and gasoline exports were at a 26 month low…
Oil prices finished higher for the 7th straight week after OPEC decided to only add the minimum to global supplies in the coming months....after rising 2.6% to $75.88 a barrel last week as rising global demand amid tight supplies more than offset higher US inventories, the contract price for US light sweet crude for November delivery jumped early on Monday after reports emerged that the Joint Ministerial Monitoring Committee of the OPEC+ alliance had recommended that oil producers stick to their current plan and ease their cuts by just 400,000 barrels per day, and then rocketed to a 7 year high after OPEC and other producers doubled down on their earlier plans to increase oil output at a gradual rate, before settling $1.74 higher at $77.62 a barrel, still the highest closing price since 2014...the oil price rally on the OPEC decision continued on Tuesday, with the November contract price rising another $1.31 to another 7 year high at $78.93 a barrel, with crude prices also supported by a Goldman forecast that power generation could add an extra 650,000 barrels a day to oil demand this winter as record global natural gas prices incentivize power generators to switch from gas to oil....however, oil prices dipped in overnight trading after the American Petroleum Institute reported the 2nd straight week of unexpected inventory builds, and then slid from its prior seven year high early Wednesday on that API report, and on Saudi Arabia's decision to cut nearly all of its November crude prices for Asia, European and U.S.-bound cargoes, and then went on to settle $1.50 or 2% lower at $77.43 a barrel, after the EIA confirmed the API's report of higher inventories and Russian President Vladimir Putin indicated that his country would ramp up natural gas exports to help stabilize European energy markets...oil prices extended thier losses from the previous session on Thursday, falling below $75 a barrel, after Energy Secretary Jennifer Granholm said the US was considering selling oil from its strategic reserves, and as Russia said it was ready to stabilise the natural gas market, but rallied in the afternoon to settle 87 cents higher at $78.30 a barrel after the U.S. Department of Energy walked back their plans for an SPR release and an export ban and after Biden's national security adviser urged energy suppliers to lift flows to meet demand, saying that the United States is concerned about their failure to do so....oil prices continued rising overnight with the return of China to the markets, and opened 56 cents higher in New York on Friday, and then jumped to over $80 a barrel for the first time since October 2014 on a retreat in the U.S. dollar index, triggered by a weaker-than-expected September employment report, before settling $1.05 higher on the day at $79.35 a barrel, as the global energy crunch boosted U.S. prices to their highest in almost seven years as big power users struggled to meet demand....oil prices thus finished the week with a 4.6% increase, at their highest since October 31st, 2014,
With several news sites citing a "7 year high" for oil prices on Monday, Tuesday, and again on Friday, we'll put up a longer term oil price graph to see what that looks like....
The above is a screenshot of the current interactive oil price chart from barchart.com, which i have set to show front month oil prices monthly over the past 10 years, which means you're seeing the same oil prices that were quoted by the media....this same chart can be reset to show prices of front month or individual monthly oil contracts over time periods ranging from 1 day to 30 years, as the menu bar on the top indicates, and also to show oil prices by the minute, hour, day, week or month for each...each bar in the graph above represents the range of oil prices for a single month, with months when prices rose indicated in green, with the opening price at the bottom of the bar and the closing price at the top, and months when prices fell indicated in red, with the opening price at the top of the bar and the closing price at the bottom, while the small barely visible sticks above or below each monthly bar represent the extent of the price change above or below the opening and closing price during the month in question....likewise, the bars across the bottom show trading volume for the front month oil contract, for the months in question, again with up months indicated by green bars and down months indicated in red....
To find the month when oil prices were last as high as this week's, i've maneuvered my cursor to the month when prices were last at the $80 a barrel level we saw on Friday of this week...that turned out to be November 2014, which you can see by the readout of that month which has been generated by my cursor in small red print at the upper left of the graph, and which shows that the 'crude light' oil contract for December 2014 (CLZ14) opened that month priced at $80.59 a barrel, and closed that month priced at $66.16 a barrel....while that would seem to indicate that oil saw prices above this week's high of $80.11 a barrel early in November of 2014, i'd note that the Wall Street Journal affiliate website Marketwatch puts the date at October 31st, 2014...it could be that they are citing a different oil contract than the CLZ14 contract this graph shows for November...whatever the case, while one could say oil prices were at a 7 year high, we can see that the last time oil prices were as high at they were this week was just short of seven years ago...
Meanwhile, natural gas prices finished lower for the first time in the past eight weeks on the largest increase in US natural gas inventories in over a year....after rising 8.1% to $5.619 per mmBTU last week as natural gas shortages in Europe and Asia drove their prices to record levels, the contract price of natural gas for November delivery opened higher on Monday and rose 14.7 cents to $5.766 per mmBTU, on forecasts that power generators would burn more of the fuel during the week than was previously expected, as lingering heat was still expected to keep A/C demand high in some parts of the country...US prices then surged 54.6 cents or 9.5% to $6.312 per mmBTU on Tuesday, as prices in Europe rocketed over 21% for November gas and by 23% for December gas to fresh record highs, on worries European countries would not have enough natural gas stored for winter, as China and other Asian LNG buyers bid up prices for available cargoes...while US prices opened higher again on Wednesday, they quickly dropped 63.7 cents or over by more than 10% to $5.675 per mmBTU, after Vladimir Putin said Russia was ready to pump more gas to help stabilize European energy markets and US traders shifted focus back to domestic markets, where expectations were that supplies had grown more than normal for a fourth week in a row.... however, even after the EIA reported more natural gas had been added to storage than anyone had expected, natural gas prices ended Thursday virtually unchanged, settling up just two-tenths of a cent at $5.677 per mmBTU...US natural gas prices then slid 11.2 cents to $5.565 per mmBTU on Friday, on a drop in global gas prices and on forecasts for mild weather to keep heating demand at a minimum through late October, thus ending 1.0% lower for the week...
