas industry employed 33,181 people in Pennsylvania. But by late 2020, that number had dropped by 30 percent to 23,360. From 2017 to 2020, the number of new wells statewide dropped by nearly half from 810 to 476. That's had an impact on other businesses that relied on the gas industry. At Lavern's Restaurant outside Waynesburg, Action News Investigates caught up with former Greene County Sheriff Richard Ketchem. After leaving office he oversaw security for a trucking company that serviced the gas industry. "For a while when I was running the agency they wanted guys all the time to check the wells, go around well sites. There's none of that anymore," said Ketchem, who lost his job before the pandemic. "We had five companies there, almost 1,100 people, and they all got laid off," he said. The downturn has also hurt people who own gas leases, like Bill Schamp of Greene County. His lease paid up to $5,000 per year but no more. Five years later we're supposed to renew it and it's 17-18 acres of property and they just never called me back, let the lease expire," Schamp said. "A few people I know were getting $40,000 to $50,000 a month, and they built new houses, bought new cars and trucks, then it dried up and now they're going into foreclosure." The county also spent freely during the boom, according to Belding who took over last year. He said his predecessors used millions of dollars in gas impact fees to plug budget holes. "We inherited a 2020 budget that was passed in 2019 with a $5 million budget deficit out of a $40 million budget. Because of that, we ended up raising taxes,"  . Marcellus Shale Coalition president David Callahan said the pandemic is part of the reason, but a much bigger factor is the sharp drop in the price of natural gas. "All commodity industries are cyclical. We're very very reactive to prices. Low price means more supply on the market and the industry responds to those market signals,"

Why EQT's making a $3B deal to purchase a top-10 Pa. driller --EQT Corp. is already the country’s largest independent natural gas producer, with its footprint mostly in the tri-state area south of Pittsburgh in what is one of the Marcellus Shale’s two most prolific gas fields. With the pending $2.9 billion acquisition of Alta Resources Development LLC that was announced Thursday, EQT will be getting something new: a hefty chunk of wells and acreage in the Marcellus’ other center of development, northeastern Pennsylvania. The two companies together will not only be the largest producer of Marcellus and Utica shale gas but that much bigger in the overall national picture. EQT (NYSE: EQT) is already producing 4.9 billion cubic feet per day of natural gas, well above its next-nearest competitor, Exxon Mobil and its new Marcellus Shale neighbor, Cabot Oil & Gas Corp. Adding in Alta’s 1 billion cubic feet per day will give EQT almost 6 billion cubic feet a day. Or, put another way, it’ll bring together the No. 1 and No. 8 drillers in Pennsylvania, according to the 2021 Pittsburgh Business Times Book of Lists. EQT has 1,985 wells across mostly southwestern Pennsylvania while Alta Resources has 499 wells in Centre, Clinton, Lycoming and Sullivan counties. And EQT CEO Toby Z. Rice told analysts on Thursday's first-quarter analyst call that the company is already thinking of all the opportunities that an EQT-Alta combination provide. "We have the ability to shape the portfolio, to continue to optimize it and still benefit from the commercial opportunities that present themselves that I do believe are starting to become apparent and unique to EQT, what you get from managing such a large production base," Rice said. That 6 billion cubic feet of natural gas won't just be going to EQT's traditional markets but also to other markets in the Northeast where the Pittsburgh-based driller didn't normally have a pipeline to sell gas into.   The assets are a combination of operated by Alta and a portion that’s operated in a deal with Chesapeake Energy Corp. (NYSE: CHK). EQT plans to have one rig drilling enough to keep production steady on its operated side; it’s still to be seen what it will be drilling in conjunction with Chesapeake. The operated and nonoperated assets are about 50% each of the acquisition. Alta's assets were built from another top-tier driller, Anadarko. Rice said EQT plans to add the Alta assets to its combo development strategy, a highly choreographed and efficient plan to drill and complete wells that Rice Energy used during its time as a company and EQT under Rice has also used. EQT will keep Alta’s key personnel and its own chiefs of drilling and production have experience in northeastern Pennsylvania.

The Supreme Court Case That Could Change Everything For U.S. Pipelines - A Supreme Court hearing began this week that could seal the future fate of gas pipelines across the United States. It could also change the balance of power between federal and state authorities in a way that federal authorities would hardly like. The case involves the proposed PennEast pipeline, a 120-mile, 1-billion-cu-m piece of infrastructure that will take natural gas from the Marcellus shale across Pennsylvania and New Jersey. New Jersey is opposing the pipeline. PennEast and FERC want to use eminent domain to condemn the state and private land they need to build the infrastructure.On the face of it, it is a simple case—just another pipeline dispute of the sort that has been enjoying growing popularity among environmentalist groups and politicians in the past few years. In this case, the politicians want to stop PennEast from receiving easements for 40 parcels of federal land. The only way for PennEast to receive these easements, then, is to sue New Jersey. What makes this case different is that its outcome could have major implications for the industry.As Forbes’ Christopher Hellman explained in an article from earlier this week, the argument of the New Jersey political pipeline opponents is that under the 11thAmendment to the Constitution, states have sovereign immunity against lawsuits brought against them by private parties such as companies. In other words, PennEast simply has no right, under the Constitution of the United States, to sue New Jersey’s politicians on the pipeline issue.A counter-argument, used by a district court in 2018 to rule in favor of the natural gas project, is that PennEast is not acting on its own with its plans to carry 1 billion cubic meters of natural gas across two states. It is acting, the court ruled, under the auspices of a government authority: the Federal Energy Regulatory Commission.Forbes’ Hellman notes this was not a first, either: since the passing of the Natural Gas Act in 1938, FERC has on more than one occasion delegated its powers to invoke eminent domain to energy companies. From PennEast’s perspective, then, since federal power supersedes state power and since FERC has approved the New Jersey pipeline, it has every right to sue the state for that land.New Jersey appealed the district court ruling, and the appeals court found in its favor. It said that the state had sovereign immunity against lawsuits brought against it by private entities such as PennEast, noting that the power to invoke eminent domain as delegated to it by FERC was a completely different matter from its right to sue a state.“Thus, the federal government’s ability to condemn State land … is, in fact, the function of two separate powers: the government’s eminent domain power and its exemption from Eleventh Amendment immunity,” the U.S. Court of Appeals for the 3rd Circuit said in its decision. “A delegation of the former must not be confused for, or conflated with, a delegation of the latter.”

Williams Q1 Earnings Beat Estimates, Increase Y/Y --The Williams Companies, Inc. WMB reported first-quarter 2021 adjusted earnings per share (EPS) of 35 cents, beating the Zacks Consensus Estimate of 28 cents as well as the year-ago quarter’s earnings of 26 cents.This outperformance can be attributed to higher-than-expected contributions from its two segments. Precisely, adjusted EBITDA from the West and the Northeast G&P units totaled $315 million and $402 million each, ahead of their respective Zacks Consensus Estimate of $247 million and $397 million.Also, for the quarter ended Mar 31, the company’s revenues of $2.61 billion beat the Zacks Consensus Estimate by 22.71% and also increased from the year-ago figure of $1.9 billion.Adjusted EBITDA was $1.4 billion in the quarter under review, reflecting an increase of 12.1% from the corresponding period of 2020. Cash flow from operations totaled $915 million compared with $787 million in the prior-year period. Favorable net working capital changes drove cash flow in the quarter. Segmental Analysis

  • Transmission & Gulf of Mexico: Comprising Williams’ massive Transco pipeline system and the Northwest Pipeline, the segment generated adjusted EBITDA of $660 million, lower than the year-ago quarter’s $669 million. Despite marginal gains in service revenues, commodity margins and investee EBITDA, the unit’s performance was offset by higher operating and administrative expenses.
  • West: This segment includes gathering and processing assets in the Western region of the United States. It delivered adjusted EBITDA of $315 million, which is 45.8% higher than $216 million recorded in the year-earlier quarter. The improved results were driven by higher product marketing margins resulting from elevated prices and the absence of prior-year inventory effects plus lower operating and administrative expenses.
  • Northeast G&P: Engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions, the segment generated an adjusted EBITDA of $402 million, up 8.7% from the prior-year quarter’s $370 million. Increased gathering volumes on its Bradford and Marcellus South systems and higher equity-method investments contributions drove the results.

Invenergy proposed natural gas-fired plant questioned in Pennsylvania - Residents and concerned citizens questioned the chief engineer of the Allegheny County Health Department's permitting section about potential emissions for a proposed natural gas-fired power plant that a Chicago company wants to build along the Youghiogheny River in Elizabeth Township. Invenergy first proposed in 2016 building the 639-megawatt Allegheny Energy Center power plant in Elizabeth Township. But the township turned down the proposal, as was a proposed rezoning from rural residential to light industrial to allow the plant at a different location along the river and near the Great Allegheny Passage Bike Trail in 2017. But another rezoning proposal made in 2018, to allow a power plant on the 147-acre site, was approved. Work hasn’t begun on the process nor has Invenergy applied for a land-use permit to begin construction. Invenergy has, however, applied to the ACHD for an air-quality permit. The meeting brought out residents from Elizabeth Township as well as the Westmoreland County towns across the river from the plant site. It was sponsored by the Mountain Watershed Association, whose Executive Director Ashley Funk said there are concerns about how close it is to the Youghiogheny River and the bike trail as well as the environmental impact on the communities of West Newton and Sutersville. Both meet the standard of at least 20% low-income residents. “We also want to take into account that this region has a significant amount of source polluters,” Funk said. It’s seven miles from U.S. Steel Clairton, the county’s largest emitter, and about six miles from another natural gas-fired power plant in Smithton. The March 21 draft permit recommends approval of the air quality permit. JoAnn Truchan, ACHD’s section chief of engineering, said the plant has to meet federal guidelines for air emissions and also that it must have the best control technology for emissions without regard to cost to the company. “This permit meets that (federal environmental standards),” Truchan said. According to a draft air-quality report from ACHD, the plant will emit nitrogen oxide, carbon monoxide and volatile organic compounds. It will have emissions limits as set out by the installation permit, and will be required to perform monitoring and testing for those emissions as well as particulate matter. Some residents noted the other air emissions in the region and wondered if it were better to focus on cutting down other pollution sources before approving a new plant.

Residents protest approval of power plant in Keasbey - A group of concerned citizens attended the Woodbridge Township Council meeting on May 4 to voice concern about, and protest, the board’s approval of a new 630-megawatt gas-fired power plant in the Keasbey section of town. The plant would be the second of its kind in the township. The CPV Woodbridge Energy Center (CPV Woodbridge) is a 725-megawatt combined-cycle gas power generation facility that began operations in January 2016. The power plant is located on Riverside Drive on the site of an abandoned chemical plant that became the Brownfields Development Area (BDA) in 2009. The New Jersey Department of Environmental Protection’s (DEP) Brownfield Remediation and Reuse Element established a BDA initiative in order to work with selected communities affected by multiple brownfield sites to design and implement remediation and reuse plans for the abandoned and unused properties. Benefits included access to various grants from the DEP of up to $5,000,000 per year. With that incentive in mind, and so much abandoned space in the community, township officials identified multiple sites in Keasbey to be considered for such projects of redevelopment, officials said. According to the activist group EmpowerNJ, the developer’s application indicates that “the plant would pour millions of tons of greenhouse gases and significant quantities of toxic poisonous chemicals every year that will negatively affect the health of residents in Central Jersey and Staten Island.”Although the plans for the new facility have already been approved by Woodbridge Township, final approvals are yet to be received from the DEP.

New York advisory panel recommendations to include gas-fired plant moratorium - New York's Power Generation Advisory Panel will recommend a moratorium against new fossil fuel-fired plant construction to the state's Climate Action Council, the panel's chair said May 3. The concept of a moratorium has been included as a recommendation, though consensus on it was not reached among all panel members, said Sarah Osgood, panel chair and director of policy implementation at the ‎New York State Department of Public Service, during a remotely held meeting of the panel. "We had presented at our last meeting that there was a concept of a moratorium on new and repowered gas facilities and that has been incorporated as a component of a recommendation," Osgood said. Based on public comments, there was generally broad support for the advisory panel's agenda with "lots of support for energy efficiency and renewables as well as energy storage" and a lot of calls for equity and urgency of action, Osgood said. There was some concern with the pace of renewable energy project build-out and requests for earlier engagement with local communities when planning renewable energy projects, according to a presentation given during the meeting. The panel is preparing to present its recommendations to the state's Climate Action Council on May 10. The CAC is charged with developing the rules and regulations that will guide the implementation of the Climate Leadership and Community Protection Act which mandates an emissions-free power system by 2040, among numerous other goals. Other key topics regarding the panel's recommendations identified by commenters were around the role of nuclear power and natural gas infrastructure in New York' energy transition. Most commenters were evenly split between pro- and anti-nuclear power. Those in favor of the power source pointed to the benefits of its emissions-free baseload generation, contribution to power grid reliability and it being a preferred alternative to building out gas-fired power plants that would increase carbon dioxide emissions, according to the presentation. Those against nuclear power highlighted health and safety concerns associated with radiation and spent fuel rod storage while expressing a preference for supporting renewable energy instead.Most commenters called for preventing continued gas infrastructure build out, specifically regarding new power plant construction. Many also said there should be a plan to phase out existing gas-fired power plants with a priority on closing peaking facilities around New York City, the presentation said. Feedback also focused on the inconsistency of expanding gas infrastructure with the state's greenhouse gas emissions reduction goals, as well as the negative impacts fossil fuel infrastructure can have on communities. Many said they would prefer investments are made in renewable energy, energy storage and power transmission that can replace the need for gas-fired generation.

Over 60% of natural gas pipeline extension completed in Salisbury — The pipeline grows. The Salisbury City Council heard the latest update Monday evening on a controversial natural gas pipeline set to extend service to Somerset County. The Del-Mar Energy Pathway pipeline will extend natural gas service to Eastern Correctional Institution and the University of Maryland Eastern Shore, as both anchors look to transition off more polluting fuels.Chesapeake Utilities Corp. got the unanimous green light from the Maryland Board of Public Works in January for the $34 million project, which will add nearly seven miles of 10-inch-diameter gas pipeline from Delaware, through Wicomico County and into Somerset County. "Residents and businesses along the line will soon have the choice to use environmentally beneficial and less expensive natural gas service," wrote Justin Mulcahy, spokesman for Chesapeake Utilities Corp., in a statement that month, "something elected officials and community members have advocated for more than two decades."That line includes a section running through Salisbury, along Route 13.   "They're at approximately 64% complete with the pipeline installation to-date," Ongoing construction activities remain at various locations, and horizontal drilling for installation under the South Prong of the Wicomico River was completed in February.

