oil prices at another 31 month high; natural gas price at a 7 month high; refinery utilization at a 17 month high, refinery throughput at a 14 month high; biggest jump in gasoline inventories in 14 months; global oil shortage at 1.59 million barrels per day in May, despite 630,000 bpd production increase.
oil prices rose to a new 31 month high for a third consecutive week on forecasts from both the EIA and IEA for higher fuel demand in the second half of this year...after rising 5% to $69.62 a barrel last week on ongoing OPEC+ production restraint and on falling US crude supplies, the contract price of US light sweet crude for July delivery opened lower on Monday and slid more than 1% as traders awaited the outcome of this week's talks between Iran and the US over a deal that was expected to boost crude supplies, but clawed back part of the early losses to finish 39 cents lower at $69.23 a barrel as increased demand expectations for Europe and the U.S. placed a floor under the market...oil prices extended their loss early Tuesday on profit taking and on a stronger U.S. dollar, but rallied after US Secretary of State Blinken said that hundreds of sanctions targeting Iran are likely to remain in place even if Iran returned to compliance to settle 82 cents higher at $70.05 a barrel, thus closing above $70 for the first time since October 2018....after reaching $70.62 in early trading, oil prices dipped on Wednesday after the EIA reported big increases in gasoline and distillates inventories, and settled 9 cents, or 0.1%, lower at $69.96 a barrel, mostly due to weak fuel demand following the Memorial Day weekend, normally the kickoff of the peak summer driving season...after opening lower Thursday, oil prices drew support from higher-than-forecast U.S. inflation data and a strong demand outlook, and finished 33 cents higher at $70.29 a barrel after the EIA forecast a decline in global oil inventories and higher prices in the second half of 2021....oil prices rose again Friday after the IEA (International Energy Agency) said that OPEC would need to increase production to meet demand in the 2nd half, and finished up 62 cents at a fresh multi-year high of $70.91 a barrel, thus finishing the week 1.9% higher and posting its third straight weekly rise to the highest settle since mid-October 2018...
at the same time, natural gas prices rose for the ninth time in ten weeks and settled at a 7 month high, after a major eastern pipeline annouced pressure and volume restrictions...after rising 3.7% to $3.097 per mmBTU last week on forecasts for hot weather and high AC demand, the contract price of natural gas for July delivery opened higher Monday but faded to close 2.7 cents lower at $3.070 per mmBTU after gas output rose and the eastern US forecast shifted to a little further cooler for the next couple of weeks...but July natural gas prices rose 5.8 cents to a 15-week high of $3.128 per mmBTU on Tuesday after the European weather model projected a larger increase in cooling degree days (CDD) over the next two weeks than was previously expected...natural gas prices held steady despite hotter forecasts on Wednesday and closed just a tenth of cent higher at $3.129 per mmBTU, and then were up a modest 2.0 cents to $3.149 per mmBTU even with a bearish storage report on Thursday as higher temperatures and Appalachian supply concerns kept pressure on prices...but natural gas prices jumped 5% Friday after a major natural gas pipeline warned that pressure restrictions it had in place could last through the end of September and settled 14.7 cents higher at $3.296 per mmBTU, thus ending trading at a 7 month high, and with an increase of 6.4% on the week...
the natural gas storage report from the EIA for the week ending June 4th indicated that the amount of natural gas held in underground storage in the US rose by 98 billion cubic feet to 2,411 billion cubic feet by the end of the week, which still left our gas supplies 383 billion cubic feet, or 13.7% below the 2,794 billion cubic feet that were in storage on June 4th of last year, and 55 billion cubic feet, or 2.2% below the five-year average of 2,466 billion cubic feet of natural gas that have been in storage as of the 4th of June in recent years....the 98 billion cubic feet that were added to US natural gas storage this week was a bit above the average forecast of a 95 billion cubic foot addition from an S&P Global Platts survey of analysts, and was also above the average addition of 92 billion cubic feet of natural gas that have typically been injected into natural gas storage during the first week of June over the past 5 years, as well as just above the 95 billion cubic feet that were added to natural gas storage during the corresponding week of 2020...
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending June 4th showed that despite a big increase in our oil imports and an increase in our crude production, we still needed to withdraw oil from our stored commercial crude supplies for the eighth time in the past sixteen weeks and for the 30th time in the past forty-six weeks....our imports of crude oil rose by an average of 1,007,000 barrels per day to an average of 6,638,000 barrels per day, after falling by an average of 641,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 387,000 barrels per day to an average of 2,931,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,707,000 barrels of per day during the week ending June 4th, 620,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells reportedly rose by 200,000 barrels per day to 11,000,000 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 14,707,000 barrels per day during this reporting week...
meanwhile, US oil refineries reported they were processing 15,925,000 barrels of crude per day during the week ending June 4th, 327,000 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 941,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 276,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+276,000) 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 (+892,000) barrels per day, that means there was a 615,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, thus rendering the week over week supply and demand changes we have just transcribed useless....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 rose to an average of 6,238,000 barrels per day last week, which was 1.9% less than the 630,000 barrel per day average that we were importing over the same four-week period last year... the 941,000 barrel per day net withdrawal from our crude inventories included a 749,000 barrel per day withdrawal from our designated commercially available stocks of crude oil, and a 193,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes...this week's crude oil production was reported to be 200,000 barrels per day higher at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day higher at 10,600,000 barrels per day, while an 3,000 barrel per day increase in Alaska's oil production to 443,000 barrels per day had no impact on the rounded national total....US crude oil production was at a prepandemic record high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week's reported oil production figure was 16.0% below that of our production peak, yet still 30.5% 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 91.3% of their capacity while using those 15,925,000 barrels of crude per day during the week ending June 4th, up from 88.7% of capacity the prior week, and the highest refinery utilization since January 10th of last year...while the 15,925,000 barrels per day of oil that were refined this week were the most since February 21, 2020 and 18.1% higher than the 13,484,000 barrels of crude that were being processed daily during the pandemic impacted week ending June 5th of last year, they were still 6.7% below the 17,064,000 barrels of crude that were being processed daily during the week ending June 7th, 2019, when US refineries were operating at a close to summertime normal 95.7% of capacity...
even with this week's increase in the amount of oil being refined, the gasoline output from our refineries decreased by 135,000 barrels per day to 4,762,000 barrels per day during the week ending June 4th, after our gasoline output had decreased by 182,000 barrels per day over the prior week...while this week's gasoline production was still 15.9% higher than the 8,139,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 5.4% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 8.2% below the gasoline production of 10,276,000 barrels per day during the week ending June 7th, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 111,000 barrels per day to 4,918,000 barrels per day, after our distillates output had increased by 142,000 barrels per day over the prior week...while the pandemic pullback of last year didn't have much of an impact on distillates' production, this week's distillates output was still 3.3% more than the 4,762,000 barrels of distillates that were being produced daily during the week ending June 5th, 2020...
even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the eighth time in ten weeks, and for the 22nd time in thirty weeks, rising by 7,046,000 barrels to 241,026,000 barrels during the week ending June 4th, after our gasoline inventories had increased by 1,499,000 barrels over the prior week...our gasoline supplies increased by more this week because the amount of gasoline supplied to US users decreased by 666,000 barrels per day to 8,480,000 barrels per day, even as our exports of gasoline rose by 397,000 barrels per day to 957,000 barrels per day, while our imports of gasoline rose by 117,000 barrels per day to 1,050,000 barrels per day...and even after this week's inventory increase, our gasoline supplies were 6.8% lower than last June 5th's gasoline inventories of 258,661,000 barrels, but close to the five year average of our gasoline supplies for this time of the year...
meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the second time in nine weeks and for the 12th time in 25 weeks, rising by 4,412,000 barrels to 132,802,000 barrels during the week ending June 4th, after our distillates supplies had increased by 3,720,000 barrels during the prior week....our distillates supplies rose this again week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 400,000 barrels per day to 3,413,000 barrels per day, even as our imports of distillates fell by 327,000 barrels per day to 189,000 barrels per day while our exports of distillates rose by 85,000 barrels per day to 1,063,000 barrels per day....but after seven inventory decreases over the past 9 weeks, our distillate supplies at the end of the week were still 22.0% below the 175,829,000 barrels of distillates that we had in storage on June 5th, 2020, and about 5% below the five year average of distillates stocks for this time of the year...
finally, with the ongoing increase in our oil refining, our commercial supplies of crude oil in storage fell for the 19th time in the past thirty weeks and for the 25th time in the past year, decreasing by 5,241,000 barrels, from 479,270,000 barrels on May 28th to 474,029,000 barrels on June 4th, after our crude supplies had decreased by 5,079,000 barrels the prior week....after this week's decrease, our commercial crude oil inventories were about 4% below the most recent five-year average of crude oil supplies for this time of year, but were still about 34% above the average of our crude oil stocks as of the the first week of Junw 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 June 4th were 11.9% less than the 538,065,000 barrels of oil we had in commercial storage on June 5th of 2020, and now 2.4% less than the 485,470,000 barrels of oil that we had in storage on June 7th of 2019, but still 9.6% more than the 432,441,000 barrels of oil we had in commercial storage on June 8th of 2018...
OPEC's Monthly Oil Market Report
Thursday of this past week saw the release of OPEC's June Oil Market Report, which covers OPEC & global oil data for May, and hence it gives us a picture of the global oil supply & demand situation for the first month of the modest output easing policy initiated by OPEC and other producers at their early April meeting, which was actually the fourth production quota policy change they've made over the past year, all in response to the pandemic-related slowdown and subsquent recovery....but before we start, we want to again caution that the oil demand estimates made by OPEC herein, while the course of the Covid-19 pandemic still remains uncertain in most countries around the globe, should be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods..
the first table from this monthly report that we'll check is from the page numbered 47 of this month's report (pdf page 57), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures...
As we can see from the above table of their oil production data, OPEC's oil output increased by a rounded 390,000 barrels per day to 25,463,000 barrels per day during May, up from their revised April production total of 25,073,000 barrels per day...however, that April output figure was originally reported as 25,083,000 barrels per day, which therefore means that OPEC's April production was revised 10,000 barrels per day lower with this report, and hence OPEC's May production was, in effect, a 380,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official April OPEC output figures as reported a month ago, before this month's revision)...
From the above table, we can see that a production increase of 345,000 barrels per day from the Saudis was the major factor in OPEC's May output increase; the reason for that increase is that the Saudis unilaterally committed to cut their own production by a million barrels per day during February, March and then later during April of this year, and that they are now gradually unwinding that voluntary output decrease... recall that last year's original oil producer's agreement was to cut production by 9.7 million barrels per day from an October 2018 baseline for just two months early in the pandemic, during May and June, but that agreement had been extended to include July at a meeting between OPEC and other producers on June 6th....then, in a subsequent meeting in July of last year, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August and subsequent months, which was thus the agreement that covered OPEC's output for the rest of 2020...the OPEC+ agreement for January's production, which was later extended to include February and March and then April's output, was to further ease their supply cuts by 500,000 barrels per day to 7.2 million barrels per day from that original baseline...then, during a difficult meeting on April 1st of this year, OPEC and the other oil producers that are aligned with them agreed to incrimentally adjust their oil production higher over the next three months, which is the agreement which governed OPEC's May's production that you see above...
Hence, to see if all the OPEC members continued to adhere to the production cuts they had committed to during May, we'll include a copy of the production adjustments table that was provided as a downloadable attachment with the OPEC press release following their April 1st meeting with other oil producers...
the above table was included with the press release following the 15th OPEC and non-OPEC Ministerial Meeting on April 1st of this year, and it includes the reference production and expected production levels for the 10 members of OPEC that are expected to make cuts, as well as the same information for the other major oil producers who are party to what the press calls the "OPEC + agreement"....the first column in the above table shows the reference oil production baseline, in thousands of barrel per day, from which each of the oil producers was to cut from, a figure which is based on each of the oil producer's October 2018 oil output, ie., a date before last year's and the prior year's output cuts took effect, and coincidently the highest monthly production of the era for most of the producers who are party to these cuts...the remaining columns show the adjustment, or cut, that each is expected to make from that reference production level, and then the oil output allowed for each producer under the April agreement for the months of May, June and July...
OPEC arrived at these figures by repeatedly adjusting the original 23%, or 9.7 million barrel per day cut from the October 2018 baseline first agreed to for May and June 2020, first to a 7.7 million barrel per day reduction from the baseline for the remainder of 2020, then to a 7.2 million barrel per day production cut from the baseline for the first four months of this year, which was actually raised to an 8.2 million barrel per day reduction after the Saudis unilaterally committed to cut their own production by a million barrels per day during February, March, and then later during April of this year....under the prior agreement, OPEC's production cut in April was at 4,564,000 barrels per day from the October 2018 baseline; as you see above, their cut for May was lowered to 4,287,000 barrels per day from the baseline with the latest agreement...
the next graphic from this month's report that we'll highlight shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from June 2019 to May 2021, and it comes from page 48 (pdf page 58) of OPEC's June Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....
Including this month's reported 390,000 barrel per day increase in OPEC's production from what they produced a month earlier, OPEC's preliminary estimate indicates that total global liquids production increased by a rounded 630,000 barrels per day to average 93.67 million barrels per day in May, a reported increase which apparently came after April's total global output figure was revised down by 20,000 barrels per day from the 93.06 million barrels per day of global oil output that was reported for April a month ago, as non-OPEC oil production rose by a rounded 240,000 barrels per day in May after that revision, with with increases in the oil output from the US, the UK, Brazil and Guyana accounting for most of the non-OPEC production increase in May...
After that increase in May's global output, the 93.67 million barrels of oil per day that were produced globally during the month were 4.30 million barrels per day, or 4.8% more than the revised 89.37 million barrels of oil per day that were being produced globally in May a year ago, which was first month of the OPEC + agreement to cut global output by 9.7 million barrels per day (see the June 2020 OPEC report (online pdf) for the originally reported May 2020 details)...with this month's increase in OPEC's output, their May oil production of 25,463,000 barrels per day was at 27.2% of what was produced globally during the month, an increase of 0.2% from their 27.0% share of the global total in April....OPEC's May 2020 production was reported at 24,195,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 1,268,000, or 5.2% more barrels per day of oil this May than what they produced a year earlier, when they accounted for 26.9% of global output...
However, even after the sizable increase in global oil output that we've seen in this report, the amount of oil being produced globally during the month again fell short of the expected demand, as this next table from the OPEC report will show us...
the above table came from page 27 of the OPEC June Oil Market Report (pdf page 37), and it shows regional and total oil demand estimates in millions of barrels per day for 2020 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2021 over the rest of the table...on the "Total world" line in the third column, we've circled in blue the figure that's relevant for May, which is their estimate of global oil demand during the second quarter of 2021... OPEC is estimating that during the 2nd quarter of this year, all oil consuming regions of the globe will be using an average of 95.26 million barrels of oil per day, which is a rounded 470,000 barrels per day upward revision from the 94.79 million barrels of oil per day of demand they were estimating for the second quarter a month ago (note that we have encircled this month's revisions in green), which still reflects quite a bit of coronavirus related demand destruction compared to 2019, when global demand averaged 99.98 million barrels per day....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were only producing 93.67 million barrels million barrels per day during May, which would imply that there was a shortage of around 1,590,000 barrels per day in global oil production in May when compared to the demand estimated for the month...
In addition to figuring May's global oil supply shortfall that's evident in this report, the upward revision of 470,000 barrels per day to second quarter demand that's shown above, combined with the 20,000 barrel per day downward revision to April's global oil supplies that's implied in this report, means that the 1,730,000 barrels per day global oil output shortage we had previously figured for April would now be revised to a shortage of 2,220,000 barrels per day...
note that in green we have also circled a downward revision of 360,000 barrels per day to OPEC's previous estimates of first quarter demand...for March, that means that the 80,000 barrels per day global oil output shortage we had previously figured for March would be revised to a surplus of 280,000 barrels per day... similarly, the downward revision to first quarter demand means that the 1,290,000 barrels per day global oil output shortage we had previously figured for February would now be revised to a shortage of 930,000 barrels per day, and that the 70,000 barrels per day global oil output shortage we had previously figured for January would now be revised to a surplus of 290,000 barrels per day, in light of that 360,000 barrel per day downward revision to first quarter demand...
also note in our green ellipse on the table above that we have circled an upward revision of 120,000 barrels per day to global demand for 2020...on a separate table on page 26 of the OPEC June Oil Market Report (pdf page 36) we can see this includes upward revisions of 190,000 barrels per day, 230,000 barrels per day, and 80,000 barrels per day for 2020's 2nd, 3rd and 4th quarters respectively, and a downward revision of 20,000 barrels per day to first quarter 2020 demand...while we're not inclined to go back and recompute the figures for each month of last year in light of those revisions, suffice it to say that the quantities of oil produced globally during the pandemic of 2020 averaged over 3 million barrels per day more than anyone wanted, and that an average 120,000 barrels per day upward revision to global demand is a drop in the bucket in comparison...
This Week's Rig Count
The US rig count rose for the 34th time over the past 39 weeks during the week ending June 11th, but it's still down by 41.8% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 5 to 461 rigs this past week, which was also up by 182 rigs from the pandemic hit 279 rigs that were in use as of the June 12th report of 2020, but was still 1,468 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in an attempt to put US shale out of business....
The number of rigs drilling for oil was up by 6 to 365 oil rigs this week, after being unchanged the prior week, and that's now 166 more oil rigs than were running a year ago, but is still just 22.7% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was down by 1 to 96 natural gas rigs, which was still up by 18 natural gas rigs from the 78 natural gas rigs that were drilling a year ago, and still just 6.0% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008....
The Gulf of Mexico rig count was unchanged at 13 rigs this week, with all 13 of those rigs drilling for oil in Louisiana's offshore waters....that was the same number of Gulf of Mexico rigs that were drilling in the Gulf a year ago, when again all 13 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 count... however, in addition to those rigs offshore, a rig continued to drill through an inland lake in St Mary parish, Louisiana this week, whereas there were no such "inland waters" rigs running a year ago...
The count of active horizontal drilling rigs was uup by 5 to 420 horizontal rigs this week, which was also up by 174 rigs from the 246 horizontal rigs that were in use in the US on June 12th of last year, but less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....in addition, the vertical rig count was up by one to 17 vertical rigs this week, and those were also up by 6 from the 11 vertical rigs that were operating during the same week a year ago....on the other hand, the directional rig count was down by 1 to 24 directional rigs this week, which was still up by 2 from the 22 directional rigs that were in use on June 12th of 2020....