The EIA's natural gas storage report for the week ending October 1st indicated that the amount of working natural gas held in underground storage in the US rose by 118 billion cubic feet to 3,288 billion cubic feet by the end of the week, which still left our gas supplies 532 billion cubic feet, or 13.9% below the 3,820 billion cubic feet that were in storage on October 1st of last year, and 176 billion cubic feet, or 5.1% below the five-year average of 3,464 billion cubic feet of natural gas that have been in storage as of the1st of October in recent years...the 118 billion cubic foot increase in US natural gas in working storage this week was the largest weekly addition to storage since June 19th of last year, was more than the forecast for a 111 billion cubic foot addition from a survey of analysts queried by S&P Global Platts, and well more than the average addition of 81 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, and also well more than the 75 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 October 1st indicated that after an increase in our oil imports, a big drop in our oil exports, and an increase in our oilfield production, we had surplus oil to add oil to our stored commercial crude supplies for the second time in nine weeks and for the thirteenth time in the past forty-six weeks….our imports of crude oil rose by an average of 483,000 barrels per day to an average of 6,552,000 barrels per day, after rising by an average of 87,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 906,000 barrels per day to an average of 2,114,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,921,000 barrels of per day during the week ending October 1st, 1,389,000 more barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was reportedly 200,000 barrels per day higher at 11,300,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 16,221,000 barrels per day during the cited reporting week…
meanwhile, US oil refineries reported they were processing an average of 15,744,000 barrels of crude per day during the week ending October 1st, 330,000 more barrels per day than the amount of oil they processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 204,000 barrels of oil per day were being added to 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 and from oilfield production was 273,000 barrels per day more than what was added to storage plus 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 (-273,000) 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 balance sheet fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed...moreover, since last week’s unaccounted for oil was at (+1,310,000) barrels per day, there was an 1,583,000 barrel per day balance sheet difference in the crude oil fudge figure from a week ago, thus rendering the week over week supply and demand changes indicated by this report nonsense….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 reasonably 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 6,453,000 barrels per day last week, which was 22.7% more than the 5,258,000 barrel per day average that we were importing over the same four-week period last year…the 204,000 barrel per day net increase in our crude inventories came as 335,000 barrels per day were added to our commercially available stocks of crude oil, while 131,000 barrels per day were pulled out from our Strategic Petroleum Reserve, part of an emergency loan of oil to Exxon in the wake of hurricane Ida….this week’s crude oil production was reported to be 200,000 barrels per day higher at 11.300,000 barrels per day because the EIA"s rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day higher at 10,900,000 barrels per day, while a 10,000 barrel per day increase in Alaska’s oil production to 448,000 barrels per day had no impact on the reported rounded national production total….US crude oil production had hit a pre-pandemic 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 13.7% below that of our pre-pandemic production peak, but 34.1% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016…
meanwhile, US oil refineries were operating at 89.6% of their capacity while using those 15,744,000 barrels of crude per day during the week ending October 1st, up from 88.1% of capacity the prior week, and near normal utilization for early autumn refinery operations…the 15,744,000 barrels per day of oil that were refined this week were 13.7% more barrels than the 13,853,000 barrels of crude that were being processed daily during the pandemic impacted week ending October 2nd of last year, and also 0.6% more than the 15,656,000 barrels of crude that were being processed daily during the week ending September 27th, 2019, when US refineries were operating at what was then a below normal 85.7% of capacity in the wake of tropical storm Imelda…
even with this week’s increase in the amount of oil being refined, the gasoline output from our refineries was lower, decreasing by 523,000 barrels per day to 9,366,000 barrels per day during the week ending October 1st, after our gasoline output had increased by 246,000 barrels per day over the prior week.…this week’s gasoline production was 1.6% less than the 9,522,000 barrels of gasoline that were being produced daily over the same week of last year, and 7.0% lower than the gasoline production of 10,066,000 barrels per day during the week ending October 4th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 130,000 barrels per day to 4,778,000 barrels per day, after our distillates output had increased by 194,000 barrels per day over the prior week…after this week’s increase, our distillates output was 5.4% more than the 532,000 barrels of distillates that were being produced daily during the week ending October 2nd, 2020, while still 1.2% below the 4,835,000 barrels of distillates that were being produced daily during the week ending October 4th, 2019..
despite the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the twelfth time in twenty-six weeks, and for the 20th time in forty-five weeks, rising by 193,000 barrels to 221,809,000 barrels during the week ending October 1st, after our gasoline inventories had increased by 193,000 barrels over the prior week...our gasoline supplies increased by more this week even though the amount of gasoline supplied to US users rose by 28,000 barrels per day to 9,427,000 barrels per day because our imports of gasoline rose by 99,000 barrels per day to 1,088,000 barrels per day while our exports of gasoline fell by 321,000 barrels per day to a sixteen month low of 404,000 barrels per day…even after this week’s inventory increase, our gasoline supplies were 0.7% lower than last October 2nd's gasoline inventories of 226,747,000 barrels, and about 1% below the five year average of our gasoline supplies for this time of the year…
meanwhile, even with the increase in our distillates production, our supplies of distillate fuels decreased for the sixth time in eight weeks and for the 17th time in 26 weeks, falling by 396,000 barrels to 129,331,000 barrels during the week ending October 1st, after our distillates supplies had increased by 384,000 barrels during the prior week….our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 392,000 barrels per day to 4,365,000 barrels per day, while our imports of distillates fell by 2,000 barrels per day to 298,000 barrels per day, and even though our exports of distillates fell by 152,000 barrels per day to 768,000 barrels per day…but after seventeen inventory decreases over the past twenty-six weeks, our distillate supplies at the end of the week were 24.7% below the 171,796,000 barrels of distillates that we had in storage on October 2nd, 2020, and about 11% below the five year average of distillates stocks for this time of the year…
meanwhile, with the increase in our oil imports and the decrease in our oil exports, our commercial supplies of crude oil in storage rose for the sixth time in the past twenty weeks and for the 17th time in the past year, increasing by 2,345,000 barrels over the week, from 418,542,000 barrels on September 24th to 420,887,000 barrels on October 1st, after our commercial crude supplies had increased by 4,578,000 barrels the prior week…after this week’s increase, our commercial crude oil inventories remained about 7% below the most recent five-year average of crude oil supplies for this time of year, but were still 26.3% above the average of our crude oil stocks at the beginning of October over the 5 years at the beginning of the past 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 and remained elevated for most of the year after that, our commercial crude oil supplies as of this October 1st were 14.6% less than the 492,927,000 barrels of oil we had in commercial storage on October 2nd of 2020, and are now 1.1% less than the 425,569,000 barrels of oil that we had in storage on October 4th of 2019, but still 2.6% more than the 409,951,000 barrels of oil we had in commercial storage on October 5th of 2018…
finally, with our inventory of crude oil and and our supplies of all products made from oil still near multi year lows, we'll continue to check the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....we find that total inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, fell by an inconsequential 114,000 barrels this week, from 1,851,676,000 barrels on September 24th to 1,851,562,000 barrels on October 1st, after they had risen 10,049,000 barrels from a six year low the prior week..