Emissions concerns, job hopes share center stage during meeting on proposed Pleasants County methanol facility  - Environmentalists objected to and county and union officials welcomed an application to build a $350 million natural gas-to-methanol facility in Pleasants County during a public meeting that West Virginia environmental regulators held Tuesday evening.The state Department of Environmental Protection’s Division of Air Quality held the meeting virtually to take comments and answer questions about the application from West Virginia Methanol, Inc., which applied in November to construct the plant off Route 2 between Belmont and St. Marys near the Ohio River on the site of the former Cabot Corporation carbon black manufacturing facility.Six out of 10 speakers who commented on the application during the meeting expressed concern about the planned facility, which would produce about 1,000 tons of methanol from natural gas daily.The Department of Environmental Protection had already announced its preliminary determination to issue a permit for the facility prior to the meeting.But representatives of Concerned Ohio River Residents, a group opposed to petrochemical development in the Ohio Valley, the Ohio Valley Environmental Coalition, the Sierra Club and the West Virginia Rivers Coalition said that West Virginia Methanol should have to go through a more extensive permitting review process. Environmental regulators did not perform any air quality impact modeling analysis since the proposed facility’s estimated maximum emissions are less than applicability thresholds that would define the facility as “major” under a state legislative rule adopted in accordance with the federal Clean Air Act.The proposed facility does not have the potential to emit more than 100 tons per year of any regulated pollutant according to the permit application, meaning that it is not subject to a state legislative rule that would require a full environmental impact statement and consideration of greenhouse gases and non-air quality impacts, including potential impacts on property values, traffic, zoning and national energy issues.But the facility is close to meeting that threshold in potential to emit nitrous oxides (92.98 tons per year) and carbon monoxide (91.76 tons per year), which those wary of the project contended is close enough to subject the permit application to the more rigorous review process. “If you don’t, there will be a human toll,”

2 arrested after Giles County pipeline protest  - Last November, Thomas Adams was elected to the board of the Skyline Soil and Water Conservation District, which protects the natural resources of the New River Valley. On Friday, he chained himself to a truck involved with the construction of the Mountain Valley Pipeline, which opponents say is ruining those same natural resources. Adams, a former hydrologist with the National Weather Service, was arrested after he refused to leave. The 68-year-old Blacksburg resident was charged with abduction, unauthorized use of a vehicle and obstruction of free passage, according to Virginia State Police. Police were called about 10:30 a.m. to Brickyard Road in the Maybrook area of Giles County, where they saw a crowd of people blocking the road. They also found a man lying beneath a tractor-trailer, attached to its underside with what’s called a sleeping dragon. Specially trained troopers dismantled the lock-box device and removed Adams, who was then checked by paramedics before being taken to a magistrate. “Many will ask: why have I chained myself to a truck carrying pipe for the Mountain Valley Pipeline?” Adams said in a statement released by Appalachians Against Pipelines. “I had no choice.” “I know what looms before us if we continue down the path with our obsessive use of fossil fuels. As a scientist and engineer who has been active in the field of water resources and hydrometeorology in the U.S. and internationally, working on issues related to climate change and global warming, I believe the science,” he said.

Pipeline opponents sentenced to spend day in jail for each day in tree-sit protest  — Two nonviolent protesters must serve a day in jail for every day they spent in tree stands blocking the path of the Mountain Valley Pipeline, a Montgomery County judge ruled Wednesday.For Alexander Samuel Parker Lowe, who occupied the so-called Yellow Finch tree-sit from Nov. 16, 2020, to when he was removed by state police March 24, that worked out to a 254-day jail sentence.For Claire Marian Fiocco, who went up in a tree Jan. 3 and was extracted March 23, the sentence was 158 days.The case pitted the tree sitters’ right to protest a controversial natural gas pipeline against Mountain Valley’s legal authority to cut trees and plow a trench for its buried pipe through a forest near Elliston.“There’s nothing wrong with peaceful protest,” Chief Deputy Commonwealth’s Attorney Patrick Jensen argued. “But the rule of law does not cease to exist just because people disagree with what the pipeline was legally entitled to do.”After convicting the two of obstructing justice and interfering with Mountain Valley’s property rights, General District Judge Randal Duncan said he tried to “apply some common sense” in sentencing them on the misdemeanor charges.The jail sentences were actually double the time Lowe and Fiocco spent in the trees, but Duncan took into account a standard credit toward release of one day they will receive for each day served. Both have been held without bond since their arrests.

Criminal investigation of Mountain Valley Pipeline ends with no charges - A two-year criminal investigation of the Mountain Valley Pipeline has concluded with no charges filed.In a report filed Tuesday with the U.S. Securities and Exchange Commission, the lead partner in the project said it was informed last month that a federal investigation was completed, “without an adverse determination to the MVP joint venture.”Mountain Valley spokeswoman Natalie Cox said it was the company’s understanding that there was no finding of wrongdoing, and that no criminal or civil action would be taken.The case began more than two years ago with a complaint by Preserve Bent Mountain, a Roanoke County group that had been fighting the natural gas pipeline for years.Representatives for the group presented a large amount of evidence to the U.S. Attorney’s Office in Roanoke, asking it to investigate possible violations of the Clean Water Act and other federal laws.While Mountain Valley has repeatedly run afoul of administrative regulations meant to keep muddy runoff from contaminating nearby streams and rivers, a criminal charge would have carried a higher burden of proof.Brian McGinn, a spokesman for the U.S. Attorney’s Office, declined to comment Tuesday.Although federal prosecutors rarely confirm that an investigation is in progress, Mountain Valley was required to inform investors, through its SEC filings, of any potential risk to the company’s financial well-being.

Mountain Valley Pipeline delayed again as project cost keeps rising - The projected in-service date for the Mountain Valley Pipeline has been pushed back yet again. Equitrans Midstream Corp. announced Tuesday it was moving its targeted in-service date for the pipeline from the end of 2021 to the summer of 2022, a delay the company predicted would add at least $200 million to the now $6.2 billion project. The delay factors in more time that the primary developer of the pipeline slated to travel from Northwestern West Virginia to Southern Virginia says it will need to get water crossing permits for the project, which was originally scheduled for completion by the end of 2018 at a cost of just $3.5 billion. Diana Charletta, Equitrans Midstream president and chief operating officer, noted during the company’s first-quarter earnings call Tuesday that Mountain Valley Pipeline LLC, the joint venture that owns the pipeline, still has applications pending with West Virginia and Virginia state environmental regulators for about 300 water crossings while it seeks approval from the Federal Energy Regulatory Commission to tunnel under 120 additional waterbodies. The West Virginia Department of Environmental Protection last month asked for an additional 90 days beyond the 120 days the U.S. Army Corps of Engineers gave the agency to review Mountain Valley Pipeline LLC’s water permit request. But the Virginia Department of Environmental Quality in March requested an additional year to review the pipeline permit application. “Based on the complexity of this project and past public controversy, we cannot reasonably issue the [water] permit before December 2021 and we believe it is quite likely that we could not issue this permit until early 2022,” Melanie Davenport of the department’s water permitting division wrote to the Corps in March. West Virginia and Virginia state environmental regulators are still awaiting responses from the Corps, their spokespeople said Tuesday. Charletta said Equitrans Midstream’s targeted summer 2022 in-service date is based on receiving all water crossing approvals and the lifting of a remaining exclusion zone around Jefferson National Forest by the end of 2021. First announced in 2014, the 42-inch-diameter, 303-mile Mountain Valley Pipeline is slated to provide up to 2 billion cubic feet per day of natural gas from the Marcellus and Utica shale formations to markets in the Mid-Atlantic and Southeastern regions of the United States, traveling from Northwestern West Virginia to Southern Virginia.

Why Equitrans pushed back two pipeline in-service dates - Equitrans Midstream Corp.’s extended timeline to complete the Mountain Valley Pipeline by summer 2022 assumes the Canonsburg-based company gets the remaining approvals by the end of this year. Equitrans (told investors in its first-quarter earnings release that it had pushed back the MVP in-operation date to 2022 because it no longer expected to receive its permits in the previous time frame. That is due in part to Virginia and West Virginia regulators asking the U.S. Army Corps of Engineers for more time to review water permits that MVP needs. Equitrans President Diana Charletta said MVP supported and expects the additional time. That means Equitrans will need another winter season to finish the 303-mile pipeline that will take Marcellus and Utica shale natural gas to Virginia. The pipeline was originally supposed to be in service by the end of 2018 and cost between $3 billion and $3.5 billion, but the cost has steadily been increasing with court and regulatory delays. The estimate is now $6 billion, which is about $200 million more than previous due to what the company said was increased costs due to protecting the rights of way and shifting resources. Equitrans, which will operate the pipeline and own about half, expects to cover $3.1 billion of the cost. Construction on the pipeline resumed in March, and it’s expected to conclude much of it by September with only about 10 miles in water crossings and 8 miles in and near the Jefferson National Forest left to do. Charletta said the timeline assumed MVP would receive the water crossing approvals and a lifting of the Federal Energy Regulatory Commission stop-work order by the end of the year. It previously expected them by July. But even if that happens by the end of December, Equitrans executives said the winter would make it more difficult to complete. More likely the construction schedule will resume in March 2022 and be in service in the early summer, she said. It might still be possible if the company doesn’t get a permit until 2022. “We are not going to do a ton of work over the winter so that if one of those (permits) lags til first quarter we can still hit that same guidance range,” Charletta said. The construction work, instead of going on at the same time as planned, will now be done separately. CEO Tom Karam said the company was frustrated by having to keep a right of way open during the work before allowing the land to be permanently restored. “(Equitrans’ hope and objective is) getting the reviews done as quickly as possible, (with) FERC approval, so we can complete the project and permanently restore the right of way quickly and get off everyone’s property,” he said. “We think that is the most environmentally sound thing we can do right now.” The delay in the Mountain Valley Pipeline is spilling over to a related project, MVP Southgate. That 75-mile pipeline is designed to take the Marcellus and Utica shale gas down through the MVP and then in two counties in North Carolina. The $500 million extension has a commitment from Dominion Energy, but has twice been denied by North Carolina environmental regulators over concerns about the timeline for MVP itself. Southgate is now being planned for construction in 2022 and in service in spring 2023. That would put MVP Southgate about a year behind the previous schedule. “It would be midyear starting construction, that’s our plan right now,” Charletta said. “We want to make sure we get all of our permits and everything taken care of.”

PIPELINES: Moderate Dems join GOP in calling for faster permitting -- Friday, April 30, 2021  -A collection of Senate Republicans and moderate Democrats called on the Federal Energy Regulatory Commission to expedite its review of 14 pending natural gas pipelines.

U.S. natgas futures climb to 10-week high on near record exports - U.S. natural gas futures climbed to a 10-week high on Monday on forecasts for near record exports. That price increase came despite forecasts for milder weather and less heating demand this week than previously expected. Front-month gas futures NGc1 rose 3.5 cents, or 1.2%, to settle at $2.966 per million British thermal units, their highest close since Feb. 19. That kept the front-month in overbought territory with a Relative Strength Index (RSI) over 70 for a sixth day in a row for the first time since November 2019. In the power market, meanwhile, the Electric Reliability Coordinator of Texas (ERCOT), the state's grid operator, said late on Friday that there could be a reserve capacity deficiency Monday afternoon. That caused next-day prices for Monday at the ERCOT North hub EL-PK-ERTN-SNL to jump to $115 per megawatt hour (MWh), their highest since a February freeze when the grid ran short of power and ERCOT imposed rotating blackouts. Real-time prices in ERCOT, however, remained in the $10s and $20s per MWh on Monday and even fell into negative territory for several hours overnight.

June Natural Gas Futures Retreat Despite Favorable Inventory Result - Natural Gas Intelligence - Natural gas futures slipped lower for a second consecutive session on Thursday, despite a bullish government inventory print and continued robust demand for both U.S. liquefied natural gas (LNG) and pipeline exports. The June Nymex contract fell 1.0 cent day/day and settled at $2.928/MMBtu. The contract lost 2.9 cents on Wednesday. July shed eight-tenths of a cent to $2.974 on Thursday.  NGI’s Spot GasNational Avg. declined 5.5 cents to $2.705. The prompt month has repeatedly bumped up against the $3.00 threshold in recent sessions but failed to close above it. Futures remain well off the 2021 high of $3.316 reached in February amid the spike in demand caused by Winter Storm Uri. However, they are well above the spring season low near $2.450 early last month. LNG feed gas levels approached 11.7 Bcf on Thursday, hanging close to record levels. Cool weather and waning supplies in Europe continue to fuel strong demand for U.S. exports. Demand from Asia remains elevated, too, analysts said. Refinitiv analyst Shuya Li, participating on The Desk’s online energy platform Enelyst, said cargo cancellations, a challenge amid the coronavirus pandemic in summer 2020, are unlikely this year with demand holding steady at lofty levels. U.S. pipeline exports to Mexico also are near record levels – regularly approaching 7 Bcf/d. “This summer, overall pipeline exports will be nearly 0.8 Bcf/d higher year-on-year,” Li estimated. Export activity helped keep overall natural gas demand solid during the week ended April 30, the period covered by the U.S. Energy Information Administration’s (EIA) latest storage report. The agency on Thursday posted an injection of 60 Bcf into storage for the week. The print came in a few ticks below expectations, but it failed to galvanize market support. Analysts on The Desk said traders likely noted that the result was four times greater than the week earlier injection and that it signaled larger injections to come in May. Early estimates for next week’s report were for builds in the 70s-80s Bcf. For this week’s print, estimates generated by Reuters and Bloomberg polls landed at medians of 65 Bcf, while a Wall Street Journal survey produced an average of 62 Bcf. NGI’s model predicted a 76 Bcf increase. Last year, EIA recorded a 103 Bcf injection for the similar week, and the five-year average is an 81 Bcf build. The build for the April 30 week lifted inventories to 1,958 Bcf, though the total was well below the year-earlier level of 2,303 Bcf and slightly below the five-year average of 2,019 Bcf. By region, the South Central build of 20 Bcf led all others. The Midwest and East regions followed closely with builds of 15 Bcf and 13 Bcf, respectively, according to EIA. Pacific inventories grew by 7 Bcf, while Mountain region stocks increased by 5 Bcf.

U.S. natgas futures rise on cooler forecasts next week  (Reuters) - U.S. natural gas futures rose on forecasts for cooler weather and higher heating demand next week than previously expected. That lack of price movement came despite forecasts for milder weather in mid May, a small decline in exports and an even smaller increase in output so far this month. Front-month gas futures NGc1 rose 3.0 cents, or 1.0%, to settle at $2.958 per million British thermal units. For the week, the front-month was up over 1%, putting the contract on track for its fourth week of gains in a row for the first time since February. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 90.8 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April, but well below November 2019's monthly record of 95.4 bcfd. Refinitiv projected average gas demand, including exports, would rise from 87.2 bcfd this week to 88.1 bcfd next week as temperatures decline before falling to 84.7 bcfd as the weather turns milder. The forecast for next week was higher than Refinitiv estimated on Thursday.  The amount of gas flowing to U.S. LNG export plants averaged 11.4 bcfd so far in May, down from April's monthly record of 11.5 bcfd. Buyers around the world continue to purchase near-record amounts of U.S. gas because prices in Europe and Asia remain high enough to justify the cost of buying and transporting the U.S. fuel across the ocean.