The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of June 11th, the second column shows the change in the number of working rigs between last week's count (June 4th) and this week's (June 11th) count, the third column shows last week's June 4th 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 12th of June, 2020..
in addition to the usual spate of oil rig redeployments, we also have a number of natural gas rig changes 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 two oil rigs were added in Texas Oil District 8, which is the core Permian Delaware, and another oil rig was added in Texas Oil District 7B, which includes the farthest east counties of the Permian Midland, while a rig was pulled out from Texas Oil District 7C, which encompasses the southern counties of the Permian Midland, which thus gives us a net increase of two rigs in the Texas Permian....since the Permian basin saw a four rig increase nationally, that means that the two rigs that were added in New Mexico had to have been set up to drill in the far west reaches of the Permian Delaware, to account for the national Permian basin increase...elsewhere in Texas, we find that a rig was added in Texas Oil District 6, which accounts for this week's Haynesville shale natural gas rig increase, and that rig counts in all other Texas districts were unchanged...elsewhere, all three rigs added in Wyoming were apparently targeting oil in a basin that Baker Hughes doesn't track, while an oil rig was pulled out from Alaska, also from an unnamed basin...in addition, we have two natural gas rigs pulled out of Ohio's Utica shale, and a natural gas rig pulled out of Pennsylvania's Marcellus, while a natural gas rig added in West Virginia's Marcellus, thus leaving the Marcellus rig count unchanged and the national natural gas rig count down by one..
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Gas waste dangers to be discussed - The Vindicator — Silverio Caggiano, newly retired Youngstown Fire Department battalion chief, will discuss hazards involved in the transport and disposal of waste products from the oil and gas industry. The Wednesday program is titled, “The Oil and Gas Industry: A Dangerous Game of Hide and Seek.” Caggiano, a retired Youngstown Fire Department Battalion Chief with 40 years of experience, graduated from the Canton Aultman paramedic program in 1985 and attended many other classes, including the Ohio Fire Academy for firefighter training, fire instructor and hazardous materials technician and instructor. He has taken classes on subjects such as incident command, terrorism, threat credibility assessment, nuclear, explosives, rail car incidents, bioterrorism, evidence collection and forensic epidemiology — to name a few. Caggiano said he got into HazMat in 1991. HazMat teams started in 1986 as a result of the Superfund Amendments and Reauthorization Act, also known as the Emergency Planning and Community Right-to-Know law. He went on to become a specialist and consultant in hazardous materials, serving as an active member of the Ohio HazMat Weapons of Mass Destruction Advisory Committee.With a lifetime of knowledge under his belt, Caggiano is able to address several issues of concern, such as the oil and gas waste products that come into the area.“Since Pennsylvania and New York have restricted their waste sites, Ohio has become the dumping ground for well drilling done in those states as well as our own,” he said. “The injection wells and above-ground dumps seem to pop up in low-income areas — places that can ill afford lawyers to fight the companies … ”He said most of the waste travels by truck, which brings on its own problems.“These trucks have drivers that are not HazMat trained and have no idea what they are hauling,” Caggiano said. “If you or I owned a trucking company and we had a 55-gallon drum of what is inside their trucks, we would have to have certifications and drivers trained to HAZWOPER standards. Free pass to the oil and gas industry on all that.” Looking at the issue from the fire department’s perspective, there are even more problems. “That’s the kicker, you cannot prepare for what you don’t know about,” he said. “I would say the major concern with the frack waste is nuclear, but there is also a chemical contamination issue. And if you don’t know what the 11 secret herbs and spices are in the recipe, you’re flying blind.”He said he got into learning about fracking while attending an informational meeting at YSU on legislation working its way through Ohio in 2012. “My HazMat chief and I wanted to attend that meeting to show a presence for the community and to find out if it was true that first responders and local area planning committees were not entitled to material safety data sheets on what chemicals were at the well sites,” Caggiano said. “That was a huge departure from the norm. Unfortunately the rumors were true. “That’s when I jumped down the rabbit hole and the learning began as I met all the characters … hidden reports, untrained truck drivers, secret chemicals, bought and paid for Ohio legislators and much, much more.”
Columbiana County, OH Sees Uptick in Utica Drilling Interest - Columbiana County, Ohio, located in the northern part of the Utica Shale play in the state, was an early target for Aubrey McClendon (then-CEO of Chesapeake Energy). Aubrey was right about the Utica being “the biggest thing to hit Ohio since the plow.” But he was wrong about where the most productive wells would be located, which is further south in the play. Still, there’s money to be made in the northern Utica, and companies like Encino Energy (which now owns Chesapeake’s Ohio assets) and Hilcorp continue to drill in Columbiana.MDN did a quick check and found that since January 1 of this year, 14 permits to drill new shale wells in Columbiana have been issued. Two permits were issued to Encino for the same well pad in February, and 12 permits were issued to Hilcorp, also in February, all for the same well pad. And that’s been it for this year.We spotted a story appearing in the Youngstown Business Journal which says Encino has applied for (not yet awarded) permits to drill another four wells in Columbiana County. Hilcorp has been awarded a permit to “drill deeper” for one of its previously-drilled wells. We take this recent uptick in activity as a good sign that there’s a spark of life for Utica drilling in Columbiana. EAP Ohio LLC, a division of Encino Acquisition Partners, Houston, has submitted permit applications to drill four new horizontal wells in Washington Township in Columbiana County, according to data from the Ohio Department of Natural Resources.According to ODNR, the company plans to drill four new horizontal wells at its Sevek-18 pad. The permit applications are pending before the agency.Meanwhile, Houston-based Hilcorp Energy Co. was awarded a permit to drill deeper and build out a horizontal leg at its 10H well at the Tarka pad in Fairfield Township in Columbiana County, according to ODNR.Since January, ODNR has awarded 14 permits to the two oil and gas companies, which target the natural-gas rich Utica-Point Pleasant shale formation.So far this year, EAP has been awarded two permits to drill wells in Washington Township, while Hilcorp has been awarded 12 permits for new horizontal wells in Fairfield Township, according to ODNR.Natural gas production across the Utica-Point Pleasant and the Marcellus shale formation in Appalachia is expected to be lower in June compared to May, according to the U.S. Energy Information Administration’s latest drilling productivity report.According to EIA, natural gas production across Appalachia is projected to decline in June by 52 million cubic feet per day. Oil production, however, is expected to increase by 1,000 barrels per day, EIA reported.*
While we languish, the General Assembly's biased energy agenda flourishes: Tracy Freeman, Nature Conservancy-- While most Ohioans are reeling from the damaging effects of the pandemic — a mental state that The New York Times has recently labeled as languishing — our very own General Assembly has wasted no time in moving forward merciless personal agendas that favor fossil fuels. Specifically, there are several energy bills and provisions in the state budget bill that encourage the expansion of fossil fuels while decreasing opportunities for renewable energy.For example:
- · Senate Bill 52 creates yet another obstacle for wind energy and solar development in Ohio by burdening counties, the Ohio Power Siting Board and renewable energy developers with unprecedented requirements to approve and site wind and solar projects. These new steps in the siting process do not apply to any other energy source. As of yesterday afternoon, SB 52 had passed the Senate and is being considered by the House.
- · House Bill 201, House Bill 192, and Senate Bill 127: In stark contrast to SB 52, these bills would disallow local decision-making by prohibiting municipalities from limiting the use of fossil fuels and gas pipelines. This further adds to the regulatory bias toward fossil fuels. As of yesterday afternoon, HB 201 had passed the House and is pending in the Senate Energy and Public Utilities Committee.
- · Change in language for Ohio Oil & Gas Leasing Commission in budget bill: In keeping with this trend, a provision added by the Ohio House to House Bill 110, the biennial budget bill, makes it the state policy to “promote” oil and gas drilling, but, notably, no other sources of energy on state lands. This provision also reduces the transparency in this process and authorizes every state agency to bypass the Oil & Gas Leasing Commission to lease state land for exploration, development and production of oil and gas at terms established by the oil and gas companies. As of yesterday afternoon, HB 110 had passed the Senate and was before the House-Senate conference committee before being sent back to each legislative chamber for concurrence on changes and then to Gov. Mike DeWine for his signature.
In conflict with these regulatory trends is the will of the people. Polling over the last four years has increasingly shown that Ohioans want more renewable energy — an outcome that most believe would benefit the state economy, improve health, and reduce our reliance on foreign oil. These energy policies being considered and passed by our state legislature promote the opposite. This chasm should alarm us all.
Ascent Resources Floats $400M in New IOUs to Pay Down Older Debt - Ascent Resources, originally founded as American Energy Partners by gas legend Aubrey McClendon, is a privately-held company that focuses 100% on the Ohio Utica Shale. Ascent is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company announced yesterday it is floating new “senior notes” (we call them IOUs) to retire or pay off other notes coming due. This business of issuing new notes to pay off old notes is routine. We’ve seen it dozens (maybe hundreds) of times over the years. This latest note swapping by Ascent follows a typical pattern. The company issues a press release announcing new notes will be floated for $X amount of money. Shortly after the first press release, the company issues a second release announcing the offering has been “upsized” for even more money. In the case of Ascent, the original announcement was an offering of $350 million in new notes. Soon after the number was upsized to $400 million.The first press release from yesterday: Ascent Resources Utica Holdings, LLC (together with its subsidiaries, “Ascent”) announced today that it, with its wholly-owned subsidiary, ARU Finance Corporation, intends to offer $350 million in aggregate principal amount of senior unsecured notes due 2029 (the “2029 Notes”) in a private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). Ascent intends to use the proceeds of the 2029 Notes offering to pay down a portion of the outstanding borrowings under its revolving credit facility. The second press release issued a short time later: Ascent Resources Utica Holdings, LLC (together with its subsidiaries, “Ascent”) announced today that it, with its wholly-owned subsidiary, ARU Finance Corporation, has priced an upsized private offering of $400 million in aggregate principal amount of 5.875% senior unsecured notes due 2029 (the “2029 Notes”) at par. Ascent will use the proceeds of the 2029 Notes offering to pay down a portion of the outstanding borrowings under its revolving credit facility.Debt financing like this is a fact of business life, at least in the upstream oil and gas business.
Weekly Shale Drilling Permits for PA, OH, WV: May 31-Jun 6 - Two of three Marcellus/Utica states received permits to drill new shale wells last week. Pennsylvania issued 13 new permits, almost all of them in the dry gas northeastern part of the state. Ohio issued 11 new permits, in the center of the Utica play. West Virginia’s shale industry got skunked last week–no new permits. It’s been quite a while since that’s happened in WV. PA table: https://marcellusdrilling.com/wp-content/uploads/2021/06/Weekly-Permits-Report-PA-0531-0606.pdf Ohio table: https://marcellusdrilling.com/wp-content/uploads/2021/06/Weekly-Permits-Report-OH-0531-0606.pdf
Tioga County Landowners Appeal UGI Takings Case to PA Supremes -- Just coming to light for us now is a long-running lawsuit in Tioga County, PA by landowners who claim that UGI has taken their mineral rights as part of operating the Meeker Storage Field, an underground natural gas storage facility. The landowners lost the lawsuit in the Court of Common Pleas of Tioga County (trial court) in March 2019 (although the case began in 2016). The landowners appealed to Commonwealth Court and lost there too, in November 2020. The landowners appealed again, to the Pennsylvania Supreme Court. The Supremes have just accepted the case.
Philadelphia Gas Works to Reduce Methane Emissions 80% by 2050 – Philadelphia Gas Works announced a plan to replace decades-old pipes buried across the city to stop harmful methane gas from bleeding into the air. PGW, the nation's largest municipally-owned gas utility, plans to cut methane emissions 80% by 2050 by modernizing infrastructure and implementing new technology, according to a news release. Methane is a powerful greenhouse gas that contributes to global warming at a rate more than 80 times that of carbon dioxide.The Intergovernmental Panel on Climate Change and the City of Philadelphia have committed to reaching carbon neutrality by 2050 to keep warming below 1.5 degrees centigrade.This will require PGW to offset their remaining emissions through planting trees or other measures, "Eighty percent is certainly better than nothing, but that remaining 20% of emissions is going to fall on somebody else to get rid of," The company plans to replace 30 miles of natural gas mains with new, modern pipes, bringing emissions along the new mains to near zero.The Methane Reduction Program will also include accelerating the company's leak reduction program to track, monitor, repair and reduce the amount of methane leaks. Since Philadelphia is an old city, he predicts that there are currently a high number of leaks in the old, cast iron pipes.The old distribution system, much of which is buried underground, could make it difficult to control the leaks, Altenburg said. It likely will require shutting down streets and tearing up sidewalks to perform the necessary updates.A 2015 report by the Pennsylvania Public Utilities Commission found 7,600 total leaks across PGW's system with more than half being classified as hazardous. PGW has the highest percentage of at-risk pipe statewide, the report said.Scientists have found that emissions are significantly higher in urban areas, such as Philadelphia, although there is little information available about the local effects of greenhouse gases,
Natural gas flaring in Veazie --If you see flames shooting into the air in Veazie this week, don’t be alarmed. M & N Operating Company operates interstate natural gas pipeline facilities. Officials say they will be cleaning and inspecting a segment of a pipeline that runs from Eddington to Veazie. It requires a a safe and routine procedure called natural gas flaring. That will take place near the Shore Road in Veazie next to the power plant... They say personnel will be there during the entire operation. A smell of natural gas and a noticeable rushing sound may be present but they say there will be no danger to anyone in the area.
Supply disruptions and rising demand boosted East Coast petroleum product imports in March -Imports of petroleum products—gasoline, distillate, and other products—into the East Coast region of the United States increased in March 2021. Rising imports resulted from lower domestic supply, higher demand, and higher domestic petroleum product prices compared with prices in Europe. In March, East Coast petroleum product imports averaged 1.4 million barrels per day (b/d). In addition, East Coast gasoline imports averaged 737,000 b/d, the highest March level since 2009, and East Coast distillate imports averaged 421,000 b/d, the highest March level since 2003.Petroleum product imports into the East Coast region increased primarily for three reasons.First, domestic supply was reduced, due in part to the extreme winter weather in February 2021, which disrupted operations at several refineries in the U.S. Gulf Coast region, where more than half of U.S. refinery capacity is located. Because significantly more petroleum products are consumed in the East Coast region than its regional refineries produce, the region relies on imports and pipeline supplies from the U.S. Gulf Coast region.When production is disrupted in the U.S. Gulf Coast region (as was the case in February and March 2021), the East Coast region relies more on imports to meet its petroleum product demand. Lower supply, particularly in the East Coast region, has also been due, in part, to lower East Coast refining capacity after the 335,000 b/d Philadelphia Energy Solutions (PES) refinery closed in June 2019. We estimate that closing the Philadelphia refinery reduced East Coast gasoline supplies by approximately 160,000 b/d and distillate supplies by approximately 100,000 b/d.Second, domestic demand for petroleum products increased. U.S. gasoline consumption increased to 8.6 million b/d in March, the highest level since February 2020, and distillate consumption increased to 4.0 million b/d, the highest level since November 2019.Third, the prices of U.S. petroleum products have been higher than in Europe. In March, the New York Harbor gasoline spot price averaged 30 cents per gallon (gal) more than gasoline in Europe, the widest spot price spread between these markets in the past 10 years (2012–2021).
Foes of Line 5 debut ads with Jeff Daniels saying pipeline needs to go - Environmental opponents of Line 5 on Tuesday unveiled ads on TV and radio featuring actor and Michigan native Jeff Daniels lambasting it as "an aging, dangerous pipeline" that needs to be shut down for good. The six-figure statewide ads, sponsored by the National Wildlife Federation, are a direct response to the numerous ads run for months by Line 5 owner Enbridge warning of the public of dire consequences if the pipeline is shut down at the behest of Gov. Gretchen Whitmer. In a Zoom call with reporters, National Wildlife Federation officials said Enbridge is flouting the law, given that the governor has revoked the easement, and the misinformation campaign waged by the company has to be answered. "Jeff Daniels is a strong believer in our Pure Michigan way of life ... we know our Pure Michigan way of life is at risk because of the threat Line 5 poses to the Great Lakes," said Mike Shriberg, Great Lakes regional executive director for the federation. "NWF has been at the forefront of exposing the risks of Line 5 right from the very beginning." Federation officials said the first run of the ads would be two weeks but more time and other ads are expected. "This is part of a comprehensive effort to set the record straight on this so it's not just paid media and advertising," Shriberg said. "We know we won't match Enbridge dollar for dollar, but we also know that we've got the truth on our side." Shriberg said the 68-year-old dual pipeline along the bottom of the Straits of Mackinac is a "ticking time bomb." "It is possible, perhaps even probable, that we'd have catastrophic consequences for our drinking water, our wildlife and our economy if it were to happen," he said. "The pipeline is decades past its original lifespan."
Nicor natural gas pipeline in Black farming community in Kankakee County approved by Illinois Legislature, awaits Gov. J.B. Pritzker’s signature - With a big push from the Rev. Jesse Jackson, a Nicor natural gas pipeline proposed for a Black farming community in Kankakee County has moved a step closer even as some who live in the area and environmentalists continue to fight the project. In the final hours of the legislative session that ended early on June 1, Illinois legislators approved a package to help fund Nicor’s proposed gas line to the village of Hopkins Park in Pembroke Township. If Gov. J.B. Pritzker’s signs the measure into law — he hasn’t said whether he will — it would move the community into a decades-long fossil fuel commitment at the same time Illinois political leaders promise they’re working toward a clean energy future. The pipeline is opposed by a small group of farmers who say they are worried about the environmental impacts and have safety concerns. The farmers found support from environmentalists in opposing the $10 million plan, which needed legislative approval for taxpayer and gas customer subsidies. But the bill was passed with overwhelming support by lawmakers, many who say they were swayed by the argument that natural gas will spur economic development in the poor, rural community. “There’s been gross misrepresentation here,” Dr. Jifunza Wright-Carter, a farmer and pipeline opponent, told state legislators at a hearing in May.
Coast Guard, partner agencies, finish cleanup of oil spill in Norfolk creek – It took two weeks for crews to complete the cleanup of an oil spill in Norfolk.The cleanup efforts started after an on-shore waste oil tank overflowed into Steamboat Creek on Monday, May 24.The unnamed property owner is facing charges, Virginia Department of Health officials confirmed a couple days after the spill.Coast Guard Sector Virginia pollution responders, Virginia Department of Environmental Quality, Virginia Department of Emergency Management, and the Norfolk Fire Marshal’s Office worked with additional federal, state, and local agencies to coordinate cleanup operations and assess impacts, which concluded on June 7.Pollution teams removed approximately 250 bags of oiled debris and approximately 200 gallons of oil from the water. In total, teams used approximately 10,000 feet of sorbent material during the 14-day cleanup effort. This incident remains under investigation.