This Week's Rig Count
The number of drilling rigs active in the US increased for 47th time out of the past 55 weeks during the week ending October 8th, but they still remained 32.6% below the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US increased by five to 533 rigs this past week, which was also 264 more rigs the pandemic hit 269 rigs that were in use as of the October 9th report of 2020, but was still 1,396 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a 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 5 to 433 oil rigs this week, after oil rigs had risen by 7 oil rigs the prior week, and there are 240 more oil rigs active now than were running a year ago, while they still amount to just 26.5% the 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 unchanged at 99 natural gas rigs, which was still up by 26 natural gas rigs from the 73 natural gas rigs that were drilling during the same week a year ago, but still only 6.2% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….in addition to oil and gas rigs, a horizontal rig that Baker Hughes classifies as "miscellaneous' continues to drill in Kern county California, while a year ago there were three such "miscellaneous' rigs reported to be active...
The Gulf of Mexico rig count was down by 1 rig to ten rigs this week, which is also short of the 14 rigs deployed in the Gulf the week before Hurricane Ida approached, with nine of this week's Gulf rigs drilling for oi in Louisiana waters and another drilling for oil in Alaminos Canyon, offshore from Texas....the Gulf rig count is also down by 4 rigs from a year ago, when 12 Gulf rigs were drilling for oil offshore from Louisiana and two were deployed for oil in Texas waters….in addition, one of the two rigs that had been drilling for natural gas off the shore of the Kenai peninsula in Alaska was shut down this week, and hence this week's total national offshore rig count of 11 rigs is down by two from last week and down by three rigs from the 14 offshore rigs running a year ago, when there was no drilling off Alaska or off our other coasts...
In addition to those rigs offshore, we continue to have two water based rigs drilling inland; one is a directional rig targeting oil at a depth of over 15,000 feet, drilling from an inland body of water in Plaquemines Parish, Louisiana, near the mouth of the Mississippi, and the other is drilling for oil in the Galveston Bay area, and hence the inland waters rig count of two is up from one from a year ago..
The count of active horizontal drilling rigs was up by 9 to 483 horizontal rigs this week, which was more than double the 233 horizontal rigs that were in use in the US on October 9th of last year, but was just 35.2% of the record 1,374 horizontal rigs that were deployed on November 21st of 2014..…on the other hand, the vertical rig count was down by 4 to 28 vertical rigs this week, but those were still up by 13 from the 15 vertical rigs that were operating during the same week a year ago….at the same time, the directional rig count was unchanged at 22 directional rigs this week, and those are now up by 1 from the 21 directional rigs that were in use on October 9th 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 October 8th, the second column shows the change in the number of working rigs between last week’s count (October 1st) and this week’s (October 8th) count, the third column shows last week’s October 1st 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 9th of October, 2020...
as you can see, that modest 5 rig increase masked a somewhat larger number of changes across several states and basins....checking theRigs by State file at Baker Hughes for changes in the Texas Permian basin, we find that we find that four rigs were added in Texas Oil District 8, which is the core Permian Delaware, while one rig was removed from Texas Oil District 8A, which includes the northern counties of the Permian Midland, thus netting out to a three rig increase in the Texas Permian, and thus accounting for the changes in the Permian basin this week....elsewhere in Texas, we also have a rig added in Texas Oil District 4, which would account for this week's Eagle Ford shale increase, and also bring the Texas rig count change up to +4, as we see on the state table above...the rig added in California was deployed in a basin that Baker Hughes doesn't track, as was the rig added in Oklahoma, and since Alaska's count shows no change despite the offshore rig shutdown, we have to assume a land based rig was concurrently added elsewhere in the state, also in a basin that Baker Hughes keep track of....meanwhile, the oil rig removed from the Gulf of Mexico accounts for the rig decrease in Louisiana...the remaining changes were all to natural gas rigs in the Appalachain basin and netted out to no change in gas rigs this week; two natural gas rigs were added in the Marcellus in West Virginia, while a single natural gas rig was removed from the Marcellus in Pennsylvania, and another natural gas rig was shut down in Ohio's Utica shale...
Austin Master Services Responds to Concerns About Martins Ferry Facility - Austin Master Services spokesman Christopher Martin says the Martins Ferry frack waste processing facility has made $2 million in improvements and is apprising the city’s fire department of its emergency response plans.Martin released the information on the heels of local residents expressing concern about the facility, which processes radioactive waste from the natural gas and oil fracking industry. Martin said the waste processed at the building, which once was part of Wheeling-Pittsburgh Steel, arrives there wet.“It is important to know that all waste that arrives at our facility is wet — this means that the material must go through a process similar to the local wastewater treatment facility. Water is removed from the material through various steps and then dried. Once it is dried our team prepares the material for removal to a landfill or a radioactive waste facility,” he said.“I must clarify one very big fact that is being misconstrued — Austin Master Services does not create waste at the facility. The material we receive includes brine, wet sand, sludge, dry solids, debris, and filters.”Members of the Concerned Ohio River Residents have expressed worries about the facility receiving past citations from the Ohio Department of Natural Resources regarding handling of waste at the facility. ODNR has cited the company for having overflowing bins and having waste stored directly on the floor. One of CORR’s main concerns has been protecting the city’s drinking water from any possible contamination of the aquifer the city water treatment plant draws from. CORR is concerned that Austin Master and the waste it receives could impact the underground well fields. It also has pointed out the facility is located within the city’s Source Water Protection Area. Martin said Austin Master Services is complying with ODNR regulations regarding containment of waste.