US working gas storage capacity increases marginally in 2020: EIA | S&P Global Platts - Although total US working gas storage capacity has remained mostly static in the last two years, strong production and less price volatility has reduced the need for investing into additional underground storage. US natural gas' demonstrated peak storage capacity declined slightly year over year in 2020, while total working gas capacity increased marginally, according to the US Energy Information Administration's annual storage report. "Working natural gas design capacity increased by 5 Bcf in the South Central region," the report said. "The most notable increase in the region was the 4.2 Bcf gain reported for the Egan Storage Dome by Egan Hub Partners. Dewatering the salt cavern raised the capacity of this field." Demonstrated peak storage capacity represents the highest amount of working gas recorded. Working natural gas design capacity means the maximum amount of working gas that could feasibly be injected into storage. Demonstrated peak capacity from December 2015 through November 2020 totaled 4.253 Tcf. The South Central region had the highest demonstrated peak capacity volume of 1.439 Tcf of all five regions. However, at 1.186 Tcf in the Midwest region, it was at 97% of maximum capacity compared with 93% reached in South Central. It was the second consecutive year in which Midwest stocks nearly reached peak capacity. Data by S&P Global Platts Analytics demonstrates the region is already showing strong injection activity early in the season. Injections in the first half of April averaged 1.4 Bcf/d, 399 MMcf/d above 2020 and the strongest for the time in at least six years. Temperatures, however, dropped later in the month and brought injections for the entire month to their weakest since 2017 at 1.4 Bcf/d. However, injections did ramp up at the end of the month, leading to another remarkable start to May injections, at 4.4 Bcf/d month to date. Platts Analytics expects this to mellow slightly, with an average of 4.1 Bcf/d this month, up roughly 700 MMcf/d year on year. The EIA report finds several trends in recent years have reduced the necessity for investing in new underground storage. Higher levels of natural gas production compared with a few years ago may have reduced some customers' need to withdraw from storage to meet their natural gas needs. Gas price volatility has declined in recent years. The seasonal spread between summer and winter gas prices has shrunk, reducing economic incentives to inject supply into reservoir and aquifer storage. Also, midstream investment has enhanced grid interconnectedness and flexibility. However, growing demand in gas-fired power generation as well as ever-increasing exports via LNG terminals and pipelines to Mexico could increase the need for additional storage, especially in the South Central region. In April, exports to Mexico reached record levels just shy of 7 Bcf/d, Platts Analytics' data shows. The record-setting volumes were accompanied by population-weighted temperatures in the upper 70s Fahrenheit, about 5 degrees above normal, and by a spike in electric cooling demand.

Eastern Kentucky oil refinery exceeds EPA emissions limit for cancer-causing chemical -- An oil refinery in Eastern Kentucky exceeded federal emissions standards for a chemical known to cause cancer.According to a report by the non-profit watchdog group Environmental Integrity Project, Catlettsburg Marathon in Boyd County exceeded the U.S. Environmental Protection Agency’s benzene action level by 53% in 2020. The net concentration was 13.8 micrograms per cubic meter — the EPA’s action level is nine micrograms a year.In a one-year span, the concentration of benzene grew by 344% at Catlettsburg Marathon.The refinery has been a major polluter in the Tri-State area for decades, according to Robin Blakeman, an Ohio Valley Environmental Coalition organizer.Benzene is a carcinogen that can contribute to cancer of the blood cells and respiratory ailments. The report stated benzene is one of the most dangerous pollutants released by oil refineries and petrochemical plants.The EIP report documented high levels of benzene at 13 refineries, many of them surrounded by communities with high amounts of poverty. On average, 43% were in poverty and 57% were people of color.“We have President (Joe) Biden saying that environmental justice will be at the center of everything and we are suggesting today the administration start here,” said Eric Schaeffer, director of EIP. “This is a great place to start keeping that promise.”About 11,500 residents live within three miles of the Catlettsburg refinery, of that 45% are living below the national poverty level.“Unfortunately, due to high poverty levels in this area, the health risks of toxic chemicals like benzene are often ignored,” Blakeman said in a statement. “Once again, Appalachian communities are considered acceptable sacrifice zones.”

Byhalia Pipeline rally ahead of Memphis City Council vote — Boxtown and Westwood neighbors are continuing to put pressure on elected officials to stop the Byhalia Pipeline. Members of those communities rallied Saturday afternoon to continue bringing awareness to a potential health crisis that will affect many marginalized Memphis neighborhoods. On Tuesday, the Memphis City Council is expected to vote on a city ordinance that would limit new pipeline projects with oil or "hazardous" liquids from being built or expanded within city limits. Neighbors and critics, like Dr. Roz Nichols of Memphis Interfaith Coalition for Action and Hope are concerned if the pipeline project is approved by the Memphis City Council, it will contaminate the water in Memphis and parts of northern Mississippi. "We will remain steadfast, unmovable, always abounding in the work of justice determined to save what is ours," Nichols said. Nichols said the predominantly Black and low-income communities that would be affected will not back down to the oil companies. "Boxtown is a community of people," Nichols said. "They will not be silenced, they will not be overlooked, they will not be dismissed because they are people and people matter." The Southern Environmental Law Center sent a letter to the state of Tennessee on Thursday urging them to stop the Byhalia Pipeline claiming it's "unneeded." It further claimed the Byhalia Pipeline did not disclose the existence of the Collierville Connection Pipeline, which would eliminate a need for a new one. "If the company had disclosed the Collierville Connection Pipeline, the Tennessee Department of Environment and Conservation (TDEC or Department) would have been required to evaluate it as an alternative to the construction of the Byhalia Connection Pipeline because the use of an existing pipeline or pipeline route has the potential to avoid and minimize new impacts on waters of the State, including streams, wetlands, and groundwater," The Southern Environmental Law Center stated in the letter. "Use of an existing pipeline would also avoid impacts on residents along a new path." Neighbors said they will not stop fighting for justice and a quality of life they think everyone deserves. "This fight is not over by a long shot!" Boxtown neighbor Batsell Booker said.

Charity or manipulation? Memphis nonprofits discuss, defend accepting donations from Byhalia Pipeline - - Byhalia Pipeline arrived in Memphis with gifts in one hand and plans for a crude oil pipeline in the other and called both community investments. But what is charity to the Texas corporation is manipulation to critics, who see it as a tactic to buy support and weaken opposition to the project.Byhalia Pipeline, a joint venture of Plains All American Pipeline and Valero Energy Corporation, has donated over $1 million to Mid-South community development corporations, church-affiliated groups and other nonprofit organizations over the past year. The proposed route of the Byhalia Connection Pipeline is through several Black Southwest Memphis communities that are already surrounded by polluting industries.(See which organizations kept donations from Byhalia Connection Pipeline, who returned the money and who didn’t respond.)Critics have called the plan environmental racism and say the route poses a risk to theMemphis Sand aquifer, where the city draws its water. Byhalia Pipeline disputes those assertions.Since the proposed project’s announcement in 2019, the company has formed a community advisory board and handed out donations to a range of organizations, including the NAACP Memphis Branch, Uplift Westwood CDC, the Mid-South Food Bank, the Memphis Library Foundation and a group building a memorial to Black journalist Ida B. Wells. There was no requirement to support the pipeline to receive the donation, officials of some organizations said.The NAACP and MCAP will host a rally against the pipeline at 2 p.m. Saturday at Alonzo Weaver Park, next to Mitchell High School, 658 W. Mitchell Road. Attendees should park at the school.But gifts with no apparent strings attached is a well-known tactic used by fossil fuel companies to manipulate communities, according to a reportreleased this month by the national NAACP Environmental and Climate Justice Program.“Co-opting can be used as a tactic to neutralize or weaken public opposition,” according to the second edition of “Fossil Fueled Foolery: An Illustrated Primer on the Fossil Fuel Industry’s Deceptive Tactics.”“It creates deceptive alliances with local churches, non-profit organizations, and other groups by offering financial support in the form of charitable contributions, gifts, and endowments,” the report says.

Memphis pipeline faces environmental justice reckoning -- Monday, May 3, 2021 -- — The Byhalia Connection pipeline, a 50-mile oil conduit planned to run through and around Memphis, has come under fire from environmental groups and community activists. Opponents are also seeking to harness deep-seated resentment from years of pollution from the heavy industry that flanks the city's heavily Black southwest corner.

Byhalia pipeline: Environmental groups demand TN agency withdraw construction permit - A coalition of environmental groups that oppose the Byhalia Connection pipelinehave written a letter demanding the Tennessee Department of Environment and Conservation to revoke or suspend its permit for the planned project.The letter is one of many moves in the fight over the nearly 45-mile crude oil pipeline which would pass through mostly Black neighborhoods as it run from Memphis to Marshall County, Mississippi.Opponents have raised concerns about several environmental issues, including potential damage to the area's underground water supply.The letter comes from the groups Memphis Community Against Pollution, Protect Our Aquifer and Tennessee Chapter Sierra Club.Plains All American Pipeline is seeking to build the pipeline in partnership with Valero Energy Corp. The letter says the pipeline companies withheld crucial information during their application to the state."Specifically, Byhalia failed to disclose the existence of the Collierville Connection Pipeline, a crude oil pipeline that already connects the Diamond Pipeline and the Capline Pipeline—the same two pipelines proposed to be connected by the Byhalia Connection Pipeline.""If the company had disclosed the Collierville Connection Pipeline, the Tennessee Department of Environment and Conservation . . . would have been required to evaluate it as an alternative to the construction of the Byhalia Connection Pipeline because the use of an existing pipeline or pipeline route has the potential to avoid and minimize new impacts on waters of the State, including streams, wetlands, and groundwater. Use of an existing pipeline would also avoid impacts on residents along a new path."Efforts to reach a representative of the pipeline organizations were not successful late Friday. The company has argued the pipeline can be constructed and operated safely. The state agency declined to comment. "We cannot comment due to pending litigation," said spokesman Eric Ward.

Memphis City Council delays vote to halt Byhalia Connection pipeline -- The Memphis City Council won’t vote on an ordinance that would regulate high-volume pipelines, including the Byhalia Connection pipeline, until at least July.The council held the ordinance in question Tuesday after the council’s attorney Allan Wade said the measure raised “constitutional” concerns and the city could lose litigation related to it.When the council decided to hold the pipeline ordinance, Plains All American, the developer of the Byhalia pipeline project, verbally agreed to dismiss eminent domain and condemnation proceedings already underway in Shelby County. Representatives of Plains told the council that the project would pause and that it would communicate directly with city attorneys to come to an agreement.Wade said the ordinance, which proponents had said would not prevent Byhalia from proceeding, would in fact stop the pipeline. If the intention of the council was to stop the pipeline, Wade said, they should just do it and avoid any unintended consequences of a broad ordinance.

Builders of contested Memphis pipeline weigh route changes -- Wednesday, May 5, 2021 -- Plains All American Pipeline LP says it is considering changing the route of its proposed Byhalia Connection oil pipeline in the Memphis, Tenn., area and has agreed to pause its work on the pipeline for two months.

Abandoned wells a drag on Arkansas --Professors and ecologists Matthew Moran and Maureen McClung started their research with the Fayetteville Shale in North-Central Arkansas around 2019, examining how the wells and their infrastructure were affecting the landscape and the economic costs associated with those impacts. "These costs are often not part of the conversation," McClung said. "We saw a need to make a case that restoration should be happening after these oil and gas wells run dry, because they basically just exist on the landscape and are doing no good for anybody. It was pretty astounding the number of wells we found sitting useless." In the mid-2000s, companies arrived in droves and started drilling for natural gas from the Fayetteville Shale, a formation that stretches across the state to the Mississippi River. Drilling peaked in 2008, but development of new wells declined rapidly, hitting near zero by 2016. The Hendrix researchers found almost one-fifth of the more than 6,230 wells in the Fayetteville Shale were nonproducing in 2020. However, many of them are on well pads that still support other producing wells, and therefore are not currently restorable. This was far from the first well boom in the state, though. Thousands of wells dot the landscape of southern Arkansas -- reminders of the beginning of commercial oil production in the state and jobs that put food on the tables in towns like El Dorado and Smackover during the Great Depression. By 1925, the Smackover field had become the largest-producing oil site in the world, according to the American Oil and Gas Historical Society. Lands with nonproducing wells can sit unrestored for years, even decades. Old wells can leak methane gas and contaminate groundwater, and they are safety hazards for wildlife and communities alike. But what's being lost from these lands can be difficult to quantify financially. For its work, the Hendrix team looked at agricultural production and carbon storage. The researchers estimated that restoring the 2 million acres across the nation would cost $7 billion but return $21 billion to the economy over the next 50 years. Agriculture makes up two-thirds of that value.

Groups sue over US program allowing pipelines on wetlands (AP) — Environmentalists have filed a new legal challenge to a U.S. government program that allows oil and gas pipelines to be built across wetlands, rivers and other bodies of water. The lawsuit filed Monday in U.S. District Court in Great Falls, Montana, alleges that the U.S. Army Corps of Engineers has let companies skirt environmental reviews of potential spills by granting a blanket construction permit to the industry. The Center for Biological Diversity, Sierra Club and other groups behind the litigation won a court order last year that temporarily blocked the program, known as Nationwide Permit 12. U.S. District Judge Brian Morris said officials did not adequately consult with wildlife agencies about pipelines’ potential harm to drinking water supplies and imperiled plants and animals. The Army Corps issued a new permit in January, saying it expects the permit to be used more than 8,000 times a year and affect 615 acres (249 hectares) annually of wetlands and other bodies of water. The groups behind Monday’s lawsuit said the agency failed to consider how that work could affect endangered sturgeon, whooping cranes and other wildlife that depend on wetlands. The permit can be used only for pipeline crossings that disturb a half-acre or less of steams or wetlands. Critics say that ignores the cumulative effects from hundreds of individual water crossings along a major pipeline’s route. The Army Corps has issued nationwide permits since the mid-1970s, and they were put into law in 1977 under Democratic President Jimmy Carter, according to the Congressional Research Service. But opposition to pipelines has grown more intense in recent years as the industry has been pulled into a broader debate over climate-changing greenhouse gases that come from burning the fossil fuels the lines carry. Sierra Club attorney Doug Hayes said the permit program has become “a tool for corporate polluters to fast-track climate-destroying oil and gas pipelines and exempt them from critical environmental reviews.”

Colonial pipeline: Cyberattack forces major US fuel pipeline to shut down - A cyberattack forced the temporary shut down of one of the US' largest pipelines Friday, highlighting already heightened concerns over the vulnerabilities in the nation's critical infrastructure. The operator, Colonial Pipeline, which transports more than 100 million gallons of gasoline and other fuel daily from Houston to the New York Harbor, according to its website, said it learned of the cyberattack on Friday, causing them to pause operations. "In response, we proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems," the company said in a statement. Colonial said it engaged a third-party cybersecurity firm to launch an investigation into the "nature and scope of this incident" and also contacted law enforcement and other federal agencies. CNN has reached out to the US Cybersecurity and Infrastructure Security Agency for comment. The attack comes amid rising concerns over the cybersecurity vulnerabilities in America's critical infrastructure following recent incidents, and after the Biden administration last month launched an effort to beef up cybersecurity in the nation's power grid, calling for industry leaders to install technologies that could thwart attacks on the electricity supply. Colonial said Friday that it's "taking steps to understand and resolve this issue." "At this time, our primary focus is the safe and efficient restoration of our service and our efforts to return to normal operation. This process is already underway, and we are working diligently to address this matter and to minimize disruption to our customers and those who rely on Colonial Pipeline," the company said. Colonial, founded in 1962, says it transports about 45% of all fuel consumed on the East Coast. The pipeline system that spans more than 5,500 miles has two main lines: one for gasoline and another for things like diesel and jet fuel.