State lawmakers cut big oil a big break – Two weeks after the formal close of the Tennessee legislative season, a committee of lawmakers agreed to give the state’s petroleum companies a big break. The Joint Government Operations Committee approved new rules that shift the financial burden of cleaning up toxic spills at gas stations and truck stops from business owners to taxpayers for the next five years. The new rules will save Pilot Flying J, Chevron, Exxon and other companies, large and small, $2 million each year by eliminating environmental fees, while taxpayers will remain on the hook for roughly $14 million annually through a four-tenths-of-a-cent, per-gallon gas tax. The fees and gas tax, for decades, have been earmarked for a state fund used to pay for the clean-up of toxic spills from company-owned underground storage tanks used for petroleum reserves. When those tanks leak, they can spill dangerous levels of hazardous waste into soil and groundwater. A pin-prick sized hole in an underground storage tank can leak 400 gallons of fuel containing carcinogens and heavy metals that can contaminate a community’s drinking water, according to the Sierra Club. Cleaning up those leaks is an expensive undertaking that — up till now —has been shared by taxpayers and industry. The new rules, for the first time, also give company owners with a history of environmental violations access to the state’s clean-up fund for leaking tanks. Previously, companies who failed to comply with state environmental rules were barred from accessing state funding.
ENVIRONMENTAL JUSTICE: Memphis pipeline rekindles eminent domain fight -- Monday, June 7, 2021 --— It's four words that Wyatt Price probably wishes he could take back.Explaining why a planned oil pipeline was taking a roundabout path around Memphis through a Black neighborhood, Price, a land agent for the Byhalia Connection pipeline, last year told a gathering it was the "point of least resistance."To those fighting the Byhalia project, it was a moment of unguarded candor that revealed a strategy to bulldoze the project through a low-income Black community with little clout.That's a natural consequence of handing over condemnation powers to a private company with next to no regulatory scrutiny, property rights advocates say. The oil and gas industry says condemnation powers are essential to building needed pipelines. But its critics say "blank check" powers in the hands of private interests are ripe for abuse."They go right where the land is cheapest, and that's the poorest neighborhoods," said David Bookbinder, chief counsel at the Niskanen Center, a think tank that takes a libertarian approach to eminent domain and environmental issues. "That's absolutely ridiculous."The companies behind the Byhalia project, Plains All American Pipeline LP and Valero Energy Corp., have used eminent domain, or the threat of it, to get about 97% of the land they need to lay 50 miles of pipe from one side of Memphis to the other. That includes land in predominantly white, wealthy areas in Mississippi."The route was not driven by race, class, gender or any other demographic type — it wasn't a choice to affect one group of people over another," Brad Leone, Plains' director of communications and public affairs, told E&E News in a statement.The company has disowned the remarks of Price, a Byhalia contractor who could not be reached for comment. At a meeting in the southwest Memphis community last fall, Plains spokesperson Katie Martin said he should have explained that the company had picked a path with the "least community impacts."Private companies have used the power of eminent domain to get land for many of the pipes moving the products of the fracking-driven oil and gas boom to markets and refineries.Such authority, industry advocates say, is vital to building pipelines, which are in turn vital for the economy. Without eminent domain, a few landowners — or even just one — could block a project."The benefit to the many outweighs the objections of a small minority," said John Stoody, vice president of government and public relations at the Association of Oil Pipe Lines. "Everyone depends on energy."What's ridiculous, he said, is to think that pipeline planners would go out of their way to find cheap land. Changing a pipeline's path might save thousands of dollars upfront, he said. But if it makes the line longer, construction could cost millions more.The route Plains and Valero chose cuts through 7 miles of predominantly Black southwest Memphis, heading south from a Valero refinery. It then sweeps 43 miles around the edges of the Memphis suburbs in northern Mississippi to a point near Byhalia, Miss., where it would connect to an existing north-south pipeline called Capline.Construction has not yet started on the project, but it's under siege by community activists who say it would dump more industrial activity and pollution on the city's Black community. They've joined with environmentalists who say it would jeopardize the aquifer that supplies the city's drinking water (Energywire, May 3).
Colonial Pipeline CEO: 'One of the toughest decisions I have had to make' to pay a $4.4M ransom - — The CEO of Colonial Pipeline, which underwent a ransomware attack in early May that led to massive shutdowns of gas stations across the Southeast, said during a U.S. Senate hearing on Tuesday that it was his decision to pay a ransom to restore the company’s operations. “It was one of the toughest decisions I have had to make in my life,” Joseph A. Blount Jr. said in his opening statement. “But I believe that restoring critical infrastructure as quickly as possible, in this situation, was the right thing to do for the country.” Georgia-based Colonial Pipeline paid the $4.4 million ransom to hackers, part of a cyber criminal group called DarkSide, in order to obtain a key to unlock their pipelines. Senate Homeland Security & Governmental Affairs Committee Chairman Gary Peters said in his opening statement that the “federal government must develop a comprehensive, all-of-government approach to not only defend against cyberattacks, but punish foreign adversaries who continue to perpetuate them or harbor criminal organizations that target American systems.” Peters, a Michigan Democrat, then asked Blount how the federal government could help companies defend themselves from cyberattacks. Blount said that the federal government should designate a person of contact to help private companies that are experiencing cyberattacks. Blount testified before the committee about his company’s coordination with the Cybersecurity and Infrastructure Security Agency, also known as CISA, and what role the federal government should play in helping protect private companies from cyberattacks. Blount said that Colonial Pipeline did not reach out to CISA, but first asked for assistance from the FBI on May 7, the day of the attack, and that the FBI coordinated a meeting that included CISA. CISA is a standalone federal agency that operates under Department of Homeland Security oversight. It works with various agencies and private partners to evaluate cybersecurity threats and vulnerabilities and provides assessments to help safeguard those networks. “Private industry alone can’t do everything on their own,” Blount, who was the only witness, said during his testimony.
How bankruptcy lets oil and gas companies evade cleanup rules - A battle over who is responsible for cleaning up hundreds of oil and gas rigs in the Gulf of Mexico is quietly playing out in a bankruptcy court in southern Texas. The contestants in this game of fossil fuel infrastructure hot potato: Fieldwood Energy, an offshore drilling company attempting to offload more than $7 billion in environmental cleanup responsibilities; a group of oil majors including Chevron, Marathon Oil, and BP; and the Department of the Interior.* Fieldwood has declared bankruptcy, and a court is considering the company’s plan to split its assets, moving older legacy wells and drilling rigs that are expensive to clean up into two entities while creating a new company — appropriately named NewCo — to purchase the more profitable assets. The company proposes outright abandoning a fourth bucket of assets consisting of more than 1,170 wells, 280 pipelines, and 270 drilling platforms. Aging wells and drilling platforms pose multiple risks to the environment and human safety, including oil and gas leaks and explosions. A quirk in the regulations that govern offshore drilling allows the Interior Department to hold companies that previously operated on Fieldwood leases accountable for the cleanup. The department is charged with protecting public lands — both on land and offshore — and issues leases to more than 12 million acres of seabed, including in the Gulf. A single lease can contain multiple wells, and many of the leases that Fieldwood is proposing to abandon or “return” to predecessor companies could end up the responsibility of oil majors, such as Chevron and BP. Unsurprisingly, both companies have zealously objected to the company’s bankruptcy plan. While the oil companies attempt to dodge responsibility for cleanup, the Interior Department, has been filing objections to Fieldwood’s plan to transfer leases to other companies and abandon wells, stating that its environmental obligations are “nondischargeable” and that leases cannot be sold or transferred without sign-off from the federal government. Fieldwood is one of more than 260 oil and gas companies that has filed for bankruptcy in the last six years. With low prices and suppressed demand for oil and gas over the last year, operators have struggled to stay afloat. Many have been turning to bankruptcy in an attempt to shed their debts, reorganize their assets, and, in some cases, offload their environmental obligations. Utilizing limitations and loopholes in bankruptcy law, these companies are employing a playbook perfected by coal companies to shed their environmental and labor liabilities.
Why Plastic Pollution Is Even Worse Than You Think --- Why Plastic Pollution Is Even Worse Than You Think – YouTube Along the banks of the Mississippi River, right before it spills out past New Orleans into the sea lies Cancer Alley. An 85 mile strip of shoreline where residents are contracting cancer at astronomical rates. But this isn't a phenomenon based in genetics or some cruel twist of fate. Cancer Alley is the product of environmental pollution. And today we're going to figure out exactly where this pollution is coming from. This is the story of plastics, the harm they cause, the industries that create them, and how that 85 mile strip of Mississippi shoreline and other areas like it are suffering because of them.If you walk into your kitchen, pretty much everything, in some way or another, has encountered plastic. The plastic bags you stuff into a drawer, your favorite cup and even the package keeping those blueberries fresh. But despite plastic's ubiquity, we often forget where it comes from. Indeed, when it comes to plastic our efforts seem to be much more focused on what happens after we use it than before we use it. So first, let's understand how plastic gets made. It all starts in an oil refinery or a fracking site. That's right, plastics are basically just fossil fuels in solid form. In fact, 99% of plastics are made from chemicals rooted in fossil fuels. The plastic creation process begins with crude oil, coal, or natural gas, which is then refined and distilled or "cracked" into usable chemical compounds such as Ethylene or Benzene. Of course there are certain plastics that are the product of recycled goods, but I'll get into that much more in the video above. The key thing here is that the plastic that we use so heavily is really the same as the petroleum we put in our cars or the natural gas we use to heat our homes. Which is one of the reasons why the fossil fuel industry loves plastics.
U.S. natgas futures slip on less hot forecasts, rising output (Reuters) - U.S. natural gas futures slipped on Monday on forecasts for less hot weather and a reduction in the amount of gas power generators will burn to keep air conditioners humming next week than previously expected. Traders also noted prices were down on rising output and lower liquefied natural gas (LNG) exports despite near-record pipeline deliveries to Mexico. Front-month gas futures fell 2.7 cents, or 0.9%, to settle at $3.070 per million British thermal units (mmBtu). But with gas prices in Europe near their highest since September 2018 and prices in Asia over $10 per mmBtu, U.S. speculators boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges last week for the fourth time in five weeks. Traders expect global buyers will keep buying all the LNG the United States can produce. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.8 billion cubic feet per day (bcfd) so far in June, up from 91.0 bcfd in May but still well below the monthly record high of 95.4 bcfd in November 2019. With warmer weather coming, Refinitiv projected average gas demand, including exports, would rise from 88.2 bcfd this week to 88.9 bcfd next week. The forecast for next week was lower than Refinitiv predicted on Friday as a slightly less hot forecast will reduce air conditioning use. The amount of gas flowing to U.S. LNG export plants averaged 10.2 bcfd so far in June, down from 10.8 bcfd in May and the all-time high of 11.5 bcfd in April. Traders noted LNG feedgas was down due to short maintenance work at Gulf Coast export plants and the pipelines that provide them with fuel. U.S. pipeline exports to Mexico, meanwhile, averaged 6.54 bcfd so far in June, which would top the 6.11-bcfd average in May and the all-time high of 6.14 bcfd in April, according to Refinitiv data.
Natural Gas Futures Rally as Euro Model Posts Large CDD Increase -- Rising cooling demand expectations in recent weather model runs had natural gas futures rebounding sharply in early trading Tuesday. The July Nymex contract was up 9.2 cents to $3.162/MMBtu at around 8:50 a.m. ET. After settling 2.7 cents lower at $3.070 in Monday’s session, the July contract “quickly rebounded” in after hours trading following a run of the European weather model that showed a large increase in projected cooling degree days (CDD), analysts at EBW Analytics Group said. The CDD increase resulted from projections for weaker cooling in the Midwest and East next week, according to the firm. “Overnight, the European model kept its late-day gains, and the American, while still cooler, posted its own large gain,” the EBW analysts said. “With both models now warmer than during the regular trading session yesterday, the July contract is poised to rise further this morning.” According to NatGasWeather, the American weather model added 7 CDD in its overnight run. However, the model showed a pattern that “still wasn’t quite hot enough June 15-20 due to a barrage of weather systems tracking across the Great Lakes and East,” the firm said. “…It’s this rather comfortable pattern over the Great Lakes and eastern third of the U.S. June 15-20 that makes the pattern not as impressive as needed to be considered solidly bullish. But it’s apparently hot enough to satisfy, with prices at multi-week highs.” Production and liquefied natural gas feed gas demand levels are “the most bearish they’ve been in more than a month,” NatGasWeather said. After this week’s heat it’s “debatable” whether the temperature outlook is “hot enough” given the cooler projections from the American model starting around mid-June.
US working natural gas volumes in underground storage increase by 98 Bcf: EIA | S&P Global Platts -Storage inventories increased 98 Bcf to 2.411 Tcf for the week-ended June 4 the US Energy Information Administration reported June 10. The build was more than the 95 Bcf addition expected by an S&P Global Platts' survey of analysts, as well as the five-year average build of 92 Bcf, according to EIA data. Storage volumes now stand 383 Bcf, or 13.7%, less than the year-ago level of 2.794 Tcf and 55 Bcf, or 2.2%, less than the five-year average of 2.466 Tcf. The injection matched the 98 Bcf added to inventories for the week prior. Month-to-date total feedgas deliveries have averaged 10.1 Bcf/d, slightly below the June forecast of 10.4 Bcf/d, according to S&P Global Platts Analytics. When available, US LNG export facilities are expected to run at full utilization, about 11 Bcf/d, as netbacks into JKM and TTF remain wide open at $5/MMBtu and $4/MMBtu, respectively, through the end of the year. The NYMEX Henry Hub July contract added 2 cents to $3.147/MMBtu in trading following the release of the weekly storage report on June 10. The balance-of-summer contract strip was trading higher by roughly 3 cents/MMBtu for an average of $3.175/MMBtu, while the winter 2021-22 strip was up 2 cents on the day, trading at $3.323/MMBtu. Platts Analytics' supply and demand model currently forecasts a 56 Bcf injection for the week ending June 11, which would measure 31 Bcf less than the five-year average as gas-fired power generation draws on supply. Summer appears to be fully underway during the week in progress, with power burn demand rising by more than 7 Bcf/d on the week. The effects of that were dulled by a 2.4 Bcf/d drop in residential and commercial demand, and a 1.7 Bcf/d drop in LNG feedgas demand thought to be linked to annual maintenance taking place at certain liquefaction plants on the Gulf Coast. Amid fairly substantial changes in the various demand sectors, total US demand has seen a net increase of about 2.6 Bcf/d week over week. Supply, on the other hand, has been mostly stagnant, with nearly all of the week's 900 MMcf/d increase in total US supplies the result of an increase in imports from Canada. Sample storage fields across the Lower 48 injected 20% less gas into storage for the week ending June 11, falling from an injection of 47 to 37 Bcf. Temperatures in the East and Midwest climbed by more than 13 degrees degrees week over week, pushing up local power burn demand and cutting into the volumes available for storage. The tighter injections in major demand regions were partially offset by small gains in the West, which saw a bit of a reprieve from the ongoing heat wave
Temps, Appalachian Supply Worries Keep Heat on Natural Gas Forwards - Big basis moves in Appalachia and on the West Coast highlighted natural gas forwards trading during the June 3-9 period, while a sufficiently hot forecast helped propel a broader move higher for the Lower 48 overall, according to NGI’s Forward Look. Fixed prices for July delivery were higher week/week by around 10-15 cents at numerous locations, with benchmark Henry Hub gaining 8.8 cents to average $3.130/MMBtu. Forecasts teasing June heat, along with the prospect of Appalachian supply disruptions, helped stoke the fire that saw July Nymex futures rise during the period. On Thursday, the front month continued to nudge higher, going on to settle at $3.149, up 2.0 cents day/day. The potential duration of a pressure reduction on the Texas Eastern Transmission Co. (Tetco) system required by the Pipeline and Hazardous Materials Administration (aka PHMSA) remained unclear, EBW Analytics Group analysts told clients in a research note earlier in the week. According to the firm, the Tetco restrictions stood to constrain regional exports out of Appalachia by as much as 1.0 Bcf/d. “If new information suggests it is likely that outages may last for several months, natural gas could quickly move higher,” the EBW analysts said. Energy Aspects in a recent note said rerouting options for Northeast-to-Gulf Coast volumes implied “minimal impact to production” from the Tetco constraints. However, maintaining 0.9-1.0 Bcf/d of capacity between the Tetco M-2 and M-1 zones, compared to 2.1 Bcf/d design capacity, will be “critical to prevent any future production curtailments.” This presents “a real risk of Appalachia production curtailments this month if M-2 to M-1 capacity falls below this critical level,” Energy Aspects said. Meanwhile, Wood Mackenzie observed a “significant” 1.2 Bcf/d decline in Northeast production from Monday (June 7) to Tuesday (June 8) in its daily pipe estimates, attributable to pigging on the Columbia Gas Transmission system and compressor station maintenance on Equitrans Gas Transmission.
Natural Gas Futures Prices Go ‘Bonkers’ as Tetco Restrictions Seen Lasting Through Summer - After a week of only modest changes along the Nymex futures curve, price action on Friday was anything but, as a major natural gas pipeline warned that restrictions it has in place could last through the end of September. The July Nymex gas futures contract started climbing overnight and continued to surge throughout the day, closing the week at $3.296, up 14.7 cents from Thursday’s close. August prices rose 14.5 cents to $3.311. Spot gas action was just as significant. Stout gains across much of the country overshadowed losses in the Northeast amid a return of cool weather. NGI’s Spot Gas National Avg. climbed 16.0 cents to $3.060. Nymex gas prices had maintained the $3.00 handle for more than a week even as summer heat failed thus far to be sustained across the country for more than a few days. However, market observers said prices would struggle to gain much ground without more hot weather, or some other supportive factor like a recovery in liquefied natural gas (LNG) demand. Instead, Texas Eastern Transmission Co. (Tetco) delivered the bullish catalyst. In a posting to its electronic bulletin board shortly before 6 p.m. ET Thursday, Tetco said a 20% pressure reduction that began this month on part of its 30-inch diameter system — required by a Pipeline and Hazardous Material Safety Administration (PHMSA) order — could last until late in the third quarter. The restrictions were put in place after Tetco reported an anomaly that was identified during recent inspections. PHMSA is working to further evaluate the findings of inspections and how they could impact other Line 10 and Line 15 segments along the system. Tetco said it is continuing to meet regularly with PHMSA and is in the process of conducting an engineering analysis to support a return to service. The pipeline said it “understands the importance of returning its system back to full service as soon as possible, and endeavors to provide a more exact timeframe and potential scope of work by the end of the month.” In a Friday note to clients, Bespoke Weather Services said as soon as the Tetco news was issued, things went “bonkers in the natural gas market.” Based on market chatter that some of the gas may be rerouted, Bespoke questioned whether the rally was an “overreaction, especially in light of supply/demand balances not being impressive of late.” The market was shrugging off the looseness, even before the Tetco issues first surfaced, “but it is honestly difficult to have much of an edge here, given that this issue is not clear cut yet,” according to Bespoke. “Weather remains generally hot,” with some risk of cooler weather for a brief period in the next few days. However, the market is “definitely pricing in a lot of bullish news up here,” Bespoke said. “Obviously, if the Tetco issue winds up less significant than what the market currently expects, we will fall.”