State prosecutors abruptly halt pipeline probe announcement | Pittsburgh Post-Gazette — Pennsylvania’s attorney general abruptly canceled a news conference Monday at which he was apparently poised to announce criminal charges against the developer of a pipeline network that transports natural gas liquids across southern Pennsylvania.Attorney General Josh Shapiro had scheduled an event at Marsh Creek State Park in Downingtown, where Sunoco Pipeline LP spilled more than 8,000 gallons of drilling fluid last year. The spill, during construction of the troubled Mariner East 2 pipeline, fouled wetlands, a stream and part of a 535-acre lake.Mr. Shapiro’s office had billed it as a “major environmental crimes case,” and a YouTube page set up to carry the announcement was headlined “AG Shapiro Charges Mariner East Developer With Environmental Crimes.” But the page was quickly yanked down, and the state’s top prosecutor postponed the news conference a little more than 20 minutes before it was scheduled to begin.Mr. Shapiro’s office said it had received “new information” on Monday morning, adding: “We must do our due diligence and review. We will have more to say on this shortly.”The statement did not elaborate, and Mr. Shapiro’s spokesperson had nothing more to add later Monday. Messages seeking comment were sent to Sunoco and its owner, Dallas-based pipeline giant Energy Transfer.The August 2020 spill at Marsh Creek was among a series of incidents that has plagued Mariner East since construction began in 2017, making it one of the most penalized projects in state history.The company has paid more than $16.4 million in fines for polluting waterways and drinking water wells, including a $12.6 million fine in 2018 that was one of the largest ever imposed by the state Department of Environmental Protection. State regulators have periodically shut down construction.But environmental activists and homeowners who assert their water has been fouled say that fines and periodic shutdown orders have not forced Sunoco to clean up its act. They have been demanding revocation of Mariner East’s permits.
Charges Against PA Pipelines - --Pennsylvania Attorney General Josh Shapiro announced criminal charges on Tuesday, 10/5, against the developer of gas pipelines in the state. The news conference was held at Marsh Creek State Park in Downingtown which was the site of an August 2020 gas spill from the Sunoco Pipeline LP. Energy Transfer, Sunoco's parent company, faces 48 criminal counts. They are accused of releasing industrial waste at 22 sites in 11 counties. Shapiro says the charges are for "illegal behavior that related to the construction of the Mariner East 2 pipeline that polluted our lakes, our rivers and our water wells and put Pennsylvania’s safety at risk." The Mariner East 2 pipeline transports propane, ethane and butane from the enormous Marcellus Shale and Utica Shale gas fields in Western Pennsylvania to refineries and export terminals in Marcus Hook, PA. "There is a duty to protect our air and water, and when companies harm these vital resources through negligence - it is a crime," AG Shapiro said. "By charging them, we can both seek to hold them criminally accountable and send a clear message to others about how seriously we take protecting the environment and public health."
Pipeline Developer Charged Due to Drinking Water Contamination in Pennsylvania -Pennsylvania’s attorney general filed criminal charges against the developer of a pipeline that takes natural gas liquids from the Marcellus Shale gas field to an export terminal near Philadelphia.According to Attorney General Josh Shapiro, Sunoco Pipeline LP, owned by Energy Transfer, spilled thousands of gallons of drilling fluid in Pennsylvania in 2020, reported CBS Pittsburgh. Energy Transfer faces 48 criminal charges, most of them for releasing industrial waste at 22 sites in 11 counties across the state, contaminating the drinking water of at least 150 families statewide.“There is a duty to protect our air and water, and when companies harm these vital resources through negligence — it is a crime,” said AG Shapiro in a press release. “By charging them, we can both seek to hold them criminally accountable and send a clear message to others about how seriously we take protecting the environment and public health.”The spill occurred during construction of the Mariner East 2 pipeline, impacting wetlands, a stream and part of a 535-acre lake, reported CBS Pittsburgh. The Mariner East 2 Pipeline project crosses 17 counties in the southern tier of Pennsylvania. According to the AG press release, Energy Transfer received permits that allowed horizontal directional drilling as the construction method, repeatedly allowed thousands of gallons of drilling fluid to escape underground. The multibillion-dollar pipeline project has been under critical watch; A statewide grand jury subpoenaed the company for documents relating to the release of drilling fluids and effects on water supplies.One resident found that testing revealed that she had high concentrations of E. coli and fecal coliform in her water. According to Energy Transfer in a recent earnings report, the attorney general has been looking at “alleged criminal misconduct involving the construction and related activities of the Mariner East pipelines.”
Pa. attorney general announces criminal charges against Mariner East pipeline owner for leaks Pennsylvania's attorney general filed criminal charges Tuesday against the developer of a problem-plagued pipeline that takes natural gas liquids from the Marcellus Shale gas field to an export terminal near Philadelphia. Attorney General Josh Shapiro announced the case at a news conference at Marsh Creek State Park in Downingtown, where Sunoco Pipeline LP spilled thousands of gallons of drilling fluid last year. The spill, during construction of the troubled Mariner East 2 pipeline, fouled wetlands, a stream and part of a 535-acre lake. "The case I am here to announce today began through a referral by the district attorneys in Chester, Delaware and Berks Counties," Shapiro said. "And it's important to note that while we are here in Chester County, this has had a broad impact across our commonwealth. From Washington and Westmoreland Counties in western Pennsylvania, to Blair and Huntingdon and Cumberland, all the way to Berks and Delaware, and of course, right here in Chester County and southeastern Pennsylvania." Energy Transfer, Sunoco's owner, faces 48 criminal charges, most of them for releasing industrial waste at 22 sites in 11 counties across the state. Shapiro said Energy Transfer contaminated the drinking water of at least 150 families statewide. The charges are for “illegal behavior that related to the construction of the Mariner East 2 pipeline that polluted our lakes, our rivers and our water wells and put Pennsylvania’s safety at risk,” said Shapiro, speaking with Marsh Creek Lake behind him. Messages were sent to Energy Transfer seeking comment. The multibillion-dollar pipeline project has been the focus of criminal probes. At one point, a statewide investigating grand jury subpoenaed the company for documents relating to the inadvertent release of drilling fluids and effects on water supplies. The August 2020 spill at Marsh Creek was among a series of episodes that has plagued Mariner East since construction began in 2017, making it one of the most penalized projects in state history. The company has paid more than $16.4 million in fines for polluting waterways and drinking water wells, including a $12.6 million fine in 2018 that was one of the largest ever imposed by the state Department of Environmental Protection. State regulators have periodically shut down construction. But environmental activists and homeowners who assert their water has been fouled say that fines and periodic shutdown orders have not forced Sunoco to clean up its act. They have been demanding revocation of Mariner East’s permits. “...This company has no respect for Pennsylvania’s laws, our communities, and our shared natural resources,” said PennFuture President and CEO Jacquelyn Bonomo. “This is a company that has routinely contaminated drinking water supplies, fouled our wetlands, streams and lakes, and has been fined more than $16 million for its repeated failures to operate safely and within the bounds of Pennsylvania law." "The Mariner East Pipeline has been a constant source of sinkholes, drinking water contamination, and drilling mud spills for the families in its path and we join the Attorney General in calling on the DEP to review their regulations and asking the legislature to pass meaningful legislation to hold polluters accountable," Parzen said. "Our families and neighbors have simply waited too long for justice for their poisoned land and water."