U.S. pipeline operator that transports 45% of East Coast fuel shuts entire network after cyberattack - Top U.S. fuel pipeline operator Colonial Pipeline has shut its entire network after a cyber attack, the company said in a statement on Friday. Colonial's network supplies fuel from U.S refiners on the Gulf Coast to the populous eastern and southern United States. The company transports 2.5 million barrels per day of gasoline, diesel, jet fuel and other refined products through 5,500 miles (8,850 km) of pipelines. Colonial Pipeline says it transports 45% of East Coast fuel supply. The malicious software used in a cyberattack was ransomware, a type of malware that is designed to lock down systems by encrypting data and demanding payment to regain access, two cybersecurity industry sources said. The malware has grown in popularity over the last five years and is most often deployed by cybercriminal groups. The company learned of the attack on Friday and took systems offline to contain the threat, it said in the statement. That action has temporarily halted operations and affected some of its IT systems, it said. The company has engaged a third-party cybersecurity firm to launch an investigation, and Colonial has contacted law enforcement and other federal agencies, it said. Colonial did not give further details or say for how long its pipelines would be shut. Reuters reported earlier on Friday that Colonial had shut its main gasoline and distillate lines. During the trading session on Friday, Gulf Coast cash prices for gasoline and diesel edged lower. Longer-term price effects will depend on the amount of time that the lines are shut. If barrels are not able to make it onto the lines, Gulf Coast prices could weaken further, while prices in New York Harbor could rise, one market participant said. Colonial significantly shut down its gasoline and distillate lines during Hurricane Harvey, which hit the Gulf Coast in 2017. During that time, spot Gulf Coast gasoline prices rose to a five-year high, while diesel prices rose to around a four-year high.

Sempra likely to delay decision on Texas LNG project until next year -  Sempra Energy — a big player in the global liquefied natural gas export market — said Wednesday during its first-quarter earnings call that the company will likely make a final investment decision on building a proposed LNG facility near Port Arthur, Texas, in 2022 instead of this year. Sempra officials cited the continued impacts of the pandemic on worldwide energy markets and a focus on reducing the project’s greenhouse gas emissions for the potential delay but said they remain bullish on the economics of sending LNG overseas to countries eager to replace coal with natural gas. “The consultants we work with think that by 2030 you could see the market climb to about 550 million tons per annum and today it’s around 365, so we’re pretty optimistic about where we’re at in terms of our development portfolio.,” said Sempra CEO Jeff Martin. Commercial activity for large-scale LNG projects have slowed since COVID-19 affected the global economy and the first phase of Port Arthur project, estimated at 11 million metric tons per year, is a big one that would have to be built at a site without any existing infrastructure, which would add to construction costs. ADVERTISEMENT Sempra is already the majority owner of the $10 billion Cameron LNG facility on the Louisiana Gulf Coast — that has plans to expand — and the company’s subsidiary in Mexico, IEnova, recently received approval from the Mexican government to add an export component to the already existing Energía Costa Azul LNG facility in Ensenada. The potential for “greening up of the value chain,” as Martin put it, comes as LNG exporters in the U.S look to blunt criticism of the climate impacts of natural gas, a fossil fuel. In November, the French power company Engie backed out on a $7 billion deal with an LNG firm, reportedly because the government of France — which owns 24 percent of Engie — had environmental concerns about methane leaks and hydraulic fracturing of natural gas at U.S. sites. Earlier this week, Cheniere Energy and Royal Dutch Shell announced they had collaborated to ship a cargo of LNG it called “carbon-neutral” from Cheniere’s Sabine Pass LNG facility in Louisiana that was delivered to Europe in early April, using offsets bought from Shell.

Florida Congress members call to end oil drilling in Big Cypress - A handful of Congress members from Florida are urging a federal agency to deny oil drilling permits in the Big Cypress National Preserve. A letter, sent April 23 by Democratic Congress members Debbie Wasserman Schultz, Ted Deutch, Lois Frankel, Charlie Crist and Frederica Wilson to the Department of the Interior, asks for a full environmental impact statement for two oil extraction permits in the preserve. Burnett Oil Co., based in Texas, filed the permits through the Florida Department of Environmental Protection. The state agency recently took over a federal application process to dredge and fill within wetlands. Burnett is leasing land from Collier Resources Co., which owns the subsurface mineral rights in the preserve. Alia Faraj, spokeswoman for Burnett, previously told Naples Daily News the company’s efforts to minimize environmental impacts will create a net-zero impact on wetlands. The letter was addressed to the department’s deputy director of operations, Shawn Benge, and new Fish and Wildlife and Parks Assistant Secretary Shannon Estenoz. Estenoz was an advocate for Everglades restoration under the Obama administration and worked as the Everglades Foundation’s chief operating officer. Melissa Abdo, Sun Coast regional director for the National Parks Conservation Association, said Big Cypress is an iconic preserve and oil permits should not be allowed. “We’re hopeful DOI’s new leadership is going to have an eye toward implementing what (President) Biden committed to: A clear commitment to halt new oil and gas permitting on public lands,” Abdo said.

One of America's most powerful oil lobbyists tours Louisiana to fight the offshore drilling ban  - Fearful that a temporary ban on new federal leases onshore and offshore won't be lifted and could become permanent, the top executive for the American Petroleum Association has been in Louisiana this week voicing a desire to sway the Biden administration towards softening what they consider abrupt policies against fossil fuels. Mike Sommers, chief executive officer of the American Petroleum Institute, got the whirlwind tour of Louisiana in recent days, meeting with membership companies and politicians who are vying to sway the Biden administration towards softening what they consider abrupt policies against fossil fuels. Sommers was able to sample plenty of local crawfish, tour a massive liquefied natural gas export terminal and see a wetland supported using oil and gas money, while voicing his top concern that a temporary ban on federal leases onshore and offshore won't be lifted, ever.  "There's a saying in Washington that there's nothing more permanent than a temporary program," Sommers said.  While it doesn't impact the ability for companies to operate on private land, the environmental stewardship push now may stunt the industry for decades to come, he said. API's members include Exxon Mobil, Shell, Chevron and BP, among others on the extraction and refinery side of the petrochemical pipeline.  The long-term impact for the oil and gas sector in the Gulf of Mexico is unclear. All oil and gas exploration offshore are federal waters, requiring leases auctioned off and royalties collected in exchange for extraction of public natural resources.  After multinational giants work through existing projects, which could take years, the drilling ban eventually could catch up if the work and the money dries up.  "Fossil fuels are not the enemy; greenhouse gas emissions are the enemy," Sommers said.  The fossil fuel lobbyist pushed back on claims the coronavirus pandemic marked the "peak" for oil demand, when workers  stayed home and took Zoom meetings for months instead of traveling.  The International Energy Agency estimated global demand before the pandemic was 100 million barrels of oil each day in 2019.  "In the worst part of the pandemic, in April of last year, the world was still consuming 81 (million) barrels of oil every single day. We basically shut down the world economy and we were still using 80% of what we were using pre-pandemic," he said. "And we're getting close to the point now where we're getting back to that 100 (million) barrels."

Velesto Provides Update on Sunken Rig --Velesto Energy Berhad has provided an update on the Velesto Naga 7 rig, which was revealed to have submerged on May 4. The company announced on Thursday that the focus remains on rescue, evacuation, and recovery efforts and revealed that all 101 personnel on-board the rig had been transferred safely to Miri, Sarawak. As of Thursday, Velesto Energy highlighted that it was unable to estimate the overall financial impact on the group from the incident but outlined that it expects this to be mitigated as the rig is “adequately insured”. Velesto Energy said it is working closely with the client and insurers and providing full cooperation to the relevant authorities. The company also noted that other businesses of the group are operating as usual, including the other six rigs in its fleet. The Naga 7 rig sinkage occurred due to “oil rapid penetration”, according to Velesto Energy, which highlighted back in March that the rig had secured a deal with ConocoPhillips Sarawak Limited and ConocoPhillips Sarawak Oil Limited with a tentative start date sometime in the first half of this year. The contract included the drilling of up to three wells using the Naga 7, which has a drilling depth capability of 30,000 feet and a rated operating water depth of 375 feet, Velesto Energy reveals on its website. ConocoPhillips did not immediately respond to an emailed request sent by Rigzone on Thursday asking for a statement on the incident. Velesto Energy’s wholly owned rig fleet comprises the Naga2, Naga 3, Naga 4, Naga 5, Naga 6, Naga 7, and Naga 8 jack-up drilling rigs. The company, which was formerly known as UMW Oil & Gas Corporation Berhad, also has four hydraulic workover units comprising the Gait 1, Gait 2, Gait 5, and Gait 6.

Hearings on proposed oil and gas waste disposal facility in San Augustine County to begin Tuesday (KTRE) - This wooded property in San Augustine County is selected by a Montana company for the construction of an oil and gas waste disposal facility.Tomorrow morning, a hearing on a permit request by PA Prospect begins before the Texas Railroad Commission in Austin.Resident Ann Bridges, who lives across the road from one of three properties owned by the company and Director of Friends of Lake Sam Rayburn Amanda Haralson explain their interest in the proceedings.On Monday afternoon, PA Prospect released a statement on the matter.“The purpose of the administrative hearing is to ensure that site, design, construction and operation of the proposed facility in San Augustine County meets all regulatory standards required by the regulating state agency, the Railroad Commission of Texas.  A license must ensure that the facility is designed and constructed with state-of-the-art and robust engineering features (including multiple liner systems and leachate detection and collection systems) so that surface and subsurface water is not endangered.  The Railroad Commission licenses these types of oil-and-gas-waste-only facilities that handle the oil and gas industry’s liquid and solid wastes (primarily produced salt water, and drill cuttings which are mostly soil) across the state of Texas.”The hearing is scheduled for three weeks with PA Prospect the first to present testimony. The meeting is via zoom.

Exxon CEO says advancing U.S. carbon capture project with rivals, government -(Reuters) - Exxon Mobil Corp is advancing a carbon capture and storage project along the U.S. Gulf of Mexico through talks with rivals and government officials, Chief Executive Darren Woods said in an interview on Friday. The largest U.S. oil producer this month floated a public-private initiative that would collect and sequester planet-warming carbon dioxide emissions from petrochemical plants along the Houston Ship Channel, a 50-mile (80-km) long waterway that is part of the Port of Houston. Woods declined to identify by name the businesses Exxon hopes to attract to the project, saying he aims to lure the region's top 50 CO2 emitters, and is lobbying federal, state and local officials for support. "I've been very involved with conversations with the mayor and the local government officials in Houston, with the governor and officials here in Texas, and at the federal level in the administration on this opportunity," Woods said in an interview. It would cost at least $100 billion from companies and government agencies to finance a project that could store 50 million tonnes of CO2 by 2030 and double that amount by 2040, Exxon has said. Exxon and U.S. rivals Chevron Corp and Occidental Petroleum are "uniquely positioned to scale" carbon capture and storage technology, said Morgan Stanley analyst Devin McDermott in a report on Friday. The Houston Ship Channel proposal would require "new policies to drive investment," he said. The project faces enormous hurdles, including financing and support from government agencies for permitting and carbon regulations. The proposal arose as Exxon faces a proxy fight over its plan to increase fossil fuel production that could greatly expand its carbon emissions. Activist hedge fund Engine No. 1 is battling the company over four board seats and the company's strategic direction. ./p>

ExxonMobil begins lockout of hundreds of Texas oil workers --Oil giant ExxonMobil initiated a lockout of more than 650 workers at its Beaumont, Texas refinery and blending and packaging plant on Saturday morning after negotiations broke down between the company and the United Steelworkers (USW) union. USW officials agreed to the “orderly transfer” of the workers off of ExxonMobil’s property and have not called an official strike. USW Local 13-243 and ExxonMobil met Friday night and Saturday morning, attempting to come to an agreement before the lockout began. By 1 p.m. Saturday, union representatives said more than 200 workers on their regular shift had been escorted out of the facility, two at a time. Some workers reported they had been forced to leave the property as early as the night before. The USW and ExxonMobil began bargaining a new contract on January 11. The company demanded workers accept a proposal which included major changes to workers’ safety, job security, and seniority rights. On April 23, ExxonMobil announced its intention to lock workers out on May 1 if they did not agree to the givebacks. The USW asked for the current contract to be extended by a year, but ExxonMobil said it would not do so and demanded that the USW bring its contract proposal to a vote. The USW, knowing that workers would overwhelmingly reject another concessionary contract, opted instead to let the company lock out its members. Workers gathered at a lot adjacent to the refinery and formed a picket line Saturday morning, carrying signs denouncing ExxonMobil’s actions. Health and safety are major concerns for workers at the plant and a major reason an agreement has not been reached. ExxonMobil claimed health and safety demands put forward by workers “would significantly increase costs” and limit its ability to remain competitive. Last October, ExxonMobil, which had a market valuation of $174 billion at the end of 2020, suspended its contribution to employees’ 401(k) pension plans, citing the effects of the pandemic. At the time, a company spokeswoman said, “ExxonMobil’s total remuneration remains competitive despite the suspension.” Oilworkers have been devastated by the COVID-19 pandemic. The slowdown of the global economy sharply drove down oil prices in early 2020, initiating a wave of mass layoffs in the oil sector. More than 118,000 energy workers were laid off worldwide between March and July in 2020, accounting for 15.5 percent of the industry’s workforce. Combined with the 200,000 job cuts from 2014-16, amid another crash in oil prices, the losses are staggering. One of the most common causes of accidents as reported by workers is understaffing. Jobs in the oil industry are physically demanding and workers normally see 12-hour shifts plus overtime. Hazardous materials and heavy machinery create an environment with a high potential for workplace injury. More than 1,500 oil rig workers died on the job between 2008 and 2017. .

Lockout of hundreds of oil workers continues in Beaumont, Texas -- Days after ExxonMobil locked out more than 600 employees from its Beaumont, Texas refinery and packaging plant, United Steelworkers (USW) union leadership and the company have not met to negotiate a contract since Friday. ExxonMobil and the USW have been negotiating since January, but ExxonMobil claimed workers’ health and safety demands “would significantly increase costs.” The company released a statement stating it had been bargaining “in good faith,” but negotiations have yet to resume. The oil company escorted USW Local 13-243 members from the plant on Saturday after union officials organized an “orderly transfer” of the workers off of the premises. ExxonMobil said it barred workers from entering because of the union’s refusal to call for a vote on a contract proposal and fear that workers might go on strike. Days before the lockout, the company brought in managers from other facilities and hired temporary workers as replacements to keep the facility running. After the USW handed over the plant to corporate management, workers formed a picket line at a lot adjacent to the plant. USW District 13 Representative Richard “Hoot” Landry told the Beaumont Enterprise Monday that the union scheduled picket activities outside the refineries and he had been meeting with district leadership. Landry said talks had been focused on workers’ benefits. “Workers will receive at least one more check from (ExxonMobil), but we are doing everything we can right now to secure resources from our international union and local communities within the state of Texas to provide benefits to our membership.” Union officials at the plant said they sent a request to the USW international leadership to help striking workers by tapping into the strike and defense fund, financed by union dues to support workers during strike activity. Landry also stated the local union reached out to the Texas Workforce Commission to secure approval for unemployment benefits for locked out workers. Landry claimed ExxonMobil locked out workers because the company wanted to maintain control of the situation. However, he admitted the union never wanted a work stoppage and actively worked to avoid one. By preventing a strike the USW has given all the initiative in the situation to the energy giant. Neither the USW nor ExxonMobil has publicly revealed specific details in the conflict over a new contract, but company officials said there was strong disagreement between the two sides.