New infrastructure connects West Texas natural gas-producing areas to demand markets - (EIA) Recently completed pipeline projects in Texas and Mexico have increased natural gas transportation capacity from the Waha Hub—located near Permian Basin production activities in West Texas—to the U.S. Gulf Coast and Mexico. Since October 2020, two completed projects in Texas and two completed projects in Mexico have increased the Waha Hub’s connectivity to demand markets and, in turn, reduced the price difference between natural gas at the Waha Hub and the Henry Hub.Recently completed projects include:
- Kinder Morgan’s 2.1 billion cubic feet per day (Bcf/d) Permian Highway Pipeline (PHP) entered service in January. It delivers natural gas from the Waha Hub to Katy, Texas, located near the Texas Gulf Coast, and also connects to Mexico.
- Whitewater/MPLX’s Agua Blanca Expansion Project entered service in late January. It connects to nearly 20 natural gas processing sites in the Delaware Basin and can move 1.8 Bcf/d of natural gas to the Waha Hub. By the third quarter of 2021, the project will likely expand to connect with the Whistler Pipeline to move an additional 2.0 Bcf/d of natural gas from the Permian Basin to the Texas Gulf Coast.
- Fermaca’s 0.9 Bcf/d Villa de Reyes-Aguascalientes-Guadalajara pipeline began commercial operations in October 2020. The pipeline, located in Central Mexico, is the final segment of the Wahalajara system, which connects the Waha Hub to Guadalajara and other population centers in west-central Mexico.
- Carso Energy’s 0.5 Bcf/d Samalayuca-Sásabe pipeline began commercial flows of natural gas in late January. The pipeline provides a more direct route for natural gas from the Permian Basin to northwest Mexico.
The additional takeaway capacity from these recently completed projects has contributed to a nearly 10% increase in U.S. pipeline exports to Mexico since last March. According to the latest Natural Gas Monthly, exports to Mexico totaled 5.9 Bcf/d in March 2021. Additional takeaway capacity has also helped increase the natural gas price at the Waha Hub, narrowing its price difference (also known as the basis) to the Henry Hub. Over the past few years, constrained takeaway capacity in the Permian Basin kept Waha prices consistently at $1 per million British thermal units (MMBtu) or more below the Henry Hub price. The Waha-Henry Hub basis began narrowing in late October 2020. From March through May of this year, the Waha Hub price averaged $0.22/MMBtu less than the Henry Hub price, following a February cold snap in Texas that temporarily sent Waha prices to a record high.
Small Number of Permian Oil and Gas Sites Are Releasing Large Amounts of Methane A relatively tiny number of Permian oil and gas sites are responsible for a wildly disproportionate amount of methane pollution, a new study from Methane Source Finder found.The research, a joint project of NASA, the University of Arizona and Arizona State University, revealed just 123 of the 60,000 sites (0.205%) surveyed in the month-long study accounted for 29% of the region's methane pollution — largely from leaks that are typically easy to repair.Methane traps 80 times more heat in the atmosphere than CO2 over a 20 year period, and the research echoes an analysis of EPA data released last week that found the 195 smallest U.S. oil and gas extractors were responsible for 22% of total emissions, despite only accounting for 9% of production.The Trump administration weakened methane leak detection and repair requirements in its final months and the Senate, though not the House, has taken action to reinstate the Obama-era protections.
U.S. regulator tells pipeline operators to prepare methane curbs (Reuters) - The U.S. Department of Transportation's pipeline regulator on Monday sent an advisory to oil and gas pipeline operators directing them to update their inspection and maintenance plans for curbing the release of potent greenhouse gas methane, as part of the Biden administration's broader effort to combat climate change. The DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) submitted the advisory bulletin to prod companies to begin to comply with the PIPES Act, a law signed at the end of 2020, that created dozens of new regulatory mandates for the agency including the oversight of methane leaks by natural gas pipelines and transmission systems. “Minimizing methane emissions from pipelines will help improve safety and combat climate change, while creating jobs for pipeline workers,” said PHMSA Acting Administrator Tristan Brown. “Pipeline operators have an obligation to protect the public and the environment by identifying and addressing methane leaks.” Methane has a much higher heat-trapping potential than carbon dioxide and its concentrations in the atmosphere have been rising rapidly in recent years, alarming world governments seeking to cap global warming under the 2015 Paris Agreement on climate change.Since the requirements enshrined in the PIPES Act are new and will not be enforced until the end of the year, the bulletin takes the first step of delineating what is expected of the operators, a Biden administration official said. The bulletin tells operators that they must have inspection and maintenance plans in place by the Dec. 27 to minimize methane emission releases and repair or replace outdated leaking pipes, and makes clear that the agency will enforce these requirements in January 2022.
El Paso Electric’s Newman 6 project to go before judge – An administrative law judge ruled Thursday that the Sierra Club and a citizen group from Chaparral, N.M., can move forward to challenge the state of Texas’ pending approval of a permit for El Paso Electric’s proposed gas plant. The Chaparral Community Coalition For Helping the Environment includes people who live within two miles of the proposed plant in New Mexico and oppose the expansion of the power plant, citing health concerns for an area that’s already under scrutiny for air pollution. The contested hearing has not been scheduled yet, but is required by state law to occur before a 180-day deadline on Nov. 30. The hearing before the State Office of Administrative Hearings stems from the Texas Commision on Environmental Quality’s decision to approve the application by El Paso Electric to build the natural gas plant in Northeast El Paso. On Thursday, Administrative Law Judge Rebecca Smith ruled that the Chaparral Community Coalition For Helping the Environment and the Sierra Club had standing to continue as parties, while local environmental nonprofit Eco El Paso did not. She allowed all the attorneys for all parties to work on negotiating a schedule for the upcoming hearings.
Oil commission approves rule change forbidding spills --The Oil Conservation Commission approved a rule change Thursday that will forbid drillers from spilling oil and toxic liquids — an amendment that activists and affected residents said would help prevent the pollution from occurring. The rule will be adopted July 8. The state Oil Conservation Division, which regulates oil and gas activity, partnered with the environmental group WildEarth Guardians to propose the rule change. Conservationists, community activists, regulators and industry groups all backed it. New Mexico had no rule barring operators from spilling oil or “produced water,” the toxic liquid byproduct from hydraulic fracturing. Instead, companies were required to report a spill and then work with regulators to clean it up. Critics called the system grossly inadequate — especially in a state with one of the nation’s largest fossil fuel industries — saying it was reactive rather than preventive. “This is a big, big deal,” said Jeremy Nichols, WildEarth Guardian’s climate and energy program director. “We want to make sure there’s an incentive for industry to keep these releases from happening in the first place.” The new rule will give the division more authority to impose penalties on violators. “We hope the Oil Conservation Division will use this new authority to benefit the citizens and environment of New Mexico,” said Joe Zupan, executive director of Amigos Bravos, a Taos-based water advocacy group. But during a public hearing Wednesday, some people called for adding language that explicitly gives the agency enforcement power and specifies fines and other punishments for spills. Some expressed concern the rule says the agency may take enforcement action rather than it shall. “Prohibiting something without enforcing that rule is meaningless,” said Gail Evans, an attorney at the New Mexico Environmental Law Center. But Nichols said how the agency will penalize polluters is a question for another day.
Oil Patch Lifts US Rig Count Once Again as Natural Gas Activity Eases Lower More rigs flocked to the oil patch during the week ended Friday (June 11), offsetting a small decrease in natural gas-directed drilling to lift the combined U.S. count five units to 461, according to the latest data published by Baker Hughes Co. (BKR). Oil-directed drilling increased by six units in the United States for the week, while the total number of domestic natural gas rigs decreased by one. The combined 461 U.S. rigs active as of Friday compares with 279 rigs running in the year-ago period, according to the BKR numbers, which are based partly on data from Enverus. Land drilling increased by five rigs domestically for the week, while the Gulf of Mexico remained unchanged with 13 rigs. Horizontal drilling increased by five units for the week; vertical units increased by one, while directional rigs declined by one overall. The Canadian rig count increased by 16 rigs week/week — all oil-directed — to reach 93 as of Friday. That’s up sharply from 21 active rigs at this time last year. Broken down by play, the Permian Basin saw the largest net increase for the week, adding four rigs to raise its total to 236, up from 137 in the year-ago period. Elsewhere, the Haynesville Shale added one rig. The Utica Shale saw two rigs exit. Broken down by state, Texas and Wyoming each added three rigs, while New Mexico picked up two rigs during the period. One rig was added in West Virginia. Meanwhile, two rigs departed Ohio for the week, while Alaska and Pennsylvania each saw one rig exit overall, according to the BKR numbers.
Activists Protest Against Line 3 as Enbridge Accelerates Pipeline Construction -Thousands of people from across the nation traveled to northern Minnesota this past weekend to join Indigenous leaders in what organizers described as the "largest resistance yet" to Line 3, an Enbridge-owned tar sands pipeline whose construction has accelerated in recent days as opponents warn the project poses a threat to waterways and the climate.The Treaty People Gathering kicked off Saturday, the first of several expected days of action against Enbridge's multi-billion-dollar project, which aims to replace and expand the Canadian company's existing pipeline along a route that crosses more than 200 bodies of water and 800 wetlands.If completed, the pipeline would have the capacity to carry more than 750,000 barrels of tar sands oil per day from Alberta, Canada to Wisconsin.Indigenous leaders have decried the pipeline expansion as a brazen violation of treaty rights that endangers sacred land. Attempts to block the pipeline in court have yet to succeed, leading Line 3 opponents to turn their focus to large-scale protests and civil disobedience."We need to protect all that we have left of the sacred gifts and land," said Dawn Goodwin of the Indigenous-led RISE Coalition. "I said that I would do all that I could. And I have done all that I could in the legal system, thus far following that process. Now, they have failed us through regulatory capture and corporate financing. So now we need you."The latest major demonstrations against Line 3 are expected to begin on Monday, with prominent environmentalists such as Jane Fonda and Bill McKibben slated to join Winona LaDuke, Tara Houska, and other Indigenous activists in protesting the spill-prone pipeline."Our Mother needs us to be brave, to give voice to the sacred and future generations," Houska, founder of the Giniw Collective, said in a statement. "We've elevated the national profile of Line 3 through people power. [President Joe] Biden hears our voices, but the wetlands and wild rice need action.""We cannot mitigate the climate crisis and we cannot stand idly by as DAPL and Line 5 fossil fuels flow illegally, as young people chain themselves to the Mountain Valley pipeline and Line 3," Houska continued. "Stand up for what is right, stand up for those not yet born."
Oil pipeline foes protest Enbridge's Line 3 in Minnesota (AP) — Hundreds of protesters vowing to do whatever it takes to stop a Canadian-based company’s push to replace an aging pipeline blocked a pump station Monday in northern Minnesota, with some people chaining themselves to construction equipment before police began making arrests. Environmental and tribal groups say Enbridge Energy’s plan to rebuild Line 3, which would carry Canadian tar sands oil and regular crude from Alberta to Wisconsin, would worsen climate change and risk spills in sensitive areas where Native Americans harvest wild rice, hunt, fish, gather medicinal plants, and claim treaty rights. By evening, at least 30 people were arrested by state police and sheriff’s officers, but the number “is growing rapidly,” Ashley Fairbanks, a spokeswoman for Treaty People Gathering, told The Associated Press. None of them appeared to resist as allies chanted “We love you.” Protesters said the Treaty People Gathering was the largest show of resistance yet to the project. The crowd showed no signs of leaving hours after an earlier protest at the headwaters of the Mississippi River, roughly 20 minutes away, where they chanted “Stop Line 3!” and “Water is life!” “This is important. This is what we need,” actress Jane Fonda told the AP at the rally, motioning toward the crowd as she held signs with President Joe Biden’s image that said, “Which side are you on?” She urged protesters to keep pressuring Biden to halt construction so his administration can study any harm to the environment and indigenous people. The Mississippi River is one of the water crossings for the pipeline. Fonda said Line 3 protesters “are going to Standing Rock this place,” referring to the Dakota Access pipeline, which is owned by a different company and was the subject of major protests near the Standing Rock Indian Reservation in the Dakotas in 2016 and 2017. Activists said they were pitching tents at the pump station site Monday night, and an AP reporter saw people rolling a large wooden spool that holds wire into a pile of trees and twigs. Police were directing traffic. Elizabeth Claggett-Borne, 55, of Cambridge, Massachusetts, sat in a beach chair perched in front of a boat blocking the entrance to the work site. She was equipped with a homemade device made of rebar, PVC pipe and handcuffs, in order to make it more difficult for authorities to remove her from the site. “We’re just foot soldiers,” she said. “But we’re here to stay.” Minnesota Public Radio News reported that a Border Patrol helicopter at one point hovered about 20 feet (6 meters) off the ground, blowing up sand and dirt, to try to get protesters to leave. Enbridge said that 44 workers were evacuated from the site in an effort to de-escalate the situation. In a written statement, the company said it “hoped all parties would come to accept the outcome of the thorough, science-based review and multiple approvals of the project.” Spokeswoman Juli Kellner said the company will assess potential damage once it can safely reenter the site.
Dawn Goodwin and 300 Environmental Groups Consider the new Line 3 Pipeline a Danger to All Forms of Life --Leeches love Northern Minnesota. The “Land of 10,000 Lakes” (technically, the state sports more than 11,000, plus bogs, creeks, marshes and the headwaters of the Mississippi River) in early summer is a freshwater paradise for the shiny, black species of the unnerving worm. And that’s exactly the kind local fisherman buy to bait walleye. People who trap and sell the shallow-water suckers are called “leechers.” It’s a way to make something of a living while staying in close relationship to this water-world. Towards the end of the summer, the bigger economic opportunity is wild rice, which is still traditionally harvested from canoes by “ricers.” When Dawn Goodwin, an Anishinaabe woman who comes from many generations of ricers (and whose current partner is a leecher), was a young girl, her parents let her play in a canoe safely stationed in a puddle in the yard. She remembers watching her father and uncles spread wild rice out on a tarp and turn the kernels as they dried in the sun. She grew up intimate with the pine forests and waterways around Bagley, Minnesota, an area which was already intersected by a crude oil pipeline called “Line 3” that had been built a few years before she was born. Goodwin is 50 now, and that pipeline, currently owned and operated by the Canadian energy company Enbridge, is in disrepair. Enbridge has spent years gathering the necessary permits to build a new Line 3 (they call it a “replacement project”) with a larger diameter that will transport a different type of oil—tar sands crude—from Edmonton, Aberta, through North Dakota, Minnesota and Wisconsin, terminating at the Western edge of Lake Superior where the thick, petroleum-laced sludge will be shipped for further refining. Despite lawsuits and pushback from Native people in Northern Minnesota and a variety of environmental groups, Enbridge secured permission to begin construction on Line 3 across 337 miles of Minnesota last December. The region is now crisscrossed with new access roads, excavated piles of dirt, and segments of pipe sitting on top of the land, waiting to be buried. Enbridge has mapped the new Line 3 to cross more than 200 bodies of water as it winds through Minnesota. Goodwin wants the entire project stopped before a single wild rice habitat is crossed. “Our elders tell us that every water is wild rice water,” Goodwin said on Saturday, as she filled up her water bottle from an artesian spring next to Lower Rice Lake. “Tar sands sticks to everything and is impossible to clean up. If there is a rupture or a spill, the rice isn’t going to live.”
Opponents take stand against Enbridge Line 3 - Indian Country Today — The Mississippi River, or Great River in the Ojibwe language, is barely three feet in width near its headwaters in northern Minnesota. Tender and vulnerable, it meanders across the landscape with no hint at its greatness farther south. It’s here near the river’s headwaters that Enbridge is completing construction on the Line 3 pipeline and its numerous crossings under the river. And it’s here that hundreds of water protectors and supporters are making a stand Monday opposing the project. Numerous environmental, faith and Indigenous groups organized the Treaty People Gathering this weekend, describing it as the largest act of resistance so far to the pipeline. Attendees are encouraged to “put their bodies on the line to stop construction and tell the world that the days of tar sands are over,” according to the Treaty People Gathering website, Organizers and participants met all weekend on the White Earth Reservation learning about the importance of treaties and the Ojibwe connection to the area, hearing speeches from faith leaders and water protectors and preparing and planning acts of civil disobedience. During a brief visit to the Treaty People Gathering camp that was closed to the media, Indian Country Today counted about 600 people; it’s unclear how many will participate in actions opposing the pipeline Monday. Water protectors have expressed concern over local law enforcement’s use of “kettling” tactics to arrest people participating in civil disobedience during past actions. According to one of the gathering’s organizers who spoke on condition of anonymity, the U.S. Department of Justice sent two liaisons to meet with pipeline opponents to hear their concerns about use of the controversial law enforcement tactic. The Department of Justice public affairs office did not respond to Indian Country Today’s telephone calls or email seeking comment. Often used during the Black Lives Matter protests, “kettling” involves police corralling protesters and preventing them from leaving before making arrests or issuing citations. Several opponents including the Minnesota Department of Commerce, several of the state’s Ojibwe tribes and environmentalists have argued in court that a need for the pipeline has not been proven and that it poses significant environmental risks to sensitive areas.