The Mariner East pipeline has spilled thousands of gallons of drilling fluid, contaminating land and water across Pennsylvania. Now the developer faces criminal charges. - The corporate developer of a multibillion-dollar pipeline system that takes natural gas liquids from the Marcellus Shale gas field to an export terminal near Philadelphia was charged criminally on Tuesday after a grand jury concluded that it flouted Pennsylvania environmental laws and fouled waterways and residential water supplies across hundreds of miles.Attorney General Josh Shapiro announced the sprawling case at a news conference at Marsh Creek State Park in Downingtown, where Sunoco Pipeline LP spilled thousands of gallons of drilling fluid last year. The spill, during construction of the troubled Mariner East 2 pipeline, contaminated wetlands, a stream and part of a 535-acre lake.Energy Transfer, Sunoco’s owner, faces 48 criminal charges, most of them for illegally releasing industrial waste at 22 sites in 11 counties across the state. A felony count accuses the operator of willfully failing to report spills to state environmental regulators.Shapiro said Energy Transfer ruined the drinking water of at least 150 families statewide, releasing a grand jury report that includes testimony from numerous residents who accused Energy Transfer of denying responsibility for the contamination and then refusing to help.The Texas-based pipeline giant was charged for “illegal behavior that related to the construction of the Mariner East 2 pipeline that polluted our lakes, our rivers and our water wells and put Pennsylvania’s safety at risk,” said Shapiro, speaking with Marsh Creek Lake behind him.Messages were sent to Energy Transfer seeking comment. The company has previously said it intends to defend itself.The company faces a fine if convicted, which Shapiro said was not a sufficient punishment. He called on state lawmakers to toughen penalties on corporate violators, and said the state Department of Environmental Protection — which spent freely on outside lawyers for its own employees during the attorney general’s investigation — failed to conduct appropriate oversight.Residents who live near the pipeline and some state lawmakers said Mariner East should be shut down entirely in light of the criminal charges, but the administration of Democratic Gov. Tom Wolf has long ignored such calls to pull the plug. There was no immediate comment from Wolf’s DEP. The August 2020 spill at Marsh Creek was among a series of mishaps that has plagued Mariner East since construction began in 2017. Early reports put the spill at 8,100 gallons, but the grand jury heard evidence the actual loss was up to 28,000 gallons. Parts of the lake are still off-limits.
Adorers of Blood of Christ lose court battle challenging natural gas pipeline - A religious order that has been challenging construction of a natural gas transmission line through its Pennsylvania property for years expressed disappointment that a federal court judge dismissed their lawsuit rooted in religious freedom claims.Attorney Dwight Yoder, representing the Adorers of the Blood of Christ, said the dismissal of the lawsuit by U.S. District Judge Jeffrey Schmehl was not surprising, given the judge’s similar decisions in earlier claims against construction the Atlantic Sunrise pipeline and its builder, Transcontinental Gas Pipe Line Co.The lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania in Reading was grounded in the Religious Freedom Restoration Act, or RFRA. The Adorers had sought a trial to present evidence about the practice of their faith and their belief that as Christians they are called to protect creation from desecratio“The courts have consistently sided with the fossil fuel companies in these decisions, and we respectfully disagree with the judge,” Yoder told Catholic News Service Oct. 1, the morning following Schmehl’s ruling. “We think the Religious Freedom Restoration Act was adopted by Congress and Congress gave specific instructions. It’s supposed to trump and preempt other federal laws,” Yoder said. “Congress instructed the judiciary to apply that law to protect religious liberty. In this case that’s not what’s happening here. They’re protecting fossil fuel companies. We disagree with the court’s analysis.”
PA Landowners Get Class Action OK’d Against EQT re Gas Storage -- In July 2018, a group of 100+ southwestern Pennsylvania landowners sued EQT for failure to pay them rental fees for storing natural gas under their properties (see100+ PA Landowners Sue EQT re Gas Storage Field Payments). In July 2019, that same group filed a request in U.S. District Court to upgrade the lawsuit to class action status, potentially including thousands of affected landowners (see PA Landowners Seek Class Action Against EQT re Gas Storage). Good news (for the landowners): The judge in the case agrees with their petition and is upgrading the case to class action status.
Owners Alleging EQT Mooches Gas Storage Get Class Status -- A Pennsylvania federal judge agreed with more than 100 Pennsylvania landowners that a class action is the best way to resolve their claims that EQT Corp. has improperly stored natural gas beneath their homes without paying them. In an order Wednesday, U. S. District Judge Cathy Bissoon said she is prepared to certify the group of landowners once they and EQT hash out some final details about who qualifies as a class member. The judge said the evidence shows EQT was aware they needed to secure land-use rights to store gas in the caverns beneath the landowners' property and compensate landowners accordingly,. . .