Texas freeze delivers billions in profits to gas and power sellers (Reuters) - Natural gas suppliers, pipeline companies and banks that trade commodities have emerged as the biggest market winners from February's U.S. winter blast that roiled gas and power markets, according to more than two dozen interviews and quarterly earnings reports. The deep freeze caught Texas's utilities off-guard, killed more than 100 people and left 4.5 million without power. Demand for heat pushed wholesale power costs to 400 times the usual amount and propelled natural gas prices to record highs, forcing utilities and consumers to pay exorbitant bills. After the storm, few companies wanted to talk about their financial gains, unwilling to be seen as profiting off others' hardships. But a clearer picture is emerging from quarterly earnings and as utility companies smarting from big bills sue to recoup their losses. The biggest winners were companies with access to supplies, including leading energy trader Vitol, gas suppliers Kinder Morgan , Enterprise Products Partners and Energy Transfer , oil giant BP plc , and banks Goldman Sachs , Bank of America (BofA) and Macquarie Group . The firms combined stand to reap billions of dollars in profits by selling gas and power during the storm, according to interviews and reviews of public documents. It is possible that some companies may never collect on those sales due to ongoing litigation, however. Losers include producers that could not deliver oil and gas due to frozen wellheads, gathering systems and processing stations. The week-long output loss cost shale producer Pioneer Natural Resources $80 million, Chevron about $300 million, and Exxon Mobil $800 million. Utilities are complaining of price gouging and of unwarranted supply cancellations. The Federal Energy Regulatory Commission is reviewing gas and power markets for potential market manipulation. Goldman Sachs and Vitol did not comment. BofA did not respond to a request for comment. Energy Transfer appears to have been the biggest winner, saying in its quarterly results it expects gains of about $2.4 billion for the year from the storm. The pipeline giant made most of its money from trading and from selling what it had in storage during the period when prices skyrocketed. Rival Enterprise Products Partners said the storm led to gains of about $250 million in the first quarter. Kinder Morgan, another gas storage and pipeline operator, earned about $1 billion during the storm, the vast majority from higher gas prices and sales.

Dallas pipeline giant Energy Transfer made $2.4 billion as Texas winter storm’s biggest winner --Dallas-based Energy Transfer LP, the pipeline giant controlled by billionaire Kelcy Warren, has emerged as the biggest winner so far from the deadly winter storm that paralyzed Texas in February. The company saw a positive earnings impact from the extreme weather of about $2.4 billion, it said Thursday in its first-quarter earnings statement. Energy Transfer raised its full-year earnings guidance to as much as $13.3 billion, from up to $11 billion previously. The stock jumped as much as 3.6% in after-hours trading. Energy Transfer joins a growing list of gas market players who reaped windfalls totaling almost $5 billion amid the chaos of the storm. Plunging prices and power cuts interrupted the normal flow of gas from many wells. Market players with available supplies were able to sell at sky-high spot prices. Speculation over the extent of Energy Transfer’s gains began soon after the storm when co-chief executive officer Marshall McCrea told investors in a conference call that the company had done “exceptionally well” as a dramatic gas shortage spurred demand for the supplies held in the company’s storage facilities. The fossil-fuel hauler was sued by CPS Energy, a Texas utility, in the immediate aftermath of the crisis for allegedly charging a natural gas price more than 15,000% higher than normal. Energy Transfer rejected the claims. “During the storm, employees manned facilities 24 hours a day, ET’s transmission lines remained fully operational and the Partnership did everything within its control to keep plants running and field compression idling so that ET would be prepared to deliver natural gas to facilities throughout Texas for residential consumption and power generation,” the company said in the statement. Kinder Morgan Inc., another pipeline operator, said last month the storm had a $1 billion positive impact on its results. BP PLC also reported an “exceptional” quarter in gas trading; while it didn’t break out more detail, one Citigroup Inc. analyst estimated BP’s Texas-related gain easily exceeded $1 billion, Meanwhile Australian investment bank Macquarie Group Ltd. pocketed $210 million. Energy Transfer operates over 90,000 miles of pipelines and related infrastructure spanning 38 states and Canada. The company posted a record quarterly net income of $3.29 billion in the first quarter, far exceeding the $820.5 million average of analysts’ estimates compiled by Bloomberg. The company lost $854 million a year earlier.

ENERGY MARKETS: Texas freeze exacted worse toll than estimated on U.S. oil -- Monday, May 3, 2021 -- An Arctic cold blast that swept through the U.S. South in February caused a much bigger loss in oil supply than previously estimated, with output falling to a three-year low, according to U.S. government data.

Stanford scientists map local earthquake risks from Eagle Ford fracking -   Hydraulic fracturing to extract trapped fossil fuels can trigger earthquakes. Most are so small or far from homes and infrastructure that they may go unnoticed; others can rattle windows, sway light fixtures and jolt people from sleep; some have damaged buildings. Stanford University geophysicists have simulated and mapped the risk of noticeable shaking and possible building damage from earthquakes caused by hydraulic fracturing at all potential fracking sites across the Eagle Ford shale formation in Texas, which has hosted some of the largest fracking-triggered earthquakes in the United States. Published April 29 in Science, the results show the most densely populated areas – particularly a narrow section of the Eagle Ford nestled between San Antonio and Houston – face the greatest risk of experiencing shaking strong enough to damage buildings or be felt by people. “We found that risks from nuisance or damage varies greatly across space, depending mostly on population density,” said lead study author Ryan Schultz, a PhD student in geophysics at Stanford. Tens of thousands of wells drilled in the vast formation over the past decade helped to fuel the U.S. shale boom and contributed to a dramatic increase in earthquakes in the central and eastern U.S. starting around 2009. Although damaging earthquakes are rare, the authors write, “the perceived risks of hydraulic fracturing have both caused public concern and impeded industry development.”In sparsely populated areas within the southwestern portion of the Eagle Ford, the researchers found damage is unlikely even if fracking causes earthquakes as large as magnitude 5.0. Allowing such powerful quakes, however, could jeopardize the “social license to operate,” they write. The phrase, which emerged within the mining industry in the 1990s and has since been adopted by climate activists, refers to the unofficial acceptance by local community members and broader civil society that oil, gas and mining operations need to do business without costly conflicts.“Seismicity is part of the social license for hydraulic fracturing, but far from the only issue,” said study co-author Bill Ellsworth, a geophysics research professor at Stanford’s School of Earth, Energy & Environmental Sciences (Stanford Earth). “Eliminating hydraulic fracturing seismicity altogether wouldn’t change any of the other concerns.”Among those concerns are health threats from living near oil and gas wells and greenhouse gas emissions from fossil fuel production and use. California’s recent announcement of plans to stop issuing new permits for hydraulic fracturing by 2024, for example, comes as part of an effort to phase out oil extraction and reduce greenhouse gas emissions.

Montana, Kansas, and Arkansas enter the arms race to criminalize protests | Grist -- Jestin Dupree had driven more than 400 miles from the Fort Peck Indian Reservation in northeastern Montana to the state’s capital, Helena, to testify against legislation that could be used to jail environmental protesters. For years, his tribe had been protesting the Keystone XL pipeline, which was to cross the Missouri River, their main source of water. Montana’s new legislation, however, would allow environmental protesters to be jailed for up to 18 months if they obstruct operations at oil and gas facilities — and up to 30 years if they damage equipment. It seemed to be a direct rebuke to the Indigenous activism that had helped stop Keystone XL.The state lawmaker championing the bill, Representative Steve Gunderson, hadn’t consulted with the tribe despite the disproportionate impact it could have on tribal members, according to Dupree. Gunderson had also referenced the 2016 protests over the Dakota Access Pipeline in North Dakota while introducing the legislation, which just didn’t sit right with Dupree. Those protests were largely peaceful and only turned violent when private security hired by the pipeline companythreatened protesters with guard dogs — and when police used water bombs and tear gas on mostly Indigenous protesters in the middle of winter. Nevertheless, Gunderson, who did not respond to a request for comment, falsely accused protesters of “throwing homemade explosive pipe bombs.” “This is a blanket bill that they’re trying to shove down everybody’s throats,” Dupree told Grist. “It’s very unfair to have no consultation, and the fact that it was an issue with the Standing Rock tribe that brought this [bill] about — that the sponsor even mentioned that — was disgusting.”Once signed, Montana will become the fourth state this year to pass legislation that increases penalties for trespass on properties with so-called “critical infrastructure” — a long list of facilities including pipelines, refineries, and other oil and gas equipment. The bill punishes those who “materially impede or inhibit operations” of an oil and gas facility with up to 18 months in prison and a fine of $4,500. Those who cause damage to critical infrastructure that costs more than $1,500 could face a jail term of up to 30 years. Kansas and Arkansas passed similar laws earlier this month, and in January Ohio Governor Mike DeWine signed a bill that makes trespassing on oil and gas properties a misdemeanor punishable with up to six months in prison and a $1,000 fine.

Looming showdown as Michigan governor orders Canadian pipeline shut down - For Michigan’s governor, the 645-mile pipeline jeopardizes the Great Lakes. For Canada’s natural resources minister, its continued operation is “nonnegotiable.” The clash over Calgary-based Enbridge’s Line 5, which carries up to 540,000 barrels of crude oil and natural gas liquids across Michigan and under the Great Lakes each day, is placing stress on U.S.-Canada ties — and raising questions about how the close allies, which have expressed a desire to work together to fight climate change, can balance energy security with the transition to a clean-energy economy. In a move applauded by environmentalists and Indigenous groups on both sides of the border, Michigan Gov. Gretchen Whitmer (D) in November ordered the firm to shut down the nearly 70-year-old lines by May 12. Canadian officials, including Prime Minister Justin Trudeau, have appealed to their American counterparts, including President Biden, Secretary of State Antony Blinken and Energy Secretary Jennifer Granholm for help. Joe Comartin, Canada’s consul general in Detroit, said a shutdown would have “significant” impacts on both sides of the border. He predicted effects ranging from months-long propane shortages to higher costs for consumers to fuels being carried by rail, truck or boat — methods that he said are less emissions-friendly and more dangerous than a pipeline. “It certainly strains our relationship,” he said, “and we’ve had a very long history of working closely together.” One “irritant,” he said, is “the claim from the state that they are doing this to protect the Great Lakes, that they’re more interested in protecting the Great Lakes than we in Canada are. Basically, we reject that completely.” Line 5, built in 1953, is part of Enbridge’s mainline system, which carries fuel from Alberta’s oil sands to the Midwestern United States and Eastern Canada. Running from Superior, Wis., to Sarnia, Ontario, it is a key conduit for refineries in those regions, which make gas, propane and home-heating oils, as well as jet fuels for airports in Toronto and Detroit. For 4.5 miles under Michigan’s Straits of Mackinac, the waterway where Lake Huron meets Lake Michigan, Line 5 splits into dual pipelines.. Whitmer announced last fall that she was revoking the 1953 easement that allows the lines to cross the straits, citing the “unreasonable risk” that they pose to the Great Lakes and what she said were Enbridge’s “persistent” breaches of the easement’s terms. The announcement listed several infractions, including failures to ensure that the lines are supported every 75 feet and that they’re covered by a coating to prevent erosion. It noted two incidents, in 2018 and 2019, in which the pipelines were struck and damaged by cables or anchors from boats.

Michigan Wants to Close Oil Pipeline Under the Great Lakes. Canada Says No. - —Canada is fighting to stop U.S. officials from closing a vital cross-border oil and gas pipeline as a deadline to shut it looms. The dispute erupted in November, when Michigan Gov. Gretchen Whitmer announced she was revoking a permit that allows Enbridge Inc.’s Line 5 pipeline to run along the bottom of the Straits of Mackinac, between Lake Michigan and Lake Huron. She gave the company until May 12 to shut the pipeline. The 645-mile conduit carries more than a half million barrels of oil and natural gas liquids each day from Superior, Wis., to refineries in Michigan, Ohio, Pennsylvania, Ontario and Quebec. Canadian officials and Enbridge say closing the pipeline would choke off almost half of the supply used to make gasoline, jet fuel and home-heating oil for Ontario and Quebec, the most populous parts of the country. The closure could lead to higher fuel costs and thousands of job losses in the refineries that process the oil, officials say. Enbridge has sued Michigan in federal court to stop the revocation, arguing the state has no authority to do so, and said it won’t shut the pipeline down unless ordered by a court. Michigan cited “the unreasonable risk that continued operation of the dual pipelines poses to the Great Lakes,” in justifying the decision. The issue has become the biggest irritant between Canada and the U.S. since President Biden’s election. Canadian Prime Minister Justin Trudeau brought up Line 5 during a virtual summit in February with Mr. Biden, who in January had revoked a permit for Canadian operator TC Energy Corp.’s Keystone XL pipeline. The White House has given no sign that it is prepared to step into the middle of the dispute, but Canada has continued to press officials in the Biden administration. Canada’s Natural Resources Minister Seamus O’Regan, who spoke with U.S. Energy Secretary Jennifer Granholm about the situation, has said the Line 5 pipeline is “nonnegotiable.” The White House declined to comment. Canada’s U.S. ambassador, Kirsten Hillman, has met with Ms. Whitmer. She has also spoken to senior Biden administration officials about the stakes involved should Line 5 shut down, such as the future of refineries in Midwestern states and billions in lost annual output. “The regional consequences of shutting down Line 5 are profound,” she said. So far, the entreaties have had little effect. “These oil pipelines in the Straits of Mackinac are a ticking time bomb, and their continued presence violates the public trust and poses a grave threat to Michigan’s environment and economy. The governor fully stands behind her decision to revoke and terminate the 1953 easement, while securing Michigan’s energy needs,”

Michigan Governor Gretchen Whitmer is trying to shut down the biggest artery for Canadian oil exports to the U.S. — will she be successful? - At least on paper, Ontario, Quebec and parts of the U.S. Midwest are about to have a large portion of their oil supply cut off on May 13, less than two weeks from now. Last November, Gretchen Whitmer, the Democratic governor of Michigan, signed an executive order that requires Calgary-based Enbridge Inc. to shut down its Line 5 pipeline. The line carries Alberta and Saskatchewan oil and liquefied natural gas to refineries in Ontario, Ohio and Michigan. It is the biggest artery for Canadian oil exports to the U.S. Whitmer’s government believes the 68-year-old Line 5, which runs from Superior, Wisc., to Sarnia, Ont., via Michigan, poses an unacceptable risk of a “catastrophic” oil spill threatening the entire Great Lakes ecosystem. To be sure, the chances of Line 5 abruptly closing are slight. The governor’s order has been challenged by Enbridge in U.S. federal court. The court is unlikely to grant Whitmer’s request for an injunction shutting down Line 5. But that won’t resolve this dispute, which is poised to be fought over for years in the courts and before regulatory panels in the U.S. and Canada. Even in the midst of a pandemic, this imbroglio is commanding Canada’s full attention. Just over three weeks after losing one pipeline skirmish with America — U.S. President Joe Biden’s killing of the Keystone XL pipeline expansion on his first day in office, over Prime Minister Justin Trudeau’s objections — the Trudeau government is determined not to lose this pipeline fight. Trudeau has personally lobbied Biden to keep Line 5 open. And he has deployed his top cabinet officers and U.S. diplomats to do the same with their Biden administration counterparts, and with Whitmer, members of the U.S. Congress, and governors of other states that would be affected by a Line 5 closure. What makes this jousting unusual is that two sides are equally committed to one of the world’s most aggressive fights against climate crisis. And, in essence, what each side is trying to do is square a circle. What’s playing out in this dispute is the same quandary of economics vs. environment that characterizes the climate-crisis fight everywhere. Canada and the U.S. each still need the fossil-fuel energy carried by Line 5. Alternative energy sources are not yet sufficient to replace it. Line 5 is the largest conduit of Canadian oil to the U.S., a key to America’s energy self-sufficiency. And Canada, the world’s sixth-largest oil producer, exports about 80 per cent of its oil production to the U.S., its sole export customer. At the same time, though, Canada and the U.S. are trying with unprecedented urgency to reduce their carbon footprints. And among the most politically charged symbols of climate crisis are oil and gas pipelines. The focal point of this dispute is a dual-pipeline segment of Line 5 that stretches a mere six kilometres under the ecologically sensitive Straits of Mackinac, which connect Lake Michigan and Lake Huron. The straits have been described by environmentalists as one of the worst places on Earth to have built a pipeline that carries toxic material.