Line 3 opponents occupy Enbridge pump station as protest ramps up - For several years now, environmental and tribal groups battling the Line 3 oil pipeline have fought the project in front of state regulators, in the courts and on the streets.They've dotted the route with resistance camps, and they've chained themselves to branches of banks with ties to the project.Their opposition so far hasn't stopped the pipeline. Enbridge Energy says it is more than halfway through building the $4 billion project across northern Minnesota.So now activists are taking their protest to the next level.On Monday morning, hundreds of people trespassed onto the Two Inlets pump station site a few miles south of Itasca State Park to protest the ongoing construction of the new pipeline, which will replace a line that's been carrying Canadian tar sands oil across northern Minnesota since the 1960s. Dozens locked themselves to bulldozers, excavators and other construction equipment using devices known as sleeping dragons, so law enforcement wouldn't be able to easily cut them free.“To see people engaging in personal risk like this, and to see so many young people and folks of all walks of life, it's so beautiful and powerful,” said Tara Houska, founder of the Giniw Collective, one of dozens of groups that organized the week’s actions. “It's an incredible moment.” The Indigenous-led, multiday event, called the Treaty People Gathering, began over the weekend and is expected to reach into the week, with prayer, marches and direct action. Organizers say they hope to draw attention to the fight against the pipeline that they argue will exacerbate climate change and threaten the waters of treaty lands in northern Minnesota.Their goal is to push the Biden administration to stop the Line 3 project, as it did the Keystone XL pipeline. “Without direct action, and people engaging in personal risk,” Houska said, “the pressure just isn't there.” One of the activists, a young woman who didn't want to give her name because she was risking arrest, lay flat on her back, locked together with another person to a hydraulic construction lift.This type of protest has several goals, she said. "One is to to shut it down to shut down work, which we've successfully done,” the woman said, “and to cost Enbridge time and money and to raise a lot of awareness about the urgency of stopping this pipeline and get as much attention drawn to it as we can." But company spokesperson Juli Kellner said stopping work at one pump station for a day won’t have a huge impact on the overall project."We have five active construction zones with multiple construction sites in each zone, and having one shut down is not necessarily impactful in the large view of the project,”
Pipeline protesters seize Minnesota construction site in bid to stop $4 billion project - – The young climate activists met at the windmill shortly after sunrise. There were several missions underway on Monday morning but “marmalade” and “peanut butter” were particularly high risk. Protesters using those code names planned to descend on an undisclosed location along a pipeline route known as Line 3. They were ready for arrests. Dozens of cars were soon caravanning down dusty dirt roads amid corn and soybean fields in the largest salvo yet in an ongoing civil disobedience campaign to try to stop a border-crossing oil pipeline running from Canada across the wetlands and forests of northern Minnesota. By midmorning, hundreds of protesters, led by Native American women and joined by celebrities such as Jane Fonda and Catherine Keener, had marched into a construction site operated by Enbridge, the Canadian company behind the pipeline, and strapped themselves to bulldozers and other heavy machinery. “Good morning water protectors!” Tara Houska, a Native American lawyer and a leader of the Line 3 protests, shouted to the group as she banged a drum and crossed into a pump station that organizers said is used to electrify the pipeline. The intensifying conflict over Line 3 has been driven in part by Indigenous activists who see a double-barreled threat in the pipeline: a carbon-producing fossil fuel project at a time of worsening climate change and one that also risks polluting tribal lands in the headwaters of the Mississippi River. Emboldened by some victories – such as the cancellation of the Keystone XL pipeline, and the gatherings at Standing Rock – protesters hope to intensify pressure on the Biden administration to suspend the pipeline permit before the project is completed. “[President Joe] Biden has taken a very clear and very beautiful position on the climate crisis,” Fonda, who was making her second trip to protest Line 3, said in an interview. “But we are really facing a potential catastrophe, and the science is very clear: it’s not enough to do something good here – like shutdown Keystone XL, shut down drilling on the Arctic national refuge – and then allow Line 3 to go through.” “We can’t do this in bits and pieces,” she said. So far, the activism has done little to impede the $4 billion project, which is a replacement of a decades-old pipeline, although portions of it travel a new route. About 60% of the 350-mile Minnesota portion of the new Line 3 has been built and some 4,000 construction workers – and growing – are at work on five different areas of the project, according to Enbridge officials. The ongoing protests haven’t “had a significant impact on construction,” said Paul Eberth, Enbridge’s director of tribal engagement in the United States. “Obviously it’s stressful when people are out protesting or if they’re doing damage to equipment or being disrespectful for the workforce.” “Construction largely has proceeded as planned,” he said. The Line 3 pipeline is about 1,000 miles long and runs from Alberta, Canada, to Superior, Wis., one of a network of pipelines the company operates in the Midwest. There have been disputes over other Enbridge pipelines: In November, Democratic Gov. Gretchen Whitmer ordered a nearly 70-year old pipeline called Line 5 in Michigan to be shut down over concern about impacts to the Great Lakes. Enbridge said Line 3 has “passed every test” in six years of regulatory and permitting review including 70 public comment meetings. Company officials also say they have taken extensive input from tribal nations – including some directly impacted tribes who support the pipeline – and about 500 Native Americans have worked on the project.
Thousands Came to Minnesota to Protest New Construction on the Line 3 Pipeline. Hundreds Left in Handcuffs but More Vowed to Fight on. - Inside Climate News—The trickle of activists began on Thursday but it quickly grew into a stream that filled northern Minnesota campgrounds surrounding the Mississippi River headwaters over the weekend. By Monday night, some 200 protesters had been arrested as they attempted to stop the construction of Enbridge’s Line 3 replacement project. Many had chained themselves to pipeline construction equipment hoping to delay a project that they say would lock Minnesota—and the nation—into decades of continued burning of some of the world’s dirtiest oil and threatens the pristine waterways that many Indigenous people depend on for their livelihoods.“This is just the beginning,” said Winona LaDuke, an Anishinaabe woman and longtime Indigenous activist who has been fighting the project since it was first proposed in 2014, according to the Star Tribune.The Treaty People Gathering was organized by a coalition of Native rights groups and environmental organizations that intended “to put our bodies on the line, to stop construction and tell the world that the days of tar sands pipelines are over.”In a written statement Monday, the company said that it was “disheartened” by the protest’s disruption and “destruction” at its worksite. But as the four-day event wound down on Tuesday and skirmishes between police and activists quieted, Indigenous leaders vowed to continue their protests.Enbridge is now moving to revive construction after being delayed by a muddy spring. And as protesters redouble their efforts to stop Line 3, they are being met with equally intensifying resistance from police who are carrying out the will of state policymakers who have long resisted calls to transition the U.S. economy to clean energy.Over the last four years, 15 states have adopted new laws that increase the penalty for trespassing on critical infrastructure like oil pipelines. Five other states, including Minnesota, are considering similar measures, which have become growing points of political tension between progressives and conservatives in the country’s cultural wars. Those tensions played out Monday as encounters between police and protesters became increasingly hostile. Federal officials are reportedly investigating the use of a low flying helicopter that activists said was meant to intimidate them, according to media reports. The New York Times reported that authorities also appeared to use a Long Range Acoustic Device, or LRAD, to drive protesters away with noise. The hostilities were reminiscent of the 2016 Standing Rock protests, where police were filmed using attack dogs, spraying water cannons and firing rubber bullets on Indigenous and environmental activists who attempted to stop the construction of the Dakota Access Pipeline in North Dakota. But for some of the protesters in northern Minnesota this week, the aggressive police tactics only compounded the sting of failing to stop the Dakota Access Pipeline. “People forget that we lost that fight,”
Low-Flying DHS Helicopter Showers Line 3 Protests With Debris -- The largest civil disobedience yet against new pipeline construction in Minnesota was met by a furious response — and a cloud of debris. A Department of Homeland Security Border Patrol helicopter descended on the protest against the Enbridge Line 3 tar sands pipeline, kicking up dust and showering demonstrators with sand, in an unusual attempt to disperse “I perceive this to be a tactic they utilized to deter people from arriving in large masses. That’s not safe.” the crowd. “I couldn’t see because it got in my eyes,” said Big Wind, a 28-year-old Northern Arapaho organizer with the anti-pipeline Giniw Collective, who was there when the helicopter swooped over the civil disobedience action. “After it pulled up there were a lot of people who were ducking, who were in the fetal position, just because they didn’t know what was going to happen and were trying to protect themselves from the sand.” The low-flying federal helicopter is an early signal of how law enforcement in Minnesota will deploy more than a year’s worth of training and preparations against what pipeline opponents have promised will be a summer of resistance. The tactic — which was criticized because of the extremely low flyover — suggests that the multiagency law enforcement coalition overseeing the police response is willing to bend safety standards in order to break up demonstrations. Pipeline opponents, who identify as water protectors, say the point of the helicopter’s activity seemed to be to use the dust to intimidate and scatter the crowd. Big Wind said they heard no dispersal order coming from the helicopter. “I perceive this to be a tactic they utilized to deter people from arriving in large masses,” they said. “That’s not safe.” Authorities later claimed that the helicopter was being used to make an announcement for demonstrators to disperse, but the announcement was inaudible to many demonstration participants. “There were rumors that it was saying something, but I couldn’t hear anything,” said Kate Sugarman, a 60-year-old pipeline opponent who was standing on the public road when the helicopter arrived. “To those of us on the ground it felt like a scary encounter, and it was not a way to easily send a message.”
Officials: More than 200 arrested in northern Minnesota Line 3 protests | MPR News -- Hundreds of people blocked access to an Enbridge pipeline pumping station being built a few miles south of Itasca State Park during a day of protests Monday.Some locked themselves to construction equipment on the Two Inlets pump station site or to a boat that protesters were using to block a road that leads to the station.A total of 247 people were arrested, according to a release from the Northern Lights Task Force, a coalition of northern Minnesota law enforcement agencies created to address pipeline-related protests. The task force said 179 people were arrested and booked into area detention centers. An additional 68 people were cited and released.The statement said most were charged with gross misdemeanor trespass on critical infrastructure, or public nuisance and unlawful assembly.A few dozen protesters have continued to camp along the Mississippi River about 20 miles east of the pump station site. The location marks a spot where Line 3 is slated to cross the river, a few miles from the headwaters.A forklift sits with flat tires after activists let air out of the tires inside of an Enbridge Line 3 pump station near Park Rapids, Minn., on Monday.Since Monday, the protesters, who call themselves water protectors, have erected tents along the pipeline’s path. The camp was erected as part of a multi-day, Indigenous-led protest against the Line 3 project called the Treaty People Gathering. The event included prayers, marches and direct action to protest the pipeline.
A Biden Climate Test on the Banks of the Mississippi -–Bill McKibben -The backstory is that a big Canadian company, Enbridge, has been trying to expand and replace a pipeline, called Line 3, that runs across northern Minnesota. It would be about the same size as the now vanquished Keystone XL pipeline, and carry seven hundred and sixty thousand barrels of regular crude and tar-sands oil from Canada each day. (Enbridge characterizes the project as a “replacement” of the existing pipeline, but it will double the current capacity.) Most of the activists are Indigenous, led by groups such as Honor the Earth and the Giniw Collective, and many of those are led by remarkable women—Winona LaDuke, Tara Houska, and Dawn Goodwin, among many others. They have waged a stout campaign through a bitter Midwestern winter, but it has been hampered by the pandemic. Now vaccines have freed others to join them, and Monday was the first big mobilization. . In 2015, the Obama Administration, with Joe Biden as Vice-President, pulled the permits for Keystone XL, because it failed the White House’s climate test. “America’s now a global leader when it comes to taking serious action to fight climate change,” President Obama said. “And, frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face—not acting.” So why would the Biden Administration let a pipeline of almost the same size, carrying tar-sands oil, proceed? Since 2015, the United States has joined (and rejoined) the Paris climate accord, promising to hold temperature increases to as close to 1.5 degrees Celsius as possible, and the world’s climate scientists have explained that this means cutting emissions forty-five per cent by 2030. And we’ve seen the hottest year, the worst wildfire season in the American West, the biggest Atlantic storm season, and the highest temperature ever reliably recorded in America. Meanwhile, the price of solar power has dropped by half in the past decade. So, if the KXL failed the climate test six years ago, how could Line 3 pass it today? Enbridge told the Times that it has “passed six years of regulatory and permitting review.” But this most basic climate question has never been answered: How does increasing the flow of tar-sands oil not make progress in cutting emissions more difficult?
Native American contractors' letter seeks end to protests over Line 3 pipeline -– Native American contractors working on the controversial Enbridge Line 3 pipeline across Minnesota say the Indigenous-led protests that escalated Monday do not speak for them. "Protests that disrupt work, damage property and threaten our employees while claiming to be on behalf of our Native people is creating additional tension and consequences within our tribal communities," six contractors wrote in a letter being sent to Minnesota tribal leaders this week. "They also intentionally create a false narrative that there is no Native American support for this project and the economic impacts and opportunities it brings to our people." Thousands of people gathered near the Mississippi River headwaters over the weekend, culminating in both a peaceful march and an occupation at a pump station construction site that resulted in hundreds of arrests and citations. As protesters locked themselves to equipment and blocked the access road with debris, Enbridge said it evacuated 44 employees, 10 of whom work for White Earth Reservation-based Gordon Construction. Owner Matt Gordon was one of those who signed the letter calling for "leaders of tribal communities across Minnesota to renounce these actions and call on these groups to stop future destructive and unlawful protests that endanger our Native workers and divide the communities in which we work and live." The White Earth, Red Lake and Mille Lacs bands have steadfastly opposed Line 3, which will cost Enbridge well more than $3 billion. The Fond du Lac Band of Lake Superior Chippewa did as well until regulators approved the pipeline and the band opted for a deal with Enbridge to allow the new Line 3 on its land. The Leech Lake Band of Ojibwe supported the new Line 3 in order to get the 50-year-old, deteriorating Line 3 extracted from its land. (The new pipeline runs partly on a new route outside of the Leech Lake reservation.) Two smaller Ojibwe bands have not taken a stance on the pipeline.
ENERGY TRANSITIONS: What pipeline protests reveal about Biden's oil plan -- Wednesday, June 9, 2021 -- A major pipeline protest in the Midwest wound down yesterday as White House climate envoy John Kerry endorsed pipelines. What do the moves reveal about the Biden administration?
Biden’s Climate Chief Plans Oil-CEO Talk on Carbon Crackdown - Chief executives of some of the largest U.S. oil companies are set to meet with White House National Climate Adviser Gina McCarthy on Wednesday as the Biden administration nears pivotal decisions on drilling and auto emissions.The session will be at least the second meeting this year between top oil executives and McCarthy, who is coordinating the Biden administration’s efforts to clamp down on greenhouse gas emissions from burning the industry’s core products. The meeting is set to involve McCarthy and members of theAmerican Petroleum Institute’s executive committee, according to two people familiar with the matter.The White House said in an emailed statement that it meets “with a wide-range of sectors that all play an important role moving us towards a clean energy future that tackles the climate crisis, creates good-paying union jobs and secures environmental justice.”Representatives of API did not have an immediate comment.The session comes as the Biden administration weighs a number of new regulations that will directly affect the oil industry. The administration is also asking Congress to impose a clean electricity mandate as part of a goal for a carbon-free grid by 2035, which could edge natural gas out of the nation’s power system.The Interior Department is preparing to send a reportto the White House this month on whether, and how, it can restart the U.S. government’s oil and gas leasing programs. The agency paused selling new oil and gas leases on federal lands and waters in January so it could conduct the broad review. The interim report is set to outline potential changes -- from narrowed acreage and more stringent climate considerations to higher royalty payments -- that could accompany the restart of leasing. Some oil and gas industry advocates have criticized the pause, saying a long-lasting moratorium threatens jobs and essential American energy production. The Western Energy Alliance and the state of Wyoming have challenged the pause in federal court. The Environmental Protection Agency, meanwhile, is honing a proposal for new standards governing greenhouse gas emissions from automobile tailpipes. And the Energy Department is advancing programs to spur development of hydrogen that dovetail with oil industry efforts to produce hydrogen using natural gas.During a previous meeting with McCarthy in March, executives pledged to collaborate with the administration on the reduction of methane releases from oil wells and equipment.
Interior proposes withdrawal of Trump rule that would allow drillers to pay less --The Interior Department has proposed a rule to withdraw a Trump-era regulation that was expected to lessen the amount of money that companies pay the government to drill on public lands and waters. The Biden administration in a swipe at Trump's said the rule would "shortchange" taxpayers, in light of findings that it would benefit oil and gas companies by millions of dollars. After thoughtful consideration, the Department of the Interior is proposing to withdraw an attempt by the previous administration to shortchange American taxpayers for the resources that oil and gas companies extract from public lands,” an Interior Department spokesperson said in a statement. “The Department’s ongoing review of the 2020 rule ensures that communities receive a fair return from onshore and offshore energy development,” the spokesperson added. The Trump rule in question changed the way that royalties are calculated that companies pay to the government for drilling on federal property.A new economic analysis justifying the proposed withdrawal said that getting rid of the Trump rule will allow the federal government to collect an additional $64.6 million in fees annually. The Trump administration had billed it as a way to give regulatory certainty and free companies from burdensome regulations. It came after a request from the American Petroleum Institute industry group for changes to how these royalties are calculated. The proposed withdrawal comes after a series of delays the Biden administration put on the rule to prevent it from taking effect. It’s currently halted until November. In its proposal, the Biden administration argued that the Trump rule had “defects” including an inadequate justification, consideration of alternatives and public comment period.
Governor using CARES funds to re-launch Energy Rebound Program -— Governor Mark Gordon has announced that up to $12 million of remaining CARES Act funds will be used to fund the Energy Rebound Program, which is designed to get more people working in the energy industry.In 2020 the Energy Rebound Program provided badly needed capital for specified oil and gas projects, including drilled but uncompleted ventures, workovers, and reclamation of oil and gas wells through the plugging and abandonment process, according to a press release.“The Energy Rebound Program successfully provided opportunities for oil and gas industry employees who lost jobs when drilling ceased last year,” Governor Gordon said. “This program will continue to provide economic benefits to this important industry, their workforce and the entire state of Wyoming.”
Judge blocks drilling plans in 2 states, citing bird habitat (AP) — A judge has halted plans for oil and gas drilling on vast areas of Wyoming and Montana, citing concerns about a sagebrush-dwelling bird. The U.S. Bureau of Land Management didn’t adequately consider how the drilling would affect the greater sage grouse, nor an option to defer drilling in the bird’s prime habitat, Idaho U.S. District Judge Ronald E. Bush ruled Wednesday. Bush ordered more study of potential effects on the bird before drilling may proceed. The drilling would occur on over 600 square miles (1,500 square kilometers) of federal land scattered across the energy-rich states. The Bureau of Land Management auctioned off hundreds of leases in sage grouse habitat in four sales in 2017. Sage grouse are a chicken-sized, primarily ground-dwelling bird whose numbers have fallen significantly from the millions that inhabited the U.S. West in frontier times. The U.S. Fish and Wildlife Service determined in 2010 that the bird deserved special protection but said in 2015 that conservation efforts led by Wyoming made that unnecessary. The environmental group that sued over the leases praised Bush’s ruling. “This ruling sends a very strong message that the BLM can no longer lease public lands for fossil fuel development without weighing the outcomes for sensitive lands and wildlife,” Erik Molvar, executive director of Western Watersheds Project, said in a statement Thursday. BLM spokesman Brad Purdy declined to comment, citing agency policy not to discuss ongoing litigation. The agency’s allies in the case included the Western Energy Alliance industry group and the state of Wyoming, where Republican Gov. Mark Gordon was weighing whether to appeal. “The governor is dismayed by Judge Bush’s ruling but is pleased that the leases have not been vacated,” Gordon spokesman Michael Pearlman said by email. The ruling comes amid a federal oil and gas leasing moratorium imposed by President Joe Biden’s administration while it studies the effects on climate change.