Seneca Resources seeks certification for Appalachian production - Pennsylvania natural gas producer Seneca Resources Co. recently announced it entered into an agreement with Project Canary, a company aiding the oil and gas industry to operate cleaner and more efficiently, to obtain an independent responsibly sourced gas (RSG) certification for approximately 300 million cubic feet per day of the company’s Appalachian production. Project Canary’s certification process focuses on air, land, water, and community impacts and analyzes more than 600 unique operational and environmental, social, and governance (ESG)-related data points. The certification process will cover nearly one-third of Seneca’s natural gas production. “Sustainability, continuous innovation, and best-in-class environmental performance are embedded in our guiding principles and culture,” David Bauer, National Fuel president and CEO, said. “Seneca’s commitment with Project Canary seeks to independently verify our existing operational practices and further strengthen the Company’s ESG commitments. We are excited to work towards independent validation of our leading operational and environmental practices, many of which are standard across our Appalachia assets.” Seneca plans to install continuous monitoring devices at three well-pad locations to provide real-time, site-level emissions data. Seneca is the exploration and production segment of National Fuel Gas Co. and produces natural gas and oil reserves in the Appalachian Region, including the Marcellus and Utica Shale.
Should oil and gas companies be exempt from Pennsylvania's hazardous waste laws? - Environmental Health News —In the wake of growing concerns over the oil and gas industry's handling of radioactive waste, activists and policymakers are working to change laws that exempt the industry from safety regulations.For decades, national environmental organizations have tried unsuccessfully to close federal loopholes that exempt the oil and gas industry's radioactive waste—which has been linked to elevated cancer rates—from regulation. Industry and government reports indicate that these exemptions persist because the cost of treating the waste as hazardous would be tremendous.Meanwhile, other industries that generate radioactive waste—like nuclear energy, research, and pharmaceutical industries—are meticulously regulated by multiple federal agencies."Radioactive wastes generated by these industries are regulated differently depending on the particular sources of radiation involved and risks posed from exposure, contamination, and accident potential," Aaron Flyer, an environmental lawyer in Washington, D.C. who is a former nuclear engineer, told EHN."The Nuclear Regulatory Commission (NRC) doesn't get involved unless you're operating under an NRC license," Flyer explained. "The oil and gas industry isn't generating radioactive materials for commercial use or disposing of [waste] regulated under the Atomic Energy Act of 1954, which would require an NRC license, even though their operations pick up naturally occurring radioactive materials—it's just incidental to their operations."In Pennsylvania, these legislative loopholes have resulted in radioactive oil and gas waste at municipal landfills and sewage treatment plants that aren't equipped to handle it, being intentionally spread on roadways and farmland, and contaminating waterways used for drinking water, fishing, and swimming.Now, amid growing concerns about potential cancer risk associated with that waste, community advocates and some policymakers in Pennsylvania are trying to close loopholes at the state level—while also trying to prevent neighboring states from bearing the burden as a result."We've blindly trusted this industry for the past decade and we're seeing worse health impacts and weakened water quality. It's time for elected officials to start protecting us," Veronica Coptis, executive director of the nonprofit Center for Coalfield Justice, told EHN.Pennsylvania legislators have introduced three bills that would close the state's loopholes, and the Center for Coalfield Justice is collecting signatures for a petition supporting that legislation.
After PennEast is canceled, what is the status of this Lehigh Valley pipeline project? - - Thr PennEast Pipeline is canceled, but another natural gas pipeline project touching the Lehigh Valley is proceeding as planned. First proposed in 2017, two years after PennEast, Adelphia Gateway LLC is repurposing an existing pipeline and adding new facilities between the Martins Creek Terminal in Lower Mount Bethel Township and Marcus Hook Industrial Complex in Delaware County. It “is independent of PennEast and is not impacted by the recent decision,” a spokeswoman told lehighvalleylive.com last week. PennEast announced Sept. 27 it “has ceased all further development” of a brand-new 120-mile pipeline linking Pennsylvania’s Marcellus Shale natural gas-production region to Mercer County, New Jersey. The decision came in the face of continued resistance on the New Jersey portion of the line. Adelphia Gateway is a subsidiary of NJR Pipeline Co., which itself is owned by New Jersey Resources Corp.The project repurposes an 84-mile-long, 18-inch-diameter pipeline built in the 1970s to carry oil, so that it can transport natural gas, and also includes use of a 4.4-mile-long, 20-inch-diameter natural gas line terminating at Martins Creek.Adelphia bought these former Interstate Energy lines from Talen Generation LLC for $189 million and is building $143 million worth of new facilities, for a total estimated project cost of $332 million. The project is designed to tie-in to existing pipelines and carry natural gas for domestic use, Adelphia Gateway says. The new facilities include two 5,625-horsepower compressor stations, one outside Quakertown in West Rockhill Township, Bucks County, and another at Marcus Hook in Lower Chisester Township, Delaware County. Adelphia last December told FERC it is building an additional 3,000-horsepower compressor at Marcus Hook to deliver natural gas to South Jersey Gas Co.
NJ gas pipeline station linked to climate change concerns — Federal officials have tied a certain, yet undefined concern over climate change impact to a proposal to develop and upgrade natural gas compressor stations in North Jersey. Federal Energy Regulatory Commission (FERC) staff said in an environmental impact statement that compressor station upgrades along the Tennessee Gas Pipeline Company's 300 Line in New Jersey and Pennsylvania would not result in significant environmental impacts, "with the exception of climate change." The pipeline project as proposed would develop a new electric-driven compressor turbine facility in a former quarry near the Monksville Reservoir in West Milford. Turbine upgrades are also planned at existing stations in Wantage and Pennsylvania. All three would pump 115,000 dekatherms of natural gas each day into Westchester County, New York, to end a Con Edison moratorium on new gas connections.Residents, municipal governing bodies and environmental nonprofits in New Jersey have contested the project due to concerns over ground and surface water impacts, air quality, safety, fracking and climate change, among other issues.