‘Irreparable consequences’: First Nations group slams Ottawa for protecting Line 5 pipeline -- The federal Liberal government is putting Canada’s oil and gas industry ahead of the Great Lakes by opposing Michigan’s efforts to shut down theLine 5 pipeline, says a prominent group of Ontario First Nations.The Anishinabek Nation said Thursday it is disappointed that Ottawa is pushing back against Michigan Gov. Gretchen Whitmer’s order that Enbridge Inc. stop operating the cross-border pipeline next week.The federal government is considering taking action under the 1977 Transit Pipelines Treaty with the United States that allows for the uninterrupted flow of energy between the two countries.And yet it is willing to ignore the treaties Canada has signed with the 39 First Nations in Ontario that are represented by Anishinabek, said Grand Council Chief Glen Hare.“It is upsetting to see that the government of Canada will pick and choose which treaties to uphold based on convenience and profit,” Hare said in a statement.“Should anything that’s being transported in these 67-year-old pipelines get into the Great Lakes, it would have devastating effects and irreparable consequences.” But so too would shutting down the pipeline, Liberal, New Democrat and Conservative MPs alike agreed Thursday during an emergency debate on what both the government and the official Opposition consider a potential economic and diplomatic crisis.

Possible shutdown of Line 5 not a threat to Canada's energy security: ambassador --Canada's ambassador to the United States says that while the potential shutdown of Line 5 is a serious issue, it's not a threat to Canada's national energy security. "It is not a threat to Canada's national economic or energy security," Kristen Hillman told CBC News Network's Power & Politics on Thursday."I think that it is an important dispute or disagreement that exists between Enbridge and the state of Michigan that needs to be taken very seriously. And we are taking it very seriously."Line 5, which runs through Michigan from the Wisconsin city of Superior to Sarnia, Ont., crosses the Great Lakes beneath the environmentally sensitive Straits of Mackinac, which link Lake Michigan to Lake Huron.The pipeline carries petroleum east from Western Canada. Once it hits Ontario, most of the crude oil is turned in to fuels that meet almost 50 per cent of the province's fuel demands. The remainder of the supply is sent on to Quebec refineries through Line 9, where it provides 40 to 50 per cent of that province's fuel supply. 

Long-unreported pipeline leak should be a wakeup call for Wisconsin -- The Enbridge Line 3 tar sands oil pipeline project in Minnesota is now 50% complete as those opposed to the pipeline attempt to stop it through legal actions, advocacy, protests, and prayers. The recent news from Fort Atkinson that Enbridge waited more than a year to alert Wisconsin officials that one of its  pipelines — Line 13, also called Southern Lights — had leaked over 1,200 gallons of a petroleum substance called diluent, should be a wakeup call to people who understand the value of clean water and recognize the dangers of taking it for granted.Enbridge uses diluent to thin crude oil, allowing it to flow through pipes that stretch from Western Canada  to the U.S. Gulf Coast, where the diluent is separated. Enbridge pipelines also pump diluent from the Gulf Coast and Midwest back to Western Canada — to help move more petroleum. Knowing the history of Enbridge pipeline failures and the fact that Enbridge kept Wisconsin in the dark about this one begs the question: should Wisconsin and every other state along the pipeline route trust that the water they drink is safe? A serious underground leak involving benzene, toluene, and trichloroethene seeping undetected into groundwater might be worse than a more visible failure.At a minimum, states should use independent testing services that report directly to them to look for leaks. Presently, 180,000 barrels of diluent per day move through the Southern Lights pipeline. If the new Line 3 pipeline is completed and the old Line 3 pipeline is abandoned, the volume of Line 3 crude oil  will more than double, requiring a corresponding increase in diluent, presumably through the Southern Lights pipeline.A better plan would be to stop the Line 3 project because of the high risk it poses to our health and the environment. Diluent leaks are just the tip of the iceberg. The project disregards Native American treaty rights and environmental concerns, including climate change. The pipeline crosses wetlands, streams, and rivers, including two crossings of the Mississippi. Line 3 would accommodate the equivalent of fifty coal-fired power plants of greenhouse gases into the atmosphere.  In Minnesota, the Public Utilities Commission approved the project, but the Department of Commerce is fighting it, arguing that the need for the project has not been established. Since the project was proposed and controversy began, renewable energy technologies have improved and capacity has expanded, technologies and strategies for storing energy to meet peak loads on power grids have matured, and the pandemic has reduced demand for oil.

Climate and Indigenous Protesters Across 4 Continents Pressure Banks to #DefundLine3 --  From fake oil spills in Washington, D.C. and New York City to a "people mural" in Seattle spelling out "Defund Line 3," climate and Indigenous protesters in 50 U.S. cities and across seven other countries spanning four continents took to the streets on Friday for a day of action pushing 20 banks to ditch the controversial tar sands pipeline."Against the backdrop of rising climate chaos, the continued bankrolling of Line 3 and similar oil and gas infrastructure worldwide is fueling gross and systemic violations of human rights and Indigenous peoples' rights at a global scale," said Carroll Muffett, president of the Center for International Environmental Law."It's time for the big banks to recognize that they can and will be held accountable for their complicity in those violations," Muffett added. His organization is part of the Stop the Money Pipeline coalition, more than 150 groups that urge asset managers, banks, and insurers to stop funding climate destruction. The global protests on Friday follow on-the-ground actions that have, at times, successfully halted construction of Canada-based Enbridge's Line 3 project, which is intended to replace an old pipeline that runs from Alberta, through North Dakota and Minnesota, to Wisconsin. The new pipeline's route crossesAnishinaabe treaty lands.Simone Senogles, a Red Lake Anishinaabe citizen and organizer for Indigenous Environmental Network, declared that "no amount of greenwashing and PR can absolve these banks from violating Indigenous rights and the desolation of Mother Earth.""By giving credit lines to Enbridge, these institutions are giving the oil company a blank check to attack Anishinaabe people, steal our lands, and further guide this planet into climate chaos," Senogles said. "Those who financially back Enbridge are directly implicated in its crimes. To put it bluntly, blood is on their hands."The Stop the Money Pipeline coalition launched the #DefundLine3 campaign in February.  Appearing on Democracy Now! Friday, Jackie Fielder of Stop the Money Pipeline noted that "Line 3 would result in an additional 193 million tons of greenhouse gases every single year, and it violates Indigenous rights of the Anishinaabe people and their right to free, prior, and informed consent."

PIPELINES: Lawsuit targets Army Corps permitting program -- Monday, May 3, 2021 -- Environmental groups today sued the Army Corps of Engineers over its streamlined permitting program for authorizing pipelines to cross through rivers, streams and wetlands.

Army Corps sees no cause to shut Dakota pipeline during review -filing (Reuters) - The U.S. Army Corps of Engineers said it does not believe a judge should order the Dakota Access oil pipeline shut while environmental review continues, according to court filings on Monday. The Dakota Access Pipeline (DAPL), which came into service in 2017, has been the subject of a lengthy court battle between Native American tribes seeking its closure and the pipeline operators, led by Energy Transfer. The Corps' position is consistent with statements it made before the court last year. A U.S. district judge for the District of Columbia threw out a permit last year for DAPL to cross under the Dakotas' Lake Oahe, a drinking-water source for Native American tribes, and ordered a review of the pipeline. The Army Corps said on Monday that it expected to complete an environmental review of the 570,000-barrel-per-day DAPL out of North Dakota by March 2022, when it will consider whether to issue a new permit for the line. That judge is now considering whether to grant a request by Native tribes to require that the line cease flows and be emptied while the assessment is carried out. The Corps, under the direction of President Joe Biden, said at a hearing last month it had no immediate plans to force a DAPL closure. "The Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing," it said in Monday's filing. DAPL's operators intend to seek U.S. Supreme Court review in the case, according to a filing last week.

Environmental groups sue Army Corps of Engineers over pipeline permitting --A coalition of five environmental groups on Monday sued the U.S. Army Corps of Engineers, saying the corps did not properly analyze environmental impacts when issuing a broad pipeline permit.The plaintiffs, which include the Center for Biological Diversity, Sierra Club, Friends of the Earth, Waterkeeper Alliance and Montana Environmental Information Center, filed the lawsuit in federal court in Montana.The permit at issue, Permit 12, is a so-called nationwide permit that streamlines the pipeline permitting process. The corps estimates its 2021 version will be used more than 40,000 times over the next five years.In the lawsuit, the plaintiffs argue that although national permits are intended for activities with negligible environmental impacts, the projected uses of Permit 12 will affect more than 3,000 acres of U.S. waters and threaten endangered species. It would also allow major pipelines to begin construction under the nationwide permitting process instead of undergoing stricter regulatory scrutiny.The lawsuit further argues that the permit violates the Clean Water Act and the National Environmental Policy ActWhile the Biden administration has called for a review of nationwide permits, it has also allowed the 2021 version of Permit 12, reissued in the final days of the Trump administration, to take effect, according to the lawsuit.“The Corps’ failure to comply with bedrock environmental laws requires immediate attention,” Jared Margolis, a senior attorney at the Center for Biological Diversity, said in a statement. “There’s simply no justification for allowing destructive and dangerous pipelines to avoid rigorous environmental review, and it’s disheartening to see the Corps continue to flaunt its obligation to protect our nation’s waters and imperiled wildlife.”“Nationwide Permit 12 is a tool for corporate polluters to fast-track climate-destroying oil and gas pipelines and exempt them from critical environmental reviews and consultations,” added Sierra Club senior attorney Doug Hayes. “While the Biden administration has promised a review of the Corps’ program, it has allowed this new permit to take effect in the meantime, a delay which is detrimental to wildlife, waterways and our climate. There’s no time to waste in eliminating this process, which only serves to bolster the oil and gas industry’s bottom lines.” A federal court ruled in a separate lawsuit that the permit’s 2017 iteration was a violation of the Endangered Species Act. In July 2020, the Supreme Court reinstated it, but declined to renew it specifically for the Keystone XL pipeline.

Corps: Dakota Access oil pipeline to stay open during review  (AP) — The Biden administration on Monday reiterated that the Dakota Access oil pipeline should continue to operate while the U.S. Army Corps of Engineers conducts an extensive environmental review, although the Corps said again that it could change its mind.The Standing Rock Sioux and other tribes have filed for an injunction asking U.S. District Judge James Boasberg to shut down the pipeline while the Corps conducts a second review, expected to be completed by March 2022. The tribes and environmental groups, encouraged by some of Biden’s moves on climate change and fossil fuels, were hoping he would step in and shut down the pipeline north of the reservation that straddles the Dakotas border.Instead, the Corps in an update ordered by the judge repeated its stance from last month’s hearing that the shutdown issue remains in Boasberg’s lap.“It is possible that in the EIS process the Corps would find new information,” the document stated, referring to the environmental impact statement, “but to date the Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing.” Earthjustice attorney Jan Hasselman, who represents Standing Rock, reacted by citing Biden’s discussion with world leaders on addressing climate change and the president’s promise to be more sensitive to concerns by Indigenous leaders and tribal governments.“Given all this, it’s baffling that when it comes to the Dakota Access pipeline, Biden’s Army Corps is standing in the way of justice for Standing Rock by opposing a court order to shut down this infrastructure while environmental and safety consequences are fully evaluated,” Hasselman said.  Attorneys for the pipeline’s Texas-based owner, Energy Transfer, have argued that shuttering the pipeline would be devastating financially to several entities, including North Dakota, and the Mandan, Hidatsa and Arikara Nation tribe. Standing Rock said preventing those economic losses should not come at the expense of other tribes, especially when Boasberg’s decision to strip the project of a key federal permit has been supported by the D.C. Circuit Court of Appeals.Standing Rock, which draws its water from the Missouri River, says it fears pollution. The company says the pipeline is safe. Boasberg ordered further environmental study after determining the Corps had not adequately considered how an oil spill under the Missouri River might affect Standing Rock’s fishing and hunting rights, among other things. A federal panel later upheld the judge’s ruling, but did not go as far as shutting down the pipeline.

Biden Administration Lets DAPL Oil Continue to Flow Without Permit -  The Biden administration told a federal judge on Monday that the Dakota Access Pipeline should be allowed to continue pumping oil despite lacking a key federal permit. The Army Corps of Engineers, which is conducting another extensive environmental review, said it could change its mind. Early last month, the Army Corps surprised Judge James Boasberg, and outraged lawyers representing the Standing Rock Sioux, when it said it wasn't sure if the oil pipeline should be shut down."It's baffling," Earthjustice attorney Jan Hasselman said in a statement. "When it comes to the Dakota Access Pipeline, Biden's Army Corps is standing in the way of justice for Standing Rock by opposing a court order to shut down this infrastructure while environmental and safety consequences are fully evaluated."

ENVIRONMENTAL JUSTICE: Dakota Access decision snarls Biden's equity progress -- Wednesday, May 5, 2021 --President Biden's vows to overhaul the Army's long-standing strained relationship with Native American tribes hit a snag this week when his administration backed continued operation of the controversial Dakota Access pipeline.

PIPELINES: Biden admin asks court to drop Keystone XL lawsuit -- Thursday, May 6, 2021 -- The Biden administration this week asked a federal appeals court to close out a dispute over a key permit for the now-suspended Keystone XL pipeline.

TC Energy posts C$1 bln quarterly loss on Keystone XL suspension -Canadian pipeline operator TC Energy on Friday swung to a loss in the first quarter, hit by C$2.2 billion ($1.81 billion) impairment charges related to the suspension of its Keystone XL pipeline project. TC Energy posts C$1 billion quarterly loss on Keystone XL suspension- oil and gas 360 Source: Reuters The pipeline was planned to carry 830,000 barrels per day of heavy crude from Canada’s Alberta province to Nebraska in the United States. The company said the charge was related to halting work on the Keystone XL pipeline and a reassessment of related projects like the Heartland Pipeline, after U.S. President Joe Biden revoked a key permit for the project in January. TC Energy, whose new Chief Executive Francois Poirier took the helm in January, owns the largest network of natural gas pipelines in North America as well as the existing Keystone oil pipeline and power and storage assets. The company posted a C$2.51 billion loss from its oil pipelines, of which Keystone is the biggest contributor, compared with a C$411 million profit in the same period last year. It reported net loss attributable to shareholders of C$1.1 billion, or C$1.11 per share, in the three months ended March 31 compared with a profit of C$1.1 billion a year earlier.