Navy says more than two-thirds of oil spilled in Port Townsend Bay has been recovered - Approximately 100 gallons of oil was spilled from the Navy destroyer USS Gridley after the ship left Naval Magazine Indian Island Thursday morning, the Navy announced late Friday. Officials said Friday the clean-up effort had reached its end, and approximately 70 gallons of oil was recovered from the waters of Port Townsend Bay. The remaining oil in the area dissipated, the Navy said. The spill was discovered around 10:30 a.m. Thursday, and the Navy earlier estimated 20 gallons of oil had spilled from the warship. “As soon we were aware of this spill, Indian Island’s emergency response personnel immediately sprang into action to contain it, assess the situation and begin clean-up efforts,” said Naval Magazine Indian Island Commanding Officer Cmdr. Donald Emerson. The cleanup and containment effort included the deployment of 200 feet of oil spill containment boom. The spill was contained by 1 p.m. Thursday, and oil recovery efforts continued until 5:30 p.m. Thursday before being restarted Friday morning. The cleanup effort ended about 10 a.m. June 4. The Navy is still investigating the cause of the spill. Navy officials said the spill will have a minimal impact to the local environment, including Port Townsend Bay’s shorelines and nearshore habitat. The spill happened just beyond the installation’s port security barrier in open water, during a slack tide with a very light breeze. Officials said the weather and ocean conditions were optimal and supported the Navy’s response efforts to effectively contain the spill and clean it up.
Rail union says 'sabotage' caused 2020 oil train derailment in Washington --A rail union representative has blamed an oil car disaster that took place last year in Washington state on “sabotage.” Last year, two tanker cars lost their hold on one another, drifted apart and caused a crash that derailed 10 cars, with three cars bursting into flames. A detachment would normally trigger an emergency brake, forcing them to stop. KUOW reports that Korey McDaniel, a member of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), told railway investigators that the Dec. 22 crash last year was “without a doubt” caused by sabotage. “We know from the FBI investigation, from how trains operate, how trains work, how the couplers work, how the pin lifters work, that this incident was caused without a doubt by sabotage,” McDaniel said during a hearing, according to KUOW who obtained a transcript. KUOW notes that two young men were reported to have emerged from the tracks before the crash, though no suspects have been revealed by the FBI so far. National Transportation Safety Board investigator Russell Quimby told KUOW, "Whoever did this had enough knowledge of railroad equipment to know what he's doing and enough knowledge of an air-brake system to know what to do." No one has claimed responsibility for the train crash, KUOW notes, with the rail company so far blaming the rail crew for failing to detect the compromised train brakes.
EPA fines Sand Island fuel storage facility for oil spill prevention violations - — The U.S. Environmental Protection Agency (EPA) announced a settlement with the owner and the operator of the bulk fuel storage facility at Sand Island on Tuesday, June 8. Hawaii Fueling Facilities Corporation (HFFC) owns the facility and Signature Flight Support Corporation (SFSC) operates it. About 1,944 gallons of fuel were recovered outside of the boundaries of the facility in January 2015 after a former operator noticed an inventory discrepancy in one of the tanks. The facility houses 16 bulk aboveground storage tanks and the former operator estimated 42,000 gallons of jet fuel had been released from the bottom of a tank. Crews continue Sand Island-area jet fuel cleanup, expand to off-site contamination Information gathered by EPA inspectors and the 2015 release revealed non-compliance with the Spill Prevention, Control, and Countermeasure (SPCC) Rule, a regulation under the Oil Pollution Act of 1990, according to the EPA. “It is paramount that facilities properly prepare and implement a Spill Prevention, Control, and Countermeasure Plan to prevent discharges of oil to Hawaii’s waterways. Companies that do not comply can face significant penalties.” HFFC and SFSC must take the following actions under the terms of the settlement:
- Install a double bottom tank floor on all remaining single bottom tanks by December 31, 2028.
- Conduct more frequent physical tank inspections until all tanks are retrofitted with a double bottom.
- Implement additional monitoring to detect leaks.
- Install an impervious liner within three years, or alternatively, implement an improved sub-surface slurry wall and revise the facility’s SPCC plan within 90 days of installation.
- Pay a civil penalty of $150,000.
U.S. Oil Exports Surged in 2020, Imperiling Climate - The United States became a net oil exporter in 2020 — marking the first time in the 70 years the government has tracked the trade in petroleum that America shipped more oil abroad than it imported. This sea change,highlighted this week by the Department of Energy, marks America’s emergence as a petroleum superpower at just the moment when new leadership in the White House is attempting to convince the world to transition away from fossil fuels to curb runaway global warming.For decades, America’s car-centric culture was powered by foreign oil, including imports from the volatile Middle East, as well as countries like Mexico, Canada, and Venezuela. Accordingly our foreign policy — including two wars with Iraq and an unwavering devotion to Saudi Arabia — was driven by the imperative to secure the steady crude flow of crude. In 2005, American net oil imports peaked at 12.5 million barrels a day. But with the advent of fracking, unlocking massive domestic petroleum reserves in shale deposits in places like West Texas and North Dakota, America’s net imports of oil have been in sharp decline. As a matter of national security, U.S. crude oil exports had been blocked since the oil shocks of 1970s. But that changed in 2015 when a Republican-led congress passed, and President Barrack Obama signed, an omnibus spending bill with a provision that let oil giants — much to their collective delight — begin shipping American oil abroad again. At the time, the U.S. was still importing, on net, more than 4 million barrels a day. But by last year, exports slightly overtook imports, by about 650,000 barrels a day. (See the data here.)The Biden White House has put tackling climate change near the top of its priorities, rejoining the Paris climate accord, hosting a Climate Summit in April and staking out 50 percent emissions reduction for the United States by 2030, measured against a 2005 baseline. And even as the president and his team seek to reestablish American climate leadership, the surge in U.S. oil exports underscores how challenging fighting global warming in a globalized economy will be. If American consumers finally begin to tame our fossil fuel gluttony, only to have American companies flooding the global market with cheap, fracked-in-the-USA crude — delaying a transition from fossil fuels abroad — is that truly progress?
Keystone XL Pipeline Project Is Canceled - NYTimes --The Canadian pipeline company that had long sought to build the Keystone XL pipeline announced Wednesday that it had terminated the embattled project, which would have carried petroleum from Canadian tar sands to Nebraska.The announcement was the death knell for a project that had been on life support since President Biden’s first day in office and had been stalled by legal battles for years before that, despite support from the Trump administration.On the day he was inaugurated, Mr. Biden, who has vowed to make tackling climate change a centerpiece of his administration,rescinded the construction permit for the pipeline, which developers had sought to build for over a decade. That same day, TC Energy, the company behind the project, said it was suspending work on the line.On Wednesday, the company wrote in a statement that it “will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.”Environmental activists cheered the move and used the moment to urge Mr. Biden to rescind the Trump-era permits granted to another pipeline, the Enbridge Line 3, which would carry Canadian oil across Minnesota. Hundreds of protesters were arrested earlier this week in protests against that project.“The termination of this zombie pipeline sets precedent for President Biden and polluters to stop Line 3, Dakota Access, and all fossil fuel projects,” said Kendall Mackey, a campaign manager with 350.org, a climate advocacy group. “This victory puts polluters and their financiers on notice: Terminate your fossil fuel projects now — or a relentless mass movement will stop them for you.”On Capitol Hill, Republicans slammed Mr. Biden. “President Biden killed the Keystone XL pipeline and with it, thousands of good-paying American jobs,” said Senator John Barrasso of Wyoming, the ranking Republican on the Senate Energy committee. “On Inauguration Day, the president signed an executive order that ended pipeline construction and handed one thousand workers pink slips. Now, ten times that number of jobs will never be created. At a time when gasoline prices are spiking, the White House is celebrating the death of a pipeline that would have helped bring Americans relief.”The 1,179-mile pipeline, which would have carried 800,000 barrels a day of petroleum from Canada to the Gulf Coast, had become a lightning rod in broader political battles over energy, the environment and climate change.
Keystone XL Developer Abandons Pipeline Project by Jerri-Lynn Scofield - TheCanadian developer of the Keystone XL oil pipeline, TC Energy and the government of the province of Alberta, has abandoned the project, which would have transported 800,000 barrels of petroleum per day from Canadian tar sands to Nebraska, and then onward through existing pipelines to to the Gulf Coast.Cancellation was expected after Biden on his first day in office revoked a construction permit for the pipeline. As the New York Times reported in The Keystone XL pipeline project has been terminated.:On the day he was inaugurated, Mr. Biden, who has vowed to make tackling climate change a centerpiece of his administration, rescinded the construction permit for the pipeline, which developers had sought to build for over a decade. That same day, TC Energy, the company behind the project, said it was suspending work on the line.On Wednesday, the company wrote in a statement that it “will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.”Keystone XL would have expanded the original Keystone pipeline. Planning for the extension commenced at a time when oil market conditions were very different from those that prevail today. According to the WSJ in What Is the Keystone XL Pipeline and Why Did President Biden Issue an Executive Order to Block It?:The expansion was originally conceived when oil prices were at historic highs—just before the 2008 financial crisis and American shale oil boom—as an artery that would pump 500,000 barrels of Canadian crude more than 1,700 miles from Alberta to the U.S. Gulf Coast. The line, which is now partially built but not operating, was eventually expected to transport 830,000 barrels of oil 1,210 miles from the Canadian oil sands to Steele City, Neb., where it would link to existing pipelines heading to Gulf Coast refineries. Solid opposition and protest from environmental groups has in recent years hindered construction of pipelines. In 2015, Trump’s predecessor declined to approve a construction permit for the Keystone XL pipeline. Trump made good on campaign promises to support the Keystone XL project and other fossil fuel pipelines, via executive orders and other policies, as I discussed inTrump Approves Keystone XL Pipeline, Making Good on Campaign Promise:
North Dakota industry leaders react to sponsor of Keystone pipeline terminating project - The Keystone XL pipeline was effectively shut down when President Joe Biden revoked the permit on his first day in office, but now the sponsor of the project, TC Energy, seems to have nailed the coffin shut by stepping away. Industry leaders worry the announcement may cost North Dakota. “It certainly just adds a cloud to all new pipeline projects, and certainly any international crossings between the US and Canada,” said Justin Kringstad, director of North Dakota Pipeline Authority. The Keystone XL pipeline was set to transport roughly 800,000 barrels of heavy crude oil a day through Canada to Nebraska but was not scheduled to pass through North Dakota. While industry leaders say they aren’t losing existing transportation capacity or planned capacity but say development in the future could be limited. “Your companies are going to lose that incentive or desire to invest or plan these projects just because they become so difficult to complete,” said Kristen Hamman, director of regulatory and public affairs for the North Dakota Petroleum Council. The other concern for industry leaders is what this means for the Dakota Access Pipeline. DAPL is still operating while the Army Corps of Engineers conduct an environmental review. Industry leaders say DAPL puts North Dakota in a good position, but in the long-term they may have to look to other options and rely more heavily on rail.
De Beers fine could exceed £100k for oil spill breaching environmental protection act -- Global diamond mining company De Beers is facing a fine of at least CDN$100,000 (£58,000) for an oil spill that took place at its Snap Lake mine in Canada in 2017. The fine is under the Canadian Environmental Protection Act, and could total as much as CDN$200,000 (£116,000), depending on the outcome of a court hearing in Canada. Canada’s Cabin Radio reported that the case is the first instance of a company being charged under the act which was brought in late last year. De Beers published a spill report in December 2017 but initially underestimated the volume of the spillage, Cabin Radio revealed. While their initial report put the spillage at around 500 litres of diesel, the cleanup process put the number at almost 12 times that amount. The company will next appear in court in September.
Keystone XL is dead, but oil sands are waking up -- Friday, June 11, 2021 ---Climate activists celebrating the death of the Keystone XL pipeline might be in for a disappointment. While the high-profile project is not moving forward, the outlook for Canadian oil sands production is improving. Output of crude bitumen surged to record levels in December. Production has since tapered off slightly, but energy forecasters expect oil sands to scale new heights in 2021 and 2022. At the same time, two other pipeline projects with the potential to ship nearly 1 million barrels a day of oil are moving forward. The result is a split screen. Climate activists are celebrating a major political victory on one side, and companies are gradually scaling up production of Alberta's emissions-intensive brand of oil are on the other. "Keystone is almost larger than life, and I don't think it's fair to say that level of attention or political heat and light can be sustained on enough projects to meaningfully move the needle on climate change," said Andrew Leach, an environmental economist who tracks the oil sands at the University of Alberta. The dynamic illustrates the pipeline's complex legacy. On the one hand, opposition to the pipeline and the type of oil it would ship reflects the growing climate consciousness of investors, governments and even oil companies. Majors like Royal Dutch Shell PLC, TotalEnergies SE and Equinor ASA have all divested their oil sands assets in recent years, partially to green their production portfolios and partially in an attempt to demonstrate a new commitment to financial discipline. The latter represents a response to investors' growing calls for capital discipline, which has pushed companies away from expensive ventures like the oil sands, and toward less capital-intensive projects in America's shale basins. But the oil sands are hardly dead. While the COVID-19 pandemic pummeled Canadian companies and drove capital expenditures on oil sands development to their lowest level since 2005, production has risen steadily since May of 2020. Balance sheets are improving. Shares in Suncor Energy Inc. and Canadian Natural Resources Ltd., two of the largest oil sands producers, have doubled since October. Two other pipeline projects, meanwhile, still hold the potential to carry more oil sands crude to market, though both face opposition. Construction began last year on the Trans Mountain pipeline, which would carry an additional 535,000 barrels a day from Alberta to the coast of British Columbia. Upgrades to Enbridge Inc.'s Line 3 would add another 390,000 barrels a day of capacity to a pipeline terminating in the U.S. Midwest. TPH estimates oil sands production will hit a record 3.2 million barrels a day this year, and rise to 3.25 million barrels a day in 2022. When Canadian regulators modeled the country's evolving energy future last year, they concluded that oil sands production will peak in 2039.
Biden Admin Official Calls Nord Stream 2 Done Deal-- Secretary of State Antony Blinken called completion of the Nord Stream 2 pipeline from Russia to Germany a “fait accompli” and said the U.S. is now working with Germany to limit how dependent Europe’s energy system will be on Russia after it is finished. “The physical completion of the pipeline was, I think, a fait accompli,” Blinken told the House Foreign Affairs Committee on Monday, saying that about 90% of the pipeline was completed during the Trump administration. “I think we have an opportunity to make something positive out of a bad hand that we inherited when we came into office.” Blinken said that sanctioning the chief executive officer of the project’s parent company, as opponents of the pipeline urged, would have led to a deterioration in U.S.-German relations. Now, he said, Germany has “come to the table” to try to prevent Russian President Vladimir Putin from using the pipeline to threaten Europe’s energy security. Representative Michael McCaul of Texas, the committee’s top Republican, said in a tweet as Blinken testified that “it’s unacceptable that our strategic partner #Ukraine found out about the shameful decision to waive critical #NordStream2 sanctions through the press & not the Biden Admin directly.” He said President Joe Biden should use “the mandatory authorities Congress provided to stop the pipeline” and that Biden should meet with Ukraine’s President Volodymyr Zelenskiy before his coming summit with Putin because allowing the pipeline to become operational “will render Ukraine more vulnerable to Russian aggression.” Jake Sullivan, Biden’s national security adviser, announced that the president had spoken with Zelenskiy on Monday and invited him to visit the White House this summer. Biden assured Zelenskiy during the call that in his meeting with Putin, “he will stand up firmly for Ukraine’s sovereignty, territorial integrity and aspirations.” More than 60 House Republicans sent a letter to Biden on Monday saying that completion of Nord Stream 2 “will be a gift to Putin and his efforts to increase geopolitical influence in Europe.” “Waiving sanctions for Nord Stream 2 ‘because it’s almost completely finished’ is the wrong message to our allies and partners and undermines our credibility and global leadership,” they said.
North Sea Oil Floating Off Europe Could Signal Weak Asian Demand -Around 6 million barrels of crude of North Sea’s key grades have been kept in tankers offshore Europe for up to three weeks, which could be a sign that demand in the world’s top oil importing region, Asia, could be softer than the paper market suggests, Bloomberg reported on Monday, citing ship tracking data it had compiled. Five oil tankers with 6 million barrels of North Sea crude are sitting off the shores of Europe, including two supertankers chartered by the world’s largest independent crude oil trader, Vitol Group, according to the data compiled by Bloomberg. Considering that the current crude oil futures structure is in backwardation, the state where the prices of the nearer futures contracts are higher than those further out in time, this sure isn’t an incentive for traders to keep oil in floating storage. Therefore, Bloomberg notes, the possible reason for tankers sitting loaded with North Sea crude off Europe could be a sign of weaker demand from Asia. Independent Chinese refiners, the so-called “teapots” and typically eager buyers of the Forties crude grade, have scaled down purchases in recent weeks, waiting for the government to issue its second batch of allowed crude oil import quotas for this year, according to Bloomberg. Another reason for potentially weaker demand for North Sea crude in Asia could be the low refining margins in the region amid a fuel glut, as the COVID resurgence have resulted in restrictions not only in India, but also in Malaysia. Rallying oil prices could also be a reason for price-sensitive buyers to stay away from purchases. In March this year, traders and market sources told Bloomberg that the rising premium of North Sea’s benchmark Brent over Dubai crude was making shipment of Brent-linked oil to Asia more expensive and likely to reduce in the coming months.
Sri Lanka sued over ship disaster as oil spill looms - Environmentalists yesterday sued the Sri Lankan government and operators of a container ship loaded with chemicals and plastic that burned offshore for almost two weeks, as international experts prepared to deal with a possible oil spill. The private Centre for Environment Justice (CEJ) petitioned the Supreme Court alleging that local authorities should have been able to prevent what they called the ''worst marine disaster” in Sri Lanka’s history. The Singapore-registered MV X-Press Pearl has been slowly sinking into the Indian Ocean since Wednesday after a fire that raged for 13 days within sight of the coast. Tonnes of microplastic granules from the ship have swamped an 80-km stretch of beach which has been declared off limits for residents. Fishing in the area was also banned. The CEJ said government inaction was ''against the concepts and principles of environmental law”. A hearing is yet to be fixed. It said the crew knew of an acid leak on May 11, long before entering Sri Lankan waters, and local authorities should not have allowed the vessel in. The legal challenge seeking unspecified damages came as foreign experts were deployed to help Sri Lanka contain a potential oil leak from the burnt-out wreckage. Representatives from the International Tankers Owners Pollution Federation (ITOPF) and Oil Spill Response (OSR) were onshore monitoring the ship, the operators of the vessel, X-Press Feeders, said. ''They continue to co-ordinate with MEPA (the Marine Environment Protection Authority) and the Sri Lankan navy on an established plan to deal with any possible spill of oil and other pollutants,” the Singaporean company said. Choppy seas and poor visibility prevented navy divers from checking the hull for a second day Friday, Sri Lanka navy spokesperson Indika de Silva told AFP. He said a team reached the sinking vessel and made a cursory inspection on Thursday, but could not carry out their mission because of poor visibility.