Plugging abandoned oil and gas wells could help save the environment – and jobs - CBS ---It is estimated there may be a few hundred thousand abandoned wells in Pennsylvania — some located in the woods, along riverbanks, in people's yards and even inside their homes. These wells are left behind — orphaned to the state — after their owners, often oil and gas companies, go bankrupt or when the wells fall into disrepair. Once in state hands, it is the government's responsibility to plug the wells when they break. The EPA estimates there may be over 2 million abandoned wells across the nation. In early June, we followed Don Cornell of the Pennsylvania Department of Environmental Protection to an emergency call in the town of Bradford to plug a leaking well in someone's backyard. "This old oil and gas well came in because the landowner had a complaint. He noticed he had a puddle of oil in his backyard," explained Cornell.Cornell says most of the wells that they deal with are from the early 1900s; there is no current owner and the companies are long gone or went bankrupt. "They didn't take care of the wells back when they were first drilled and walked away," he said."I've been in this position now for almost 11 years and I'm still amazed with what we come across, where the wells are in streams in the river — islands on the Allegheny River, there's wells there," Cornell said. Even inside people's houses?"Yep. In basements and foundations, they're just everywhere. And their driveways, when they don't know about it until one day oil start seeping up through their driveway."Leaking wells are not only a local environmental hazard — they can also be a big contributor to warming the climate. Dr. Tony Ingraffea, a Cornell University professor and expert in this field, says many of these wells leak methane — a greenhouse gas much more potent than carbon dioxide."Especially during the first 10 years, that methane molecule traps 100 times [the heat] that carbon dioxide does," Ingraffea explained. That's why he says says there is an urgency to plugging these wells: "Turn down methane and you get an immediate response." A new study by Ted Boettner of the Ohio Valley River Institute, a clean energy group, finds that plugging abandoned wells in the four-state area of Ohio, Kentucky, West Virginia and Pennsylvania alone could create over 15,000 jobs per year over 20 years.But in Boettner's view, the problem is just too big and money from the federal government can go a long way to help."In 2018 states only spent about $53 million. Plugging orphan wells, if you look at the entire problem, that number could be about over $60 billion around this country, just dealing with the orphan wells," he said. "So states are really struggling to deal with this problem. And this is a good example where the federal government can come in and provide some investment and get people back to work in jobs that they want to have."
As Massachusetts envisions a fossil fuel-free future, gas companies are quietly investing billions in pipelines - More than 21,000 miles of aging gas pipelines lie under the streets in Massachusetts, nearly enough to encircle the earth. When researchers began discovering about a decade ago that tens of thousands of leaks across that vast network discharged tons of hazardous methane into the air, the Legislature went to work. A law was passed, and in short order, gas companies embarked on a massive, years-long upgrade. Since then, the gas companies have slogged through a slow, expensive process of digging up pipes and replacing them with new ones meant to last more than half a century. Costs soared. And something else happened: The state passed a climate law that effectively called for the end of natural gas. Now, a detailed analysis of the cost and effectiveness of the program, to be released Monday, is raising questions among some experts about whether the program should be modified or even scrapped, potentially allowing money to flow to other climate-related needs. “The question people need to ask is: The world has changed; does this program really make sense any more given climate change, the fact that we’re moving toward a low-carbon economy, and that the Commonwealth has very aggressive climate mandates?” said Dorie Seavey, an economist who conducted the study on behalf of the advocacy group Gas Leaks Allies, a coalition of scientists, activists, and environmental organizations working to reduce methane emissions from natural gas. Seavey’s report analyzed records that gas companies are required to file to the state listing repairs they make under the program and the cost. The report found that the price tag of the pipeline replacement program has ballooned to $20 billion, an amount rivaling the Big Dig. According to the report, the program incentivizes replacing pipes over making repairs, which typically cost less and don’t last as long.
Advocates say they're being ignored in future-of-gas talks - As Massachusetts gas companies start legally mandated investigations into their role in a clean energy future, advocates are concerned that stakeholder voices calling for aggressive decarbonization, environmental justice, and a fair transition for fossil fuel workers are being shut out at a crucial moment in the process. While the gas companies contend they are committed to soliciting and incorporating stakeholder feedback, advocates say the utilities are failing to fully engage with their concerns. At the same time, the state has rejected advocates’ requests for increased oversight from regulators. “It’s important for our perspective to be at the center of this and right now it feels like we’re much more of an audience,” said Debbie New, a participant in the Gas Leaks Allies coalition. “When questions about labor, equity, health, or safety are asked, we are told they will consider them later, rather than making them integral to the process.” In June 2020, Massachusetts Attorney General Maura Healey asked the state’s department of public utilities to open an investigation into the future of the natural gas industry as the state moves toward its goal of reaching net-zero carbon emissions by 2050. The department launched the investigation in October of that year with the stated goal of developing “a regulatory and policy roadmap to guide the evolution of the gas distribution industry.” Only a handful of states have taken similar actions. Colorado announced a similar investigation on the same day as Massachusetts; New York and California began proceedings earlier in 2020.
Over town objections, $100M Charlton natural gas pipeline and facility slated for final approval -- A pipeline and natural gas liquidation plant proposed in Charlton was recommended for approval on Sept. 20 and will go up for a final vote before the Massachusetts Energy Facilities Siting Board next week, according to a notice on Mass.gov. Northeast Energy Center, LLC, which is registered to Philadelphia energy infrastructure company Liberty Energy Trust, is proposing construction of a liquefied natural gas facility and pipeline in Charlton. The project will cost $100 million, including the cost of land acquisition, according to the siting board's tentative decision report. The plant would liquefy pipeline natural gas, store the LNG, and load tanker trucks. It would be capable of storing 2 million gallons of LNG and producing up to 250,000 gallons per day, according to the siting board’s tentative decision. . In a letter on Sept. 24, the Charlton Planning Board expressed disappointment with the siting board’s tentative decision as it would exempt the project from zoning bylaws and exclude the town from formally reviewing the project.
Judge rules against Bullitt County landowners who sought review of LG&E pipeline decision - A judge quashed an effort by Bullitt County property owners who wanted a fresh look at a decision that let Louisville Gas & Electric Co. condemn land for a proposed natural gas pipeline. The group, whose land lies along the pipeline route, had argued that Bullitt Circuit Judge Rodney Burress had not considered whether the line will “primarily benefit” bourbon maker Jim Beam, which operates a plant in Clermont.But that’s not what Kentucky law requires, Burress wrote in rulings filed in late September. Instead, he noted, the law simply requires a utility to show that there is a public use.Buress concluded that the project “would undoubtedly serve a broader public purpose in addition to greatly benefitting Jim Beam.”The judge also wrote that the property owners “have yet to provide any evidence to counter the fact that 9,500 customers need reliable gas service and an additional 451 have been denied service.” And Burress dismissed other arguments made by landowners, concluding that there was nothing new that hadn’t already been considered in his original condemnation ruling in May. Among them was a “smoking gun” allegedly related to the pipeline route that the judge said wasn’t part of the eminent domain lawsuits.