PIPELINES: Developer to decide Keystone XL's fate next month -- Friday, May 7, 2021 --  Developers of the Keystone XL pipeline have not yet given up on the crude oil project, even after President Biden threw out a permit for the conduit to cross the U.S.-Canada border earlier this year.

EPA hits troubled Virgin Islands oil refinery with a violation notice - A giant oil and gas refinery was served with a “notice of violation” by the Environmental Protection Agency following two major accidents that released noxious fumes and a chemical-filled vapor cloud over nearby neighborhoods in the U.S. Virgin Islands.The EPA said Monday that Limetree Bay Refining was served with the notice because the company failed to operate five monitoring stations to gauge the air quality around its plant, a major source of harmful greenhouse gas emissions. The company also failed to operate a meteorological tower.“A major source of air pollution, such as Limetree Bay, is subject to controls under its air permits,” the agency said in a statement. “Limetree Bay may be liable for civil penalties and required to take actions to correct the violations.”The company has 30 days to request a video conference to discuss or contest the notice of violation.In a statement Monday, the firm contested EPA’s allegations.“We strongly disagree with the claim that we are in violation of any ambient air monitoring requirement," it said. "The former refinery operator was required to perform area monitoring, but that requirement was linked exclusively to their burning of sulfur-containing residual fuel oil, which Limetree Bay does not do.”The plant’s previous owner, Hovensa, stopped operating five sulfur dioxide monitoring stations when it shut down in 2012 in the wake of financial problems and a multimillion-dollar settlement with EPA over environmental violations. At the time, according to the notice, Hovensa pledged to reactivate the monitors if it restarted.A Limetree employee informed the EPA on Feb. 16 — more than two weeks after the plant started running again — that it was not operating the air monitors, the notice added.Short-term exposures to high levels of sulfur dioxide can damage the human respiratory system. People with asthma, especially children, are vulnerable.“EPA issued this notice of violation to protect the people who live near and work at this refinery, and we have also deployed a team of experts to St. Croix and are working to assess Limetree Bay’s compliance with environmental laws,”

Oil spillage tackled at marina to protect wildlife --ENVIRONMENT officials have tackled an oil spillage in a marina in East Yorkshire.The Environment Agency tweeted that its field team went to the marina in Goole this morning to help to clear up some oil that had leaked into the water. It said pads and bunds were used to contain and soak up the oil and prevent any damage to wildlife in nearby rivers.

Norway regulator to investigate Equinor oil spill {Reuters} – The Norwegian Petroleum Safety Authority is investigating an oil spill incident at the Gullfaks C platform in the North Sea early last week. The discharge to the sea is thought to be connected to start-up of production from the Tordis field, a tieback to the platform. Operator Equinor estimates the size of the spill at 17.5 cu m (618 cu ft) of oil.

Oil spill: Rivers communities demand N800bn compensation The people of Nvakaohia- Rumuekpe in Emohua Local Government Area of Rivers State have demanded N800 billion compensation as damages from Total E&P Nigeria Limited over oil spill that occurred in their area. They made the demand at a joint press briefing between the Integrity Friends for Truth and Peace Initiative (TIFPI), chiefs, Community Development Committees (CDCs) and stakeholders of the affected area. Executive Director, TIFPI and Convener, Ikwerre People’s Congress (IPC), Livingstone Wechie, who read their address, said the multi-national oil company should carry out remediation on the polluted Nvakaohia- Rumuekpe made up Ovelle, Imogu and Ekwutche communities in Emohua LGA, Rivers. Wechie alleged that the firm had operated in the three communities for over six decades and dozens of natives had lost their lives in the last 10 years, as a result of environmental pollution. “That Total E&P Nigeria Ltd should pay N800 billion as compensation of Nvakaohia-Rumuekpe communities for the destruction on the various tortuous acts and injustices.There should be immediate supply of potable water to save life in Nvakaohia-Rumuekpe, building of hospitals, medical intervention, relief materials, construction of IDP camps to accommodate and return the people back from their current refugee status to avert the complete extinction of Nvakaohia clan in Rivers State. “That a joint Environmental Impact Assessment (EIA) be immediately conducted in Nvakaoha-Rumuekpe between Total E&P Nigeria Ltd and Nvakaoha-Rumuekpe community and to ensure that remediation, cleanup and adequate compensation etc should be paid to Nvakaoha-Rumuekpe for the damages and degradation caused in the communities on account of years of oil spill.

NOC takes action to control Tobruk oil spill, AGOC denies responsibility Tobruk Mayor Faraj Boual Khattabia formed a committee to address the issue of the oil spill in Tobruk, which presented its first plans this week to avoid the diesel from spreading into the sea, the first step was to erect a barrier around it. In a press conference, Boual Khattabia also expressed concern about diesel spreading into the city’s desalination plant. He demanded that the National Oil Corporation (NOC) and the Ministry of Water investigate the oil spill, which he said is endangering the health of all Tobruk residents. Boual Khattabia also emphasized the need for a clarification from the Arabian Gulf Oil Company and the Brega Petroleum Marketing Company about the oil leak at the city’s desalination plant, which contaminated the water. The head of the NOC’s health and safety division attended the meeting in Tobruk. Involved in the process is a working team from the oil firms Arabian Gulf Oil Co. (AGOC) and Brega Petroleum Marketing Co. (BPMC). The companies have all sent their spill response teams to deal with the situation. They intend to collect the diesel and clean up the area in order to protect the environment and maintain water quality. The Arabian Gulf Oil Company on their end has denied all blame for the fuel oil spill, which has reached the Corniche of Tobruk. The company said in a statement that reports that the AGOC caused the spill were false and that the chairman of the company’s management committee, Fadlallah Ahtiati, who was tasked with investigating the situation in all respects, stated that the company was not responsible for the spill.

Work to remove oil from stricken tanker off China nearly finished (Reuters) - Efforts to remove the cargo of an oil tanker that leaked oil into the Yellow Sea near China's Qingdao after a collision last week should be completed later on Tuesday, the vessel's manager said. The A Symphony was anchored roughly 40 nautical miles off the coast of Qingdao when it was struck in dense fog by the bulk carrier Sea Justice on April 27. The collision ruptured A Symphony's cargo and ballast tanks, causing it to leak roughly 400 tonnes of its bitumen mix cargo. A Symphony's manager, Goodwood Ship Management, said there were no injuries to the crew, and clean-up operations commenced as soon as weather conditions improved enough to allow specialist cleaning and repair vessels to travel to the site. (Graphic: Other ships steer clear of ‘A Symphony’ as oil spill clean-up continues off Qingdao, China - Work to unload the tanker's cargo, known as lightering, has continued since Friday, Goodwood said in a statement, and when complete the vessel will depart for further assessment and repairs. The company has yet to confirm which shipyard will handle the repairs. (Graphic: Bulk carrier collides with oil tanker at Qingdao Bulk carrier collides with oil tanker at Qingdao - The 272 metre-long, 46 metre-wide oil tanker was sold in May 2019 to its new owners Symphony Shipholding SA and NGM Energy, Equasis data showed.

Cargo removed from stricken tanker off China, preparing for voyage to repair yard (Reuters) - Cargo onboard a tanker that leaked oil off China has been removed and preparations are underway so the vessel can sail to a Chinese repair yard, the ship’s manager said on Wednesday. The A Symphony was anchored roughly 40 nautical miles (74 km) off the coast of Qingdao when it collided with the bulk carrier Sea Justice in dense fog on April 27. The collision ruptured A Symphony’s cargo and ballast tanks, causing it to leak roughly 400 tonnes of its bitumen mix cargo. Work has taken place in recent days to unload the tanker’s cargo, known as lightering. The vessel’s manager, Goodwood Ship Management, said in an email that the cargo transfer had been completed and the ship was undergoing tank cleaning operations, which were expected to be completed in the next 72 hours. The vessel will then proceed to China’s CUD Weihai shipyard for repairs, Goodwood said. The yard is located along the Yellow Sea.

Oil Prices Slip As India's Surging Cases Dampen Demand Hopes | Al Bawaba --Oil was down Monday morning in Asia as ever-surging COVID-19 cases in countries such as India dampen fuel demand hopes. Brent oil futures edged down 0.18% to $66.64 by 11:06 PM ET (3:06 AM GMT) and WTI futures edged down 0.13% to $63.50. India, the third-largest oil importer globally, continues to fight its second wave of COVID-19 cases. The daily number of COVID-19 cases passed the 400,000-mark on May 1, before inching back down to 392,488 the next day, according to the country’s Ministry of Health and Family Welfare. The record numbers led the Confederation of Indian Industry to urge authorities to curtail economic activity. However, losses were capped as fuel demand is expected to rebound in countries such as China in the second half of 2021. Accelerating COVID-19 vaccination rates are expected to raise global fuel demand, especially during the upcoming peak summer travel season. "Strong demand in regions such as North America, Europe and China has brightened the overall outlook," ANZ analysts said in a note. On the supply front, the Organization of the Petroleum Exporting Countries produced 25.17 million barrels per day in April, up 100,000 barrels from March. In the U.S., energy firms added oil and natural gas rigs to a ninth consecutive monthly rig count increase during the previous week as prices recovered, said Baker Hughes. U.S. crude oil production, however, fell by over a million barrels per day in February to the lowest levels since Oct. 2017, according to Friday’s monthly government report. Meanwhile, the U.S. and Iran are discussing reviving a nuclear deal, which could help life U.S. sanctions and allow Iran to bolster its oil exports.

Oil prices rise amid demand hopes -   (Xinhua) -- Oil prices advanced on Monday as hopes for demand recovery outweighed worries about surging COVID-19 infections in India. The West Texas Intermediate for June delivery added 91 cents to settle at 64.49 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery increased 80 cents to close at 67.56 dollars a barrel on the London ICE Futures Exchange. Oil prices also garnered some support from a weaker U.S. dollar. The dollar index, which measures the greenback against six major peers, slid 0.37 percent to 90.9487 in late trading on Monday. Historically, the price of oil is inversely related to the price of the U.S. dollar. 

Oil up a second day on bets for higher demand as U.S., Europe ease COVID restrictions -Oil futures post a gain for a second session on Tuesday, finding support as traders bet that easing COVID-19 restrictions in the U.S. and Europe will lead to higher fuel demand as the market approaches the summer travel season."From here on out the thing to watch will be air travel," said James Williams, energy economist at WTRG Economics. "Domestic and international air travel will continue to improve despite the difficulties in India," he said. Given the "lifting of so many restrictions in the U.S. and the pent up demand for vacations, we should see a strong uptick in U.S. gasoline consumption this summer."West Texas Intermediate crude for June delivery rose $1.20, or 1.9%, to settle at $65.69 a barrel on the New York Mercantile Exchange. July Brent crude , the global benchmark, added $1.32, or almost 2%, at $68.88 a barrel on ICE Futures Europe. Both contracts settled at their highest since March, according to Dow Jones market Data.In the U.S., demand is surging, and combined with plans to ease U.K. restrictions on air travel, those developments are "offsetting concerns about demand destruction in India and the worries about the return of supply from Iran," said Phil Flynn, senior market analyst at The Price Futures Group.The European Commission on Monday proposed welcoming fully COVID-19-vaccinated travelers and tourists from countries with "a good epidemiological situation." European airline shares jumped (link). In the U.S., several states began lifting or announced plans to lift or ease lockdown restrictions (link). The average number of new cases in the U.S. fell below 50,000 a day for the first time since October (link). Nearly 1.67 million people were screened at U.S. airport checkpoints on Sunday, according to the Transportation Security Administration, the highest number since mid-March of last year."Europe's plans to curb travel restrictions is music to the ears of oil bulls. When added to Fed Chair Powell's comments that the U.S. economic recovery is making real progress, this is supportive of higher oil prices," said Sophie Griffiths, market analyst at Oanda, in a note.The improving picture in the U.S. and Europe stands in contrast to India, the world's third-largest oil importer, where a deadly surge in COVID cases has yet to let up. Indian hospitals remain overwhelmed by cases and lacking in supplies including oxygen.See: (link)India's COVID-19 crisis is a 'crime against humanity,' says prizewinning author as nation sets new case record (link)Indian Prime Minister Narendra Modi, meanwhile, is "vowing to not shut down the Indian economy despite a lot of outside pressure to do so," Flynn said in a Tuesday note.But WTRG's Williams thinks the market is "underestimating India's negative impact on demand."Meanwhile, data from Bloomberg revealed that the Organization of the Petroleum Exporting Countries kept oil production mostly steady in April ahead of output increases that kicked in this month. OPEC pumped an average of 25.27 million barrels a day in April, roughly 50,000 barrels a day less than in March, according to the Bloomberg survey (link).

Oil gains nearly 2% as demand optimism continues to counteract India's covid case surge --Oil prices rose on Tuesday after more U.S. states eased lockdowns and the European Union sought to attract travellers, though soaring COVID-19 cases in India capped gains. Brent crude futures were up $1.01, or 1.48%, at $68.50 a barrel after climbing by 1.2% on Monday. U.S. West Texas Intermediate (WTI) crude futures settled $1.20, or 1.86%, higher at $65.69 per barrel, after a 1.4% jump on Monday. Both contracts were up about 2% in earlier trade. "Markets were optimistic coming into the day, boosted by flight movement between U.S. and Europe," said Phil Flynn, senior analyst at Price Futures Group in Chicago. Demand for diesel fuel, including jet, has suffered during the pandemic, weighing down global oil markets. Prices are being supported by the prospect of a pick-up in fuel demand as New York state, New Jersey and Connecticut look to ease pandemic curbs and the EU plans to open up to foreign visitors who have been vaccinated, analysts said. "The current strength is led by U.S. gasoline, where demand is seen as healthy as more motorists take to the roads," said PVM Oil Associates analyst Tamas Varga. "Yesterday's stock market strength is being followed through this morning in the oil market ... the market focuses on the successful rollout of vaccine programmes in the U.S. and in other developed countries and not on the devastation in India and Brazil." For further signs of rising U.S. oil demand, traders will be watching for reports on crude and product stockpiles from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday. Five analysts polled by Reuters estimated on average that U.S. crude inventories fell by 2.2 million barrels in the week to April 30. Oil inventories rose in the previous two weeks. The rate of refinery utilisation was expected to have increased by 0.5 percentage point last week, from 85.4% of total capacity in the week ended April 23, the poll showed. A weaker dollar, hit by an unexpected slowdown in U.S. manufacturing growth, also helped to shore up oil prices on Tuesday. The lower dollar makes oil more attractive to buyers holding other currencies. In India, the total number of infections surpassed 20 million after the country again registered more than 300,000 new cases, which is expected to hit fuel demand in the world's second-most populous country. "Strong demand forecasts for the second part of 2021 are providing a bullish seat for traders to drive rallies, not allowing any strong negative price reaction to drag for long, even at times of crisis, such as the recent one in India," said Rystad Energy analyst Louise Dickson. "In fact, looking at balances going forward, prices will likely climb again to about $70 per barrel in the coming months, unless we see another policy change by OPEC+."