Data recovered as a ship sunk by chemicals off the coast of Sri Lanka. (AP)-Experts have recovered a data recorder for a ship carrying fire-damaged chemicals. Singapore-registered MV X-Press Pearl began to sink on Wednesday, the day after authorities extinguished the burning fire on board for 12 days. Attempts to tow the ship into the deep sea away from Colombo’s port failed after the stern was submerged and sank to the seabed. The Sri Lankan Port Authority said on Saturday that experts with the Navy had recovered the ship’s voyage data recorder (VDR, commonly known as a black box). Authorities said on their website that the VDR, which contains important information related to the operation of the vessel, will be handed over to local law enforcement agencies investigating the fire. Both authorities and ship operators say that the rear of the ship remains on the seabed at a depth of about 21 meters (70 feet), and the front continues to sink slowly. Operator X-Press Feeders said rescuers remained on the scene to address the potential spill. We apologize for the disaster. Port officials and operators said there were no signs of oil or chemical spills. They said the Sri Lankan Navy, Indian Coast Guard, rescue teams and local governments were able to respond to signs of oil pollution and debris and are monitoring the situation 24 hours a day. The fire destroyed most of the ship’s cargo, which contained 25 tons of nitric acid and other chemicals. However, chemicals left over from the fuel tank and hundreds of tons of oil can leak into the sea. Such disasters can devastate marine life and further pollute the island’s famous beaches. The disaster has already washed away debris containing tons of plastic pellets used to make plastic bags to the shore. The government has banned fishing on the coastline for about 80 kilometers (50 miles). According to officials, the ship is loaded with about 300 tonnes of oil, and experts believe it may have burned out in a fire. The Associated Press’s inventory of ships explains that X-Press Pearls carry just under 1,500 containers, 81 of which are described as “dangerous goods.” Environmentalists warn that dangerous goods, plastics, chemicals and oil can be released into the water and destroy marine ecosystems, which could be a “terrible environmental disaster.”
Sri Lanka still waiting for compensation over last year’s oil slick from MT New Diamond - Sri Lanka is yet to receive compensation amounting to over Rs 3.7 billion owed due to environmental damage caused by an oil slick that occurred due to the fire aboard the container vessel MT New Diamond, which caught fire off the Eastern coast of Sri Lanka in September last year. A final report on a technical assessment regarding the environmental damage caused by the disaster was handed over to the local insurer of MT New Diamond’s shipping company in April. The exhaustive report compiled by a team of experts took four months to complete and the damage was calculated at USD 19 million (Over Rs 3.76 billion), Marine Environment Protection Authority (MEPA) Chairperson Dharshani Lahandapura told the Sunday Times. The insurer has told MEPA that it needs time to study the report, Ms Lahandapura noted, adding that they were hopeful of a positive response soon. The Greek owners of the Panama flagged New Diamond was given a bill of Rs 442 million in costs incurred by various Government agencies when fighting the fire aboard the vessel. Legal action was also instituted against the ship’s captain after investigators found that his actions contributed to the incident. He was fined Rs 12 million after pleading guilty to the charges. The vessel was allowed to leave Sri Lankan waters only after both the Rs 442 million damage costs and the Rs 12 million fine were deposited, authorities stressed.
Container ship fire produces ecological catastrophe in Sri Lanka - In the second major container ship accident in Sri Lankan waters in the past year, the X-Press Pearl, which was awaiting entry to Colombo port, caught fire on May 20 after a chemical leak. All attempts to douse the fire failed and the ship sank about 10 nautical miles off the west coast of Sri Lanka, creating major problems for the environment, fisheries and the health of coastal communities. Fire damaged X-Press Pearl just before it sank (Credit: Sri Lankan Air Force) Last September, a super tanker—the MV Diamond—caught fire off Sri Lanka’s southeast coast. The blaze raged for days, discharging contaminated water and oil into the sea, before the ship was towed away. The two incidents demonstrate major safety failures in the global shipping industry and the criminal disregard of the corporations that dominate it, and national governments, for people’s lives and the marine environment. According to reports, the crew of X-Press Pearl, a Singapore-flagged ship, discovered nitric acid leaking from a container while the vessel was still in the Arabian Sea. They sought permission from Hamad Port in Qatar and Hariza Port in India to offload the problematic container. Both ports rejected the request, saying they lacked the capacity to handle the problem. The ship’s captain, now in Sri Lankan police custody, claims that Colombo port authorities were informed about the leaking container. Colombo Harbour Master Nirmal Silva said he did not receive any such information, until after the vessel caught fire. The leaking container had within it 25 tons of nitric acid and other flammable material. It is apparent that the port authorities and the Sri Lankan government were either unable to assess the risk on board or recklessly underestimated it. Port authorities and the Sri Lankan Navy spent two days trying to douse the fire with sea water and chemical powder during which 23 X-Press Pearl crew members, including two suffering injuries, were rescued. It was clear from the beginning, however, that Sri Lankan authorities had no capacity to deal with the disaster and international assistance took days to arrive. Several containers of small plastic pellets, called nurdles, broke open during the fire, spilling tons of nurdles into the sea and washing up along five kilometres of beaches and tidal areas along the country’s western coast. Thousands of dead fish, disfigured turtle and seabird carcases have been washed ashore, some with visible acid burn marks and nurdles in their respiratory and digestive tracts. The ship, which had over 1,400 containers on board, has now sunk, along with more than 6,000 tons of nurdles, 500 tons of fuel and lubricant and 6,000 tons of miscellaneous cargo. While photographs show murky plumes leaking from the sinking vessel, it is impossible to determine the exact chemical composition without thoroughgoing analysis.
International oil spill response team on standby in Sri Lanka - An international oil spill response team is remaining on standby in Sri Lanka in the event of an oil spill from the ship, MV X-Press Pearl. Oil Spill Response Limited (OSRL) said that it has been mobilised in Sri Lanka in response to the incident relating to the container ship, the MV X-Press Pearl. Meanwhile, the Voyage Data Recorder of the ship has been recovered by the Navy. The vessel is currently 10km offshore, approximately 12 km north of the capital city, Colombo. OSRL said that it is working closely with the International Tanker Owners Pollution Federation Ltd (ITOPF), and a team of response specialists. ITOPF has been mobilised to Sri Lanka to provide technical advice on the loss of chemicals, plastics and other cargo from the containership X-Press Pear. X-Press Pearl caught fire on Thursday 20th May whilst at Colombo anchorage, Sri Lanka, approximately 10km offshore. The vessel had travelled from the port of Hazira, India and was carrying 1,486 containers, including dangerous goods (nitric acid, methanol, sodium hydroxide and other chemicals) and nurdles (small plastic pellets). It is understood that approximately 320 m2 of low sulphur heavy fuel oil was also on board as bunkers. Despite the best efforts of salvors supported by the Sri Lankan Navy and Indian Coast Guard, attempts to control the fire were unsuccessful. All crew members were evacuated from the vessel. As the fire took hold and spread, the container stacks collapsed and multiple containers, as well as burning liquids and debris, had fallen overboard. Four containers had washed ashore, and many more had sunk. As at 2nd June, an estimated 150 km of shoreline is reported to have been impacted to varying degrees by assorted debris from the vessel.
Rig Remains Submerged After Incident - The Naga 7 rig remains submerged off the coast of Sarawak after an incident that took place on May 3, Velesto Energy revealed in its latest quarterly report, which was published last week. In the report, the company noted that the incident area was secured while the group works with insurance underwriters and the Protection & Indemnity (P&I) Club on “the way forward”. Velesto Energy said the rig and other related liabilities are adequately covered under the Hull & Machinery (H&M) insurance and the P&I Club, respectively. Progressing on the insurance claims, on May 31, Velesto Drilling Sdn. Bhd, as the insured under the H&M policy, issued a notice of abandonment of the submerged rig to the H&M insurers, pursuant to the H&M policy, Velesto Energy outlined. The company said it was currently awaiting its response. Velesto Energy did not immediately respond to an email from Rigzone asking when it expected to receive a response. In its latest quarterly report, Velesto Energy confirmed that the incident involving the Naga 7 rig occurred due to the penetration of one of its legs into a soil formation while jacking up at the Salam-3 well off the coast of Sarawak for ConocoPhillips Sarawak. The rig is said to have tilted and subsequently submerged at the location on May 4. All 101 personnel on board were safely transferred to shore and all the relevant authorities were duly informed, Velesto Energy confirmed. In its annual report posted on May 28, Velesto Energy highlighted that the Naga 7 incident location was being monitored for security and any potential adverse impact. The company’s president, Rohaizad Darus, referenced the incident in the annual filing. “While I am proud of the achievements in 2020, I wish to reference the unfortunate incident involving Naga 7 on 3 May 2021 causing the rig to be fully submerged,” he stated in the report. “We believe our HSE drills and preparation have contributed to the safety of our crew … The group is investigating the incident and evaluating recovery options,” he added.
Shocking ship collision in China produced a huge oil spill in the Yellow Sea - A tanker that transported around one million barrels of bitumen mixture collided with another boat while traversing a thick fog upon arriving at Qingdao port, in China. The incident led to a massive oil spill in the Yellow Sea, Chinese maritime officials and representatives of the vessels involved confirmed. The ship crash involving the tanker A Symphony with the Liberian flag and the bulk carrier Sea Justice occurred at 08.50. “The force of the impact on the forward port side caused a breach in the cargo tanks and ballast tanks, with an amount of oil being lost to the ocean,” said A Symphony executive Goodwood Ship Management, adding that the entire crew was counted and there were no injuries. // The story behind the man who saved 412 people on the bridge that holds the world record for suicides The extent of the spill was unclear so far, as operations to contain it were hampered by fog. “The oil spill occurred after a collision between two vessels,” said an official with China’s Shandong Maritime Security Administration, on condition of anonymity, confirming that no one was injured. “The dense fog, which has hampered navigation off the coast of Qingdao since yesterday, it caused low visibility at the time of the collision, “Goodwood said. In turn, he maintained that emergency procedures were put in place on board the vessel to limit any spill and the vessel’s oil spill response team was mobilized.
China Ban on Aussie LNG Should Have Limited Impact - Beijing in May verbally ordered several of its smaller liquefied natural gas (LNG) importers to no longer buy the super-cooled fuel from Australia for at least the rest of the year. The unofficial ban only extends to so-called second-tier LNG importers, not the country’s three state run oil and gas majors that account for nearly 90% of China’s LNG imports, according to a Bloomberg news report. These secondary buyers make up the remaining 10% of China’s LNG procurement and include both state-run and private companies that usually import cargoes utilizing terminals owned and operated by China’s three majors, or PipeChina. China’s unofficial LNG ban came just a week after the National Development and Reform Commission, its top economic planning agency, suspended all activities under the China-Australia Strategic Economic Dialogue. Beijing’s decision to pull out of the forum appears to be a tit-for-tat response to Canberra’s decision in April to end infrastructure agreements between the state government in Victoria and Beijing. These developments come amid a more than year-long diplomatic stand-off between the two sides that has seen Beijing increasingly target numerous Aussie imports, with both official and unofficial bans, including coal, barley, copper, wine, lobster, several meat products, and timber. Beijing initiated the import bans last year after Canberra’s insistence that a formal investigation be launched over the origins of the coronavirus, an implication that still angers Beijing. Until earlier this month, most analysts thought that Aussie LNG imports would remain untouched – and with good reason. Australian producers make up as much as 40% of China’s LNG imports, with the remainder of that supply divided between Qatar, the U.S., Russia, Malaysia, and others, according to China’s General Administration of Customs. In addition, China is in the midst of a major LNG infrastructure build-out that will help propel it to the top global LNG importer slot ahead of Japan as early as next year. Beijing also mandated that gas make up at least 10% of the country’s energy mix by 2020, 15% by 2030, with further earmarks after that. In light of its recent net-zero carbon emissions 2060 goal, gas as a percentage of its energy mix could increase even more. Moreover, it’s unlikely China will directly target Aussie LNG any further since it would involve violating long-term offtake agreements. To do so on a large scale would be unprecedented in global LNG markets, while also forcing Chinese buyers to scramble to replace that supply – at least over the mid-term.
IEA Says Oil Demand to Hit Pre-Virus Level in 2022- -- Global oil demand will recover to pre-pandemic levels late next year, the International Energy Agency predicted, urging OPEC and its allies to keep markets balanced by tapping their plentiful spare production capacity. World consumption will once again reach 100 million barrels a day in the second half of 2022 as developed economies bring the virus under control, the agency said, in its first detailed outlook for the year ahead. At some point before the end of the year, demand will surpass pre-Covid levels, it said. The forecast counters speculation that oil use -- and the resulting planet-warming emissions -- may have already peaked as a result of social changes in the wake of the pandemic. The IEA itself sees consumption reaching a plateau in the 2030s, but hasn’t predicted a peak in demand. Oil prices have rebounded to a two-year high above $70 a barrel as motorists take to the roads and economic activity picks up with the easing of lockdowns. The report -- which paints a slightly more bullish picture than the agency’s last outlook -- underscores that the market’s next move is in the hands of Russia and Saudi Arabia. The Paris-based IEA made a direct plea to the OPEC+ alliance, which is led by those two countries, to continue restoring the output it cut when demand collapsed last year. “OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” said the agency, which advises most major economies. Satisfying demand growth is “unlikely to be a problem” if the 23-nation coalition acts because only a fifth of its spare capacity is needed to keep the market in balance, it said. IEA Executive Director Fatih Birol has warned of a further price surge if extra supplies aren’t forthcoming. However, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman has said he’ll wait until consumption is tangible before responding. Goal Achieved The Organization of Petroleum Exporting Countries and its partners have already achieved their primary market goal, having cleared the enormous inventory glut that amassed during the pandemic, the report showed. The group’s next step ought to be straightforward, according to the IEA. OPEC+ will need to add about 1.4 million barrels a day -- or less if fellow member Iran clinches a deal to remove U.S. sanctions -- leaving it with another 5.5 million a day off-line, according to IEA estimates. Bloomberg calculations suggest the buffer isn’t quite as generous. Tehran could add 1.4 million barrels of exports if it concludes a nuclear agreement with Washington that removes U.S. barriers on its oil trade, the IEA estimates -- equivalent to the amount the entire OPEC+ coalition needs to add. The group will meet on July 1 to consider its next move.
Oil prices retreat as investors await Iran nuclear talks this week (Reuters) -Oil pulled back after hitting fresh multi-year highs on Monday, as investors awaited the outcome of this week's talks between Iran and world powers over a nuclear deal that is expected to boost crude supplies. Brent crude futures for August fell 38 cents, or 0.5%, to $71.51 a barrel by 0519 GMT, after earlier hitting $72.27, their highest since May 2019. U.S. West Texas Intermediate crude for July touched $70 for the first time since October 2018 but reversed course to be at $69.32 a barrel, down 30 cents, or 0.4%. Investors may have sold off some contracts to take profit when WTI hit $70, "The primary concern is about Iranian barrels coming back into the market but I don't think there will be a deal before the Iranian presidential election," Data showing a 14.6% year-on-year drop in China's crude oil imports in May also weighed on prices. Both contracts have risen for the past two weeks as fuel demand is rebounding in the United States and Europe after governments loosened COVID-19 restrictions ahead of summer travel. Global oil demand is expected to exceed supplies in the second half despite a gradual easing of supply cuts by OPEC+ producers, analysts say. A slowdown in talks between Iran and global powers in reviving a 2015 nuclear deal and a drop in U.S. rig count also supported oil prices. Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports. While the European Union envoy coordinating the negotiations had said he believed a deal would be struck at this week's talks, other senior diplomats have said the most difficult decisions still lie ahead. Analysts expect Iran, which is having its presidential election on June 18, to increase its production by 500,000 to 1 million barrels per day once sanctions are lifted. In the United States, the number of oil and natural gas rigs operating fell for the first time in six weeks as growth in drilling slowed. This "suggests that U.S. oil drillers are less enthusiastic in adding more U.S. oil production and hence reduces the risk of a supply glut in the global oil market in H2 2021,"
Oil futures pulled back from two-year highs on Monday - Oil futures pulled back from two-year highs on Monday, pressured by the prospect of higher Iranian exports and lower Chinese demand. However, increased demand expectations for both Europe and the U.S. placed a floor under the market, as these locations commence the reopening process after COVID-19 lockdowns. While the demand side continues to drive this market, the Chinese trade data cooled things off a bit. July WTI slipped 39 cents, or 0.6%, to settle at $69.23 a barrel, while August Brent lost 40 cents, or 0.6%, to settle at $71.49 a barrel. July RBOB fell 1.84 cents, or 0.83%, to settle at $2.1931 a gallon, the largest one day dollar and percentage decline since Thursday, May 20, 2021 and the end to a four session winning streak. July heating oil shed 0.2%, to nearly $2.12 a gallon. Technical Analysis: WTI retreated from the psychological resistance level of $70, putting a temporary stop on the uptrend of this market. OPEC's Secretary General, Mohammad Barkindo, said OPEC and its allies expect oil inventories to fall further in the coming months, suggesting efforts by the producers to support the market are succeeding. He said oil stocks in the developed world nations fell by 6.9 million barrels in April, 160 million barrels lower than the same time one year ago. He said OPEC+ compliance was 114% in April. According to BP’s Chief Executive Officer, Bernard Looney, the company sees a strong recovery in global crude demand and expects it to last for some time, with U.S. shale production being kept in check. Bank of America analysts said refining margins are expected to increase as oil demand recovers but added that abundant processing capacity will continue to weigh on the market, with more than 3 million bpd of planned additions during 2021-22. They stated that while they are bullish on refined product cracks from here, the upside is seen limited.