Liberty Utilities seeks PUC OK for 20-year natural gas contract - Liberty Utilities on Wednesday made its case before the Public Utilities Commission to bring more natural gas to New Hampshire. At issue is a proposed 20-year contract between Liberty Utilities and the Tennessee Gas Pipeline, which would bring 40,000 dekatherms of natural gas per day to the state, a 20 to 25 percent increase to the company’s current capacity. The Conservation Law Foundation opposes the plan, arguing that Liberty has failed to consider lower cost alternatives. The contract needs approval from the PUC before it can be finalized. The Tennessee Gas Pipeline plan follows a few other failed proposals that Liberty put forward to procure more natural gas, a move the company says is necessary to meet customer demand and ensure reliability. Projects that Liberty has previously put forward but were later abandoned include the Northeast Energy Direct and Granite Bridge pipelines. Both of those projects were much larger and more costly than the agreement with Tennessee Gas Pipeline, which wouldn’t require new construction but would involve repairs and upgrades to existing infrastructure totaling $45 million. At the hearing, Liberty called on two of the company’s employees to testify about their role in preparing the agreement with Tennessee Gas Pipeline, including Liberty attorney Michael Sheehan, who called the pipeline a great solution for increasing natural gas capacity cheaply. The Conservation Law Foundation called one witness, David Hill, a managing consultant for a Vermont-based clean-energy consulting group called Energy Futures Group Inc. Hill testified that Liberty failed to consider alternatives that could reduce the need for natural gas, such as increasing energy efficiency or electrification. Hill has also testified that Liberty did not analyze the environmental impacts of pipeline updates as required by New Hampshire statute.
‘Completely out of the norm’: Central Virginia counties protest Chickahominy Pipeline plan — Louisa County asked the Virginia State Corporation Commission (SCC) on Sept. 27 to reject a company’s request that they be exempted from regulatory oversight on their plan to build a sprawling natural gas pipeline across five counties in central Virginia. As 8News previously reported that Chickahominy Pipeline, LLC petitioned the State Corporation Commission on Sept. 3 to issue a judgment releasing the company from oversight on its proposed pipeline. But in their new filing, Louisa County asked the SCC to reject Chickahominy Pipeline’s argument, saying the company should be subjected to state regulations on public utilities. Frustration with CPLLC among Louisa County’s board of supervisors was spurred on by concerns raised by residents and unresponsive company representatives. At a meeting of the Louisa County Board of Supervisors on Sept. 20, several residents came forward during a public comment period to voice their opposition to the pipeline, which would cross most of the county. “My big concern is that the state has set the goal of being through with any kind of fossil fuel energy generation by 2050,” said Steve Lucas. Company No-Show The Board of Supervisors had been in contact with CPLLC and had intended to hear from the company before filing a response with the SCC. Louisa County acquired maps of the pipeline’s proposed path through Encompass Energy, the company contracted to complete surveys of the land the pipeline would cross. Those maps were included as public exhibits for the meeting on Sept. 20, shown below.
Dominion Energy to sell Questar Pipeline to Southwest Gas for $1.9B - Richmond-based Dominion Energy Inc. has reached an agreement to sell its Questar Pipeline subsidiary to Las Vegas-based Southwest Gas Holdings Inc. for $1.975 billion, the Fortune 500 utility announced Tuesday. The all-cash deal includes the assumption of $430 million of debt. The transaction is expected to close in the fourth quarter. Questar Pipeline is an interstate natural gas pipeline business that provides natural gas transportation and underground storage services in Utah, Wyoming and Colorado. The company owns and operates 1,867 miles of natural gas pipeline. It transports gas for delivery to markets in the West and Midwest, including southern Idaho. Southwest Gas Holdings Inc. provides natural gas service to more than 2 million customers in Arizona, Nevada and portions of California. Dominion began divesting its natural gas holdings in November 2020, when the utility sold the majority of its gas transmission and storage assets to Berkshire Hathaway Energy for approximately $2.7 billion in cash. In July 2020, Dominion’s then-CEO, Thomas F. Farrell II, who died in April, said that the company was taking the action as part of a “narrowing of focus,” repositioning Dominion strategically with a pure-play focus on its “state-regulated, sustainability-focused utilities” business. The Questar Pipeline sale was originally part of the Berkshire Hathaway deal, but that portion of the transaction was terminated in July. Dominion chalked up the termination decision to ongoing uncertainty associated with achieving clearance from the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Proceeds from the Questar Pipelines sale will be used to reduce parent-level debt, including retiring a 364-day term loan Dominion entered into in July, which Dominion used to repay a $1.3 billion transaction deposit made by Berkshire Hathaway Energy, according to a news release from Dominion.
Local advocates push against the possibility of Memphis's natural gas plants - Local environmental advocates want to make sure Memphis Light, Gas and Water is considering the potentially existential threat of climate change while the city-owned utility is bidding out its power supply. The Chickasaw branch of the Sierra Club wrote MLGW leadership and Memphis Mayor Jim Strickland a letter that raises issues with a key piece of Memphis' planned electricity strategy — natural gas. If Memphis were to leave the Tennessee Valley Authority and be on its own for its electricity supply, MLGW would rely on what could be several natural gas plants for much of the city's power and much of the reliability. MLGW is also seeking bids on renewable energy and battery storage. That planned reliance on natural gas is not what the Sierra Club would like to see. "...Beyond the existential threat posed by climate change and the moral imperative to address it, MLGW has a duty to consider the financial implications of a climate-constrained future and the potential impact of a fossil fuel-heavy portfolio on its ratepayers," the Sierra Club wrote. embedded: Sierra Club - MLGW by The Commercial Appeal on Scribd
Natural Gas Futures ‘Pressing Higher’ on Euro Gains Despite Mild Weather Domestically - Natural gas futures recovered most of their losses from late last week in early trading