WTI Extends Gains After Biggest Crude Draw Since January  -A stronger dollar and a hawkish Yellen were not enough to slow oil's rebound as more US states eased lockdowns and the European Union sought to attract more travellers, which would help offset weakened fuel demand in India as COVID-19 cases soar.“Gasoline inventories in the U.S. are well below where they were a year ago and we’ve taken out refinery capacity,” said Peter McNally, global head for industrials, materials and energy at Third Bridge.We’ve seen the impact on demand as more people get vaccinated, so we’re going to get that tailwind plus seasonality coming later this month.”While OPEC kept its crude production steady in April, ahead of a planned output hike this month, all eyes will be on signs of demand picking up in US crude stocks. API

  • Crude -7.688mm
  • Cushing +548k
  • Gasoline -5.308mm
  • Distillates -3.453mm

The last few weeks have seen very modest changes in crude stocks and analysts expected inventories to have fallen last week, and it did in a big way. Crude stocks fell 7.688mm barrels - the biggest weekly draw since January

Oil Up Over Huge Draw in U.S. Crude Supplies, Fuel Demand Hopes - – Oil was up Wednesday morning in Asia over a record fall in U.S. crude supplies and growing expectations that re-opening drives in the U.S. and Europe will boost fuel demand. However, investors are also keeping an eye on ever-surging numbers of COVID-19 cases in parts of Asia.Brent oil futures rose 2.68% to $69.37 by 12:24M ET (4:24 AM GMT), closing in on the $70 mark. WTI futures jumped 2.64% to $66.19.U.S. crude oil supply data from the American Petroleum Institute showed a draw of 7.688 million barrels for the week ended Apr. 30, in what is set to be the largest drop since late January 2021. The draw exceeded the 2.191-million-barrel draw in forecasts prepared by and the 4.319-million-barrel build recorded during the previous week.Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.U.S. President Joe Biden said on Tuesday that the U.S. aims to vaccinate 70% of U.S. adults with at least one COVID-19 shot by the Independence Day holiday on Jul. 4. In the U.K., Prime Minister Boris Johnson said the country is set to lift lockdown rules in seven weeks.Investors are betting that the accelerating COVID-19 vaccination rate will help oil prices return to pre-COVID-19 conditions in key markets. The European Union plans to ease curbs for the upcoming peak summer travel season, while states around the New York region in the U.S. will lift most of the COVID-19 capacity restrictions on businesses. G20, a group of the world’s top 20 major economies, plans to introduce so-called vaccine passports to boost travel and tourism. However, India, the third-largest oil importer globally, topped 20.2 million COVID-19 cases by May 5, according to Johns Hopkins University data. Elsewhere in Asia, countries including Singapore, Vietnam and Seychelles, have recently reported increasing numbers of COVID-19 cases.

WTI Holds Gains Above $66 After Big Crude Draw --Oil prices are up for a third straight day this morning as the easing of lockdowns in the US and parts of Europe prompted hopes of an increase in fuel demand over the summer months and offset concerns about rising COVID-19 infections in India and Japan."A return to $70 oil is edging closer to becoming reality," said Stephen Brennock of oil broker PVM."The jump in oil prices came amid expectations of strong demand as Western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high," he said.Last night's surprisingly large crude draw (reported by API) also helped support prices and traders will be looking at the official data to confirm the trend. DOE

  • Crude -7.99mm
  • Cushing +254k
  • Gasoline +737k
  • Distillates -2.896mm

Official DOE data confirmed API's big crude draw but the major product draws were not as gasoline stocks rose unexpectedly and distillates stocks fell but less than API...Distillates stocks fell to their lowest since April 2020 and crude inventories fell to 10-week lows...

U.S. oil prices finish lower as traders reconsider demand prospects  - EIA reports a weekly 8 million-barrel drop in U.S. crude supplies. U.S. oil futures on Wednesday ended lower but the global benchmark prices finished slightly higher in a mixed day of trading for oil contracts.Traders reconsidered the outlook for oil demand, despite U.S. data showing the biggest weekly drop in domestic crude supplies since January..West Texas Intermediate crude for June delivery , the U.S. benchmark, fell 6 cents, or nearly 0.1%, to settle at $65.63 a barrel on the New York Mercantile Exchange. Prices traded as high as $66.76, the highest front-month intraday level since March, FactSet data show.July Brent , meanwhile, added 8 cents, or 0.1%, at $68.96 a barrel on ICE Futures Europe, following a climb to as high as $69.95.Oil prices saw gains early Wednesday on expectations that an economic recovery in the U.S. and Europe would lead to higher demand for oil. A U.S. government report also revealed a hefty weekly decline in U.S. crude inventories, but WTI prices turned lower ahead of the trading settlements.Several U.S. states have scrapped or plan to ease lockdown restrictions in coming weeks as COVID infection rates decline. Improved vaccine rollouts and easing restrictions on travel have also contributed to optimism over European fuel demand.Still, India's hospitals remain overwhelmed by cases (link), exacerbated by a dearth of public-health resources, including oxygen.The "virus is a big wildcard" as India is going to take some time to recover, said Tariq Zahir, managing member at Tyche Capital Advisors. Also, the members of Organization of the Petroleum Exporting Countries are starting to add oil to the market, which could "take some steam out of the energy markets in the months ahead."On Wednesday, the Energy Information Administration reported that U.S. crude inventories fell (link) by 8 million barrels for the week ended April 30. That was the biggest weekly decline since January. On average, analysts polled by S&P Global Platts forecast a decline of 3.9 million barrels for crude stocks, while the American Petroleum Institute on Tuesday (link) reported a 7.7 million-barrel drop.Meanwhile, the data from the EIA Wednesday also showed crude stocks at the Cushing, Okla., storage hub rose by 200,000 barrels for the week. Gasoline supply inched higher by 700,000 barrels, while distillate stockpiles declined by 2.9 million barrels for the week, according to the EIA report. The S&P Global Platts survey had expected weekly supply declines of 500,000 barrels for gasoline and 1.6 million barrels for distillates.

Saudi set to cut oil prices to Asia for first time this year - Saudi Arabia is likely to reduce the price of its crude oil for Asia in June in what will be the Kingdom’s first price cut this year amid signs of declining demand in India and weakening Dubai benchmark, according to a Reuters survey of Asian refiners.Saudi Arabia, the world’s largest oil exporter, is expected to cut its official selling price (OSP) for the flagship Arab Light grade for Asia in June by an average of $0.28 per barrel, according to sources at Asian refiners Reuters has polled.The expected price cut, if it materializes, would be the first time Saudi Arabia has reduced prices to Asia in 2021. The last time the Saudis lowered the price of crude to their most important market was in December 2020.Uncertainty over demand in the world’s third-largest oil importer, India, as well as the weakest price structure at the Middle Eastern Dubai benchmark in nearly two months, are expected to be the key reasons for a reduction in the Saudi oil prices, according to the Reuters survey.Sales of gasoline in India were the weakest in April since August 2020, officials with knowledge of preliminary data told Bloomberg. Average daily sales of diesel, the most used fuel in the country, slumped in April to the lowest level since last October, according to the preliminary estimates.India’s demand for diesel, gasoline, and jet fuel is expected to further decline in the coming days and probably weeks, with no sign that the second COVID wave in the country would peak within days.In addition, last week, the Dubai benchmark flipped to a slight contango, signaling not-so-tight market. Middle Eastern oil exporters, including Saudi Arabia, price their oil going to Asia off the Oman/Dubai average.

Oil Drops, Factoring in Saudi Price Cut Amid India Covid Carnage - - Oil prices fell more than 1% Thursday, clearly breaking from the rally earlier in the week, as Saudi Arabia’s cut in the selling price of its crude and India’s raging Covid situation offset bullish sentiments over the rebounding U.S. economy and its demand for energy. The Saudi price cut was reported on Wednesday and while it did not immediately impact the market, it filled the void in the latest session where the pandemic in India, the world’s third largest crude buyer, remained the news. Under the cut, the June official selling price for the flagship Arab light crude was dropped by 10 cents from May to $1.70 a barrel, sources said. India has reported more than 300,000 new cases daily in the last two weeks, and overtook Brazil in April to become the second-worst infected country in the world. Cumulatively, coronavirus infections in India reached around 20.67 million with more than 226,000 deaths, according to health ministry data on Wednesday. Several studies of India’s data, however, found that cases were likely severely underreported. “It did not help that Saudi Arabia cut the selling price of oil to India because of Covid demand destruction, reminding traders that risk is still out there,” said Phil Flynn, analyst at Chicago’s Price Futures Group brokerage. New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled down 92 cents, or 1.4%, at $64.71 per barrel. WTI hit an eight-week high of $66.75 on Wednesday, before snapping a four-day rally. London-traded Brent, the global benchmark for crude, closed down 90 cents, or 1.3%, at $68.09. Brent hit an eight-week high of $69.94 in the previous session. Oil rallied earlier in the week on optimism over the U.S. recovery from Covid and data showing a record surge in crude exports from the country and sharply lower domestic petroleum inventories. U.S. crude exports hit a record high of 4.1 million barrels per day, in a breakout above the previous week’s 2.5 million bpd, the Energy Information Administration said in its weekly petroleum supply-demand dataset released Wednesday. Crude imports, meanwhile, fell 1.2 million bpd to reach 5.5 million bpd last week. The combination of these led to a near 8 million-barrel drawdown in crude inventories, the EIA said, compared with analysts' expectations for a draw of 2.3 million barrels.

Oil Prices Decline Amid Uneven Recovery Signs  -- Oil declined as the coronavirus crisis in India and a slowing demand rebound in the U.S. highlighted the uneven nature of the global recovery. Futures in New York fell 1.4% Thursday after hitting a nearly two-month high earlier in the week. While signs of rising oil consumption have put prices on track for a weekly gain, spiking Covid-19 cases in major crude importer India is capping gains. At the same time, U.S. gasoline consumption slipped for a second straight week. “What’s keeping the market from going higher are these Covid-19 issues in several countries along with not quite enough of a demand rebound here in the U.S. to juice prices toward that $70-a-barrel mark,” said John Kilduff, founding partner at Again Capital LLC. Despite near-term concerns, oil has rallied more than 30% this year as key economies including the U.S. and China rebound from the depths of the pandemic. Spain’s Cepsa is restarting a processing unit that was previously idled, while U.S. refineries are running at five-year average levels for the first time since the pandemic began. The strength in crude has helped drive the Bloomberg Commodity Spot Index to the highest level in almost a decade. West Texas Intermediate crude for June delivery fell 92 cents to $64.71 a barrel in New York. Brent for July settlement slid 87 cents to $68.09 a barrel. The promise of a summer travel boost is also keeping prices supported, said Bob Yawger, head of the futures division at Mizuho Securities. “With Memorial Day weekend so close here, the gasoline demand scenario is just too strong to see crude oil fall apart.” Elsewhere, Japan plans to extend a state of emergency brought on by Covid until the end of the month, local media reported. The country’s capital, Tokyo, had wanted to extend it in a bid to stem a surge in infections ahead of hosting the Olympics from July.

Global oil prices edge up as investors eye fuel demand recovery - (Reuters) - Oil prices edged up in early Asian trade after a 1% dip in the previous session, as global economic recovery and easing travel curbs in the United States and Europe buoyed the fuel demand outlook while the surging pandemic in India capped prices. Brent crude futures for July were at $68.17 a barrel by 0052 GMT, up 8 cents, while U.S. West Texas Intermediate (WTI) crude for June rose 9 cents to $64.80. Both Brent and WTI are on track for a second weekly gain as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand, while pent-up summer travel is likely to give gasoline and jet fuel consumption a further boost. In the United States, the world's largest oil consumer, jobless claims have dropped, signalling the labour market recovery had entered a new phase amid a booming economy. However, oil demand recovery has been uneven as surging COVID-19 cases in India has reduced fuel consumption at the world's third-largest oil importer and consumer. Resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of that lost demand has been offset by countries such as China where recent Labour Day holiday travel surpassed 2019 levels. "Gasoline demand in the U.S. and parts of Europe is faring relatively well," FGE said. "Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season."

Oil notches second weekly gain despite India virus surge (Reuters) -Oil edged up slightly on Friday even as the COVID-19 crisis in India worsened, and prices notched a second weekly gain against the backdrop of optimism over a global economic recovery. Brent crude futures ended the session at $68.28 a barrel while U.S. West Texas Intermediate (WTI) crude settled at $64.90 a barrel, both up 19 cents, or 0.3%. The two benchmarks rose by more than 1% on the week, their second consecutive weekly gain, as easing COVID-19 restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand. "Oil prices might still have a positive second consecutive week, but it is nothing to get energy traders excited that oil will break away from its tightening trading range. Oil's short-term outlook remains very mixed," Edward Moya, senior market analyst at OANDA said. In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity. However, crude imports by the world's biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December. The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world's third-largest oil importer and consumer. India on Friday reported a record daily rise in coronavirus cases of 414,188, while deaths from COVID-19 swelled by 3,915, according to health ministry data. "Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices," said Stephen Brennock at oil brokerage PVM. The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels. 

Oil giant Saudi Aramco beats estimates with 30% hike in first-quarter profit - Oil giant Saudi Aramco reported a 30% jump in net income Tuesday, in a sign of a continued recovery from the previous year's oil market crash that saw full-year earnings for the state firm slashed in half. In a release published Tuesday, the company said net income rose to $21.7 billion in the first three months of the year, up from $16.6 billion in the same period last year. It beat some analysts' estimates of $17.24 billion, despite lower oil production in February and March. The figure nears the firm's net income level in the first quarter of 2019, which was $22.2 billion. The company said free cash flow in the first quarter of 2021 was $18.3 billion, up from $15 billion over the same period last year. Saudi Arabia's behemoth oil producer also maintained its dividend, with $18.8 billion due to be paid out in both the first and second quarter. Aramco was forced to drastically cut its capital expenditure last year as the coronavirus pandemic hammered oil prices, and it "continues to explore plans to sell vital assets to raise funds," said Ellen Wald, president of Transversal Consulting and author of the book "Saudi, Inc." "It cannot be ignored that the massive dividend commitment and the need to fund the Saudi government budget are weights on the company," Wald told CNBC on Monday. "That doesn't mean Aramco isn't well positioned, but no other major oil company has to deal with these burdens." "Aramco maintains this because it has the cheapest costs of oil production in the world, with huge oil reserves and is very well managed," she added. "It has made the commitment to pay the dividend because the dividend is paid to the people of Saudi Arabia who own shares." The earnings reflect a dramatically improved climate for oil markets since the first quarter of last year, when Aramco reported a 25% fall in net income as it grappled with the initial fallout of the pandemic and cratering global demand. Aramco, like its global peers, has been navigating an uncertain oil price environment and unpredictable global economic recovery. The company described 2020 as "the most challenging year" in its history, and is now benefitting from the recovery in oil markets, with international benchmark Brent crude prices roughly double what they were this time last year. Refining and chemicals margins are also beginning to improve.

Israel About To Enter Post-Netanyahu Era After PM Fails To Form Government -- The already lengthy and continuing election deadlock drama in Israeli politics has once again pushed Prime Minister Benjamin Netanyahu to the side, leaving his political future in extreme doubt. His mandate to form a new government has failed for the third time in two years, with the Likud leader's appointed window for doing so having expired on Tuesday night.The Israeli leader who was been prime minister since 2009 and has consistently focused on a national security platform was unable to strike an agreement with his main rival Naftali Bennett, chairman of the right wing Yamina party, which now shifts the mandate to his rivals in the centrist Yesh Atid party. On Wednesday Israeli's president formally tapped Yair Lapid - party leader of Yesh Atid - to forge a new government. The clock now starts on his 28 days.

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