WTI crude closes above $70 for the first time since Oct. 2018 --Oil broke through a months-long trading range as expectations of tightening supplies in the U.S. compounded signs the world’s largest oil-consuming country is in the midst of a robust recovery. West Texas Intermediate futures surpassed the $70 mark to close at its highest since Oct. 2018 after briefly touching the key psychological level earlier this week. Investors focused on the health of the U.S. market ahead of inventory data on Wednesday. Confidence in the outlook for oil demand continues to grow as accelerating vaccinations allow people to travel more. The Middle Eastern Dubai benchmark is trading in its steepest backwardation -- a market structure that indicates supply tightness -- in almost a year after the region’s physical market had a strong start to the month. “We’re looking for a pretty sizable drawdown in U.S. crude oil inventories, while the demand thesis keeps improving,” said John Kilduff, a partner at Again Capital LLC. “This atmosphere remains bullish, as we’re heading into a structural deficit in terms of supply versus demand.” Crude’s advance from 2020’s collapse has stalled a handful of times this year, but prices have usually returned to an upward track as overall global demand keeps improving. The Covid-19 comeback in part of Asia and Latin America, however, is a reminder that the rebound will be bumpy. WTI for July delivery gained 82 cents to $70.05 a barrel in New York. Brent for August settlement rose 80 cents to $72.29 a barrel at 2:51 p.m. in New York. WTI’s discount against Brent is on the move again after surging to the narrowest since November last month. With the narrowness in the spread persisting, U.S. exports may see a dip as WTI loses competitiveness.
Light Crude Settles Above $70 a Barrel-- Oil broke through a months-long trading range as expectations of tightening supplies in the U.S. compounded signs the world’s largest oil-consuming country is in the midst of a robust recovery. West Texas Intermediate futures surpassed the $70 mark to close at its highest since Oct. 2018 after briefly touching the key psychological level earlier this week. Investors focused on the health of the U.S. market ahead of inventory data on Wednesday. Confidence in the outlook for oil demand continues to grow as accelerating vaccinations allow people to travel more. The Middle Eastern Dubai benchmark is trading in its steepest backwardation -- a market structure that indicates supply tightness -- in almost a year after the region’s physical market had a strong start to the month. “There’s all sorts of technical models that work off closing prices,” “Any time you have a close above a number divisible by 5, it tends to be pretty significant” i Crude’s advance from 2020’s collapse has stalled a handful of times this year, but prices have usually returned to an upward track as overall global demand keeps improving. The Covid-19 comeback in part of Asia and Latin America, however, is a reminder that the rebound will be bumpy. “We’re looking for a pretty sizable drawdown in U.S. crude oil inventories, while the demand thesis keeps improving,” “This atmosphere remains bullish, as we’re heading into a structural deficit in terms of supply versus demand.” WTI for July delivery gained 82 cents to settle at $70.05 a barrel in New York. Brent for August settlement rose 73 cents to end the session at $72.22 a barrel. WTI’s discount against Brent is on the move again after surging to the narrowest since November last month. With the narrowness in the spread persisting, U.S. exports may see a dip as WTI loses competitiveness.
Oil Climbs As Blinken Says "Hundreds Of Sanctions" On Iran To Remain After earlier this week US Secretary of State Antony Blinken somewhat pessimistically portrayed that it remains "unclear" whether Iran is actually willing to restore the nuclear deal, prompting angry words from Foreign Minister Javad Zarif who again pointed out that it's only Washington not in compliance due to Trump-era sanctions which the Biden White House refused to "bury" in order to make a renewed deal possible, Blinken's newest statements are pouring more cold water on all the recent speculation that prematurely hailed a Vienna agreement as imminent. During a Tuesday hearing before a US Senate committee the US top diplomat was asked about his assessment of progress at Vienna, to which he frankly replied that hundreds of sanctions targeting Iran are likely to remain in place even if Iran and the United States return to compliance. "He said he would anticipate some sanctions would remain in place, including ones imposed by the Trump administration," according to his words in RFE/RL."If they are not inconsistent with the JCPOA, they will remain unless and until Iran's behavior changes," Blinken testified before the Senate Appropriations Committee.Lately the more enthusiastic and optimistic accounts of how things are going in Vienna have tended to come only from the Iranian side, as well as in some instances Russia. For example Iranian chief negotiator Abbas Araqchi indicated last week that this current round of talks could be "conclusive" and lead to a final agreement. Yet at the same time State Department spokesman Ned Price had said, "There are some hurdles that remain that we haven't been able to overcome in those five rounds." At sixth round is expected to start Thursday.Upon Blinken's Tuesday comments, and with the Iran deal now looking more elusive, oil prices have continued to climb this week, after at the start of the month US crude futures had reached their highest in over two-and-a-half years after the OPEC+ alliance forecast a tightening global market, coupled with the increasingly cautious statements out of US negotiators in Vienna over reaching a deal.
WTI Dips After Big Builds In Gasoline, Distillates Inventories- Oil prices are holding yesterday's gains this morning after US Secretary of State said that Iran will remain under significant sanctions, lowering traders' odds of a sudden rush of supply back into the markets, although we note thatLibya’s oil output is picking up again after a pipeline leak that caused a brief reduction was fixed."The widespread faith that oil demand growth will trend significantly higher in the second half of the year is paving the way forward for the price rally," PVM analysts said.For now, the next leg may depend on if US production can remain disciplined as stocks of crude continue to slide. API
- Crude -2.108mm (-3.5mm exp)
- Cushing -420k
- Gasoline +2.405mm
- Distillates +3.752mm
DOE
- Crude -5.241mm (-2.9mm exp)
- Cushing +165k
- Gasoline +7.046mm
- Distillates +4.412mm
Crude stocks fell more than expected last week but product inventories rose significantly... Overall crude stocks are now below their 5-year average...The four-week rolling average on gasoline demand ticked lower for the first time in four weeks. That’s not a great sign for a week that included the U.S. Memorial Day holiday.US crude production remains rather notably flat (rebounding from the prior week's maintenance drop) in the face of higher prices and rising rig counts...
Oil steadies amid weak summer kickoff for U.S. fuel demand -- Oil prices were steady on Wednesday after U.S. inventory data showed a surge in gasoline inventories due to weak fuel demand following U.S. Memorial Day weekend, traditionally the beginning of the peak summer driving season. Brent crude futures remained unchanged to settle at $72.22 a barrel, having earlier touched $72.83, their highest since May 20, 2019. U.S. West Texas Intermediate (WTI) crude closed 9 cents, or 0.1%, lower at $69.96 a barrel, after reaching $70.62, its highest since Oct. 17, 2018. Despite a 5 million-barrel draw in crude oil last week, stocks of gasoline and other fuels rose sharply due to weak demand, according to Energy Information Administration data for the week that included the long Memorial Day holiday weekend. Product supplied fell to 17.7 million barrels per day, versus 19.1 million the week before. Other analysts noted, however, that the poor weather up and down the U.S. East Coast may have reduced consumption, following a period of gasoline hoarding that artificially boosted demand during the Colonial Pipeline outage last month from a ransomware attack. On Tuesday, the EIA forecast U.S. fuel consumption would grow by 1.48 million bpd this year, up from a previous forecast of 1.39 million bpd. Oil rallied earlier in the session on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded after the U.S. Secretary of State said sanctions against Tehran were unlikely to be lifted. Investors had assumed that sanctions against Iranian exports would be lifted and oil supply would increase this year as Iran's talks with western powers on a nuclear deal progressed. However, U.S. Secretary of State Antony Blinken said on Tuesday that even if Iran and the United States returned to compliance with a nuclear deal, hundreds of U.S. sanctions on Tehran would remain in place.
Oil Prices Get Boost from Inflation Data -- Oil rose to the highest settle in over two years, drawing support from higher-than-forecast U.S. inflation data and a strong demand outlook. Futures in New York rebounded from a plunge of as much as 1.8% earlier on Thursday that followed reporting of U.S. removing sanctions on a former Iranian oil official. Crude found support with U.S. consumer prices in May topping forecasts, extending a months-long buildup in inflation that is seen helping spur more interest in alternative assets like commodities to find yield. At the same time, oil’s market structure strengthened amid recovering demand and signs global supplies may be less than expected. “The outlook for oil demand is staying strong and getting stronger,” said John Kilduff, a partner at Again Capital LLC. Meanwhile, “there’s an inflation pulse rippling through the commodity sector, and crude oil is a big participant as a base hedge element against inflation.” Prices remain over 40% higher this year. Even as the Organization of Petroleum Exporting Countries expects the global demand recovery to gather steam in the second half of the year, the spare capacity buffer of the group and its allies have is seen being less than 80% than what it is on paper. OilX analysts also flagged “several signs” in their data that oil supplies worldwide are surprising to the downside, reflecting a combination of mature field declines and maintenance that was delayed into this year. The U.S. announced it deleted sanctions on a number of people, including former managing director of the National Iranian Oil Company. “I would not read too much into Treasury’s action today to remove sanctions against an Iranian oil official,” said Hagar Chemali, a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center. “The fact that no statement was made in connection with this de-listing is Treasury’s way of saying there isn’t much there there.” West Texas Intermediate for July delivery rose 33 cents to settle at $70.29 a barrel, the highest since October 2018. Brent for August settlement rose 30 cents to $72.52 a barrel, the highest since May 2019.
Traders eye $100 oil as EIA sees inventory drop - Investors have set their sights on $100 a barrel for oil as the US Energy Information Administration (EIA) forecast a decline in global oil inventories in the second half of 2021 in its June Short-Term Energy Outlook (STEO). Traders have scooped up call options tied to Brent and West Texas Intermediate crude-oil prices reaching $100 by the end of next year. Oil prices haven’t topped that milestone since 2014, when a gush of US crude depressed energy markets. The EIA now sees Brent spot prices averaging $65.19 per barrel this year, which marks a notable rise from the $62.26 per barrel average forecasted in the organisation’s previous STEO released in May. Looking at 2022, the EIA now projects that Brent spot prices will average $60.49, which is a slight decrease compared to the $60.74 per barrel forecast made in its May STEO. The EIA highlighted in its June STEO that Brent crude spot prices averaged $68 in May, which it noted was $4 up from April. Brent prices were said to be higher in May as global oil inventories continued to decline. “In the coming months, we expect that global oil production will increase to match rising levels of global oil consumption,” the EIA said in its latest STEO. Owners of $100 options are making a leveraged bet that oil prices will hurtle higher after already surging more than 40 per cent this year. The roaring rally, on the back of easing worldwide pandemic restrictions, has lifted WTI prices to their highest level since 2018 at almost $70, according to oil market analysts. “In the coming months, we expect that global oil production will increase to match rising levels of global oil consumption,” the EIA said. Both contracts touched multi-year highs on June 4 before settling lower. The ICE Brent contract last settled higher at $71.97 on May 20, 2019, while the NYMEX light sweet crude contract was last higher at $69.49 on July 19, 2018, S&P Global Platts data showed. Prices regained their upward momentum as the EIA's STEO reinforced expectations of a demand-led recovery in the oil markets that would result in a drawdown of global oil inventories. "Brent crude has once again hit its two-year high, with sentiments potentially supported by the EIA's June forecasts which reinforces the narrative of declining global oil inventories and a continued recovery in global oil consumption demand," said Yeap Jun Rong, market strategist at IG, in a note. Global oil production is expected to match the rising levels of global oil consumption, with oil production increasing largely as a result of easing Opec+ production cuts, according to the STEO. "We expect rising production will end the persistent global oil inventory draws that have occurred for much of the past year and lead to relatively balanced global oil markets in the second half of 2021," the EIA said in the report.
Oil Rises Yet Again As Bullish Demand Sentiment Skyrockets - Demand recovery due to the global success of the Covid vaccines was yet again the reason for oil price gains on Friday and the commodity reaching new multi-year highs. The trigger for Friday's trading performance was the International Energy Agency in its monthly report stating that the Organization of the Petroleum Exporting Countries (OPEC) and allies would need to boost output to meet demand by the end of 2022, as all indications were the world would recover to pre-pandemic levels far sooner than expected. The Paris-based agency stated, "OPEC+ needs to open the taps to keep the world oil markets adequately supplied," adding that "In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target." Also bolstering bullish sentiment was ANZ Research stating in a note that not only was road traffic returning to pre-Covid levels in North America and most of Europe, but "Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17 percent over the past two weeks, according to Eurocontrol," Accordingly, Brent on Friday settled up 17 cents at $72.69 per barrel (for the week it was up 1 percent); West Texas Intermediate settled up 62 cents at $70.91 per barrel (it was up 1.9 percent on the week). Goldman Sachs contributed to the bullish mood on Friday by saying in a note, “Rising vaccination rates are leading to higher mobility in the U.S. and Europe, with global demand estimated up 1.5 million bpd in the last month to 96.5 million bpd." K Yet another sign of a robust market: five sources with knowledge of the matter told media on Friday that Saudi Arabia will supply full volumes of July-loading crude to its Asia customers. And while it may be inevitable that the world is headed towards clean energy generation, Norway's petroleum and energy minister on Friday presented the government a white paper outlining how the country will meet its energy needs and reach climate goals; but instead of following the IEA's insistence that new oil, gas and coal fields need to be scrapped, the paper held firm on fossil fuels, noting that it will "facilitate a future-oriented Norwegian oil and gas industry capable of delivering production with low emissions within the framework of our climate policy.” Ship & Bunker N
Oil Prices Post Gains for the Week -- Oil posted its third straight weekly rise on improving demand, with the International Energy Agency warning the market will need extra supply next year. Futures in New York rose 1.9% this week, extending its rally to the highest settle since October 2018. The IEA said that OPEC and its allies will need to lift output to keep the market adequately supplied, though the agency predicted demand won’t reach pre-virus levels until late 2022. Meanwhile, road traffic in the U.S. and much of Europe is largely back to levels seen before the pandemic. “With nothing budging on U.S. supply and OPEC+ keeping production restrained,” prices should continue to move higher.” Underlining the market’s strength, West Texas Intermediate’s nearest contract closed at its highest premium against the subsequent month since February. Firming in the so-called prompt spread reflects tightening supplies. While U.S. crude futures have held above the key $70-a-barrel level, traders are grappling with the prospects of Iranian supply returning to the market. Talks between the Persian Gulf nation and world powers about a 2015 nuclear deal are set to resume over the weekend. Meanwhile, there are also risks to the demand outlook in parts of Asia and Latin America as many nations continue to grapple with Covid-19 cases. Among the more prominent moves in the oil market this week, the discount of U.S. benchmark crude futures against its global counterpart rallied to the narrowest since November. That’s driven some buyers from abroad to start shying away from Permian crudes with the narrow arbitrage making West Texas oil cargoes less attractive. West Texas Intermediate for July delivery rose 62 cents to settle at $70.91 a barrel. Brent for August settlement advanced 17 cents to $72.69 a barrel, posting a 1.1% weekly gain. The IEA said OPEC+ will need to add about 1.4 million barrels a day -- less if Iran clinches a deal to remove U.S. sanctions. That would leave the group with another 5.5 million barrels a day of capacity offline, it said, though Bloomberg calculations suggest the buffer isn’t quite as high. Separately, gasoline cracks in New York fell to the lowest since March on Friday. U.S. President Joe Biden’s administration is weighing options to give relief to U.S. oil refiners from biofuel blending mandates, Reuters reported.
IEA Tells OPEC To “Open The Taps” - Oil prices climbed on Friday as the IEA boosted optimism about global oil demand recovery. The U.S. Department of the Treasury said on Thursday it is removing several Iranian officials from its list of designated persons, including three directors of the National Iranian Oil Company (NIOC). Oil prices declined on the news. In early trading Friday, oil was back up, on positive economic news in the U.S. and accelerating global vaccination campaigns, according to Rystad Energy. But the firm warned that there is going to be rising pressure on OPEC+ to loosen production constraints in order to avoid the oil market overheating. The IEA said that global oil demand will rebound past pre-pandemic levels by the end of 2022. After declining by 8.6 mb/d in 2020, oil demand will rebound by 5.4 mb/d this year, and by another 3.1 mb/d next year. The agency reiterated that OPEC and its allies needed to “open the taps” to boost oil production and keep the world well supplied. Lordstown Motors, a SPAC aimed at manufacturing EV pickups out of an old GE plant in Ohio,disclosed that it does not have sufficient cash to start commercial production and issued a going concern warning through the end of the year. Lordstown was one of several EV SPACs that went public in the last year. The Interior Departmentsaid on Tuesday that it will examine potential areas of the Gulf of Mexico that are suitable for offshore wind. Rising costs for labor, freight, steel, and aluminum are pushing up the cost of solar power, ending more than a decade of steady cost declines, at least temporarily. Contract prices for solar were already up 15% in the United States in the first quarter compared with last year due to higher interconnection and permitting costs. There is uncertainty over how long the cost increase will last.
Fire And Explosion Hit Iran Steel Mill In Third Such Incident In Five Days -Saturday evening a large fire and a strong explosion rocked an Iranian steel mill in Zarand, Kerman Province, in the third such incident in less than a week. Officials said that after hours of battling the fire they were able to extinguish it without loss of human life. Local officials in Zarand reported late Saturday that a blaze and an explosion engulfed one of the furnaces. The director of Zarand Steel Mill said several people were injured but no was was killed. Three days earlier, an explosion and a fire in a refinery ten miles south of the capital Tehran became a spectacle to 9 million residents as it burned for 20 hours. No evacuations took place, and the government did not mention possible health hazards. Reports said that 20 storage tanks where waste fuel was kept completely burned. Another explosion followed by a fire sank Iran’s largest naval vessel in the Sea of Oman, near it shores, on June 2. The government has not issued any official report on the cause of any of the three incidents, as the Islamic Republic is gearing up to choose a president in 12 days. In all three incidents suspicion of sabotage, evident in social-media speculation, was inevitable with continuing Israeli threats against the Islamic Republic, following a series of spectacular attacks against high-value targets since July 2020 that are widely believed to have been the work of Israeli intelligence. Iran’s main uranium enrichment facility in Natanz experienced two catastrophic attacks in less than10 months, with explosions and fires destroying crucial enrichment machines and inflicting serious damage in July 2020 and April 2021. An interesting twist in the Zarand incident is a report by a local media outlet that said personnel were evacuated as the possibility of an explosion “was predicted hours earlier” and no one was present where the fire broke out. While this cannot be verified, an official of the steel mill said the reason for the incident will be investigated once the fire is completely extinguished. According to local sources the explosion was so strong that people in villages and surrounding regions of Zarand were jolted.
Zaid Jilani: Push to oust Netanyahu won't intice change -Journalist Zaid Jilani says even if Israeli Prime Minister Benjamin Netanyahu is ousted from power, it is unlikely to spark meaningful change in the country. "I think in the United States based on the interests of people here [whoever is in charge] it does not really matter, they'll want to maintain an ironclad relationship with the United States and basically the same policy visa vie Palestinians," Jilani said. Last week, opposition parties in Israel confirmed they had reached an agreement that would establish a ruling coalition that would seek to replace Netanyahu, who has been in power in Israel for over a decade. "Its notable that [Naftali] Bennett who is expected to be the next prime minister, is very vocal that he doesn't agree with the Palestinian state, he does not think its worth it for Israel," Jilani said. "Whereas Netanyahu at least in the past suggested he would be open to it."
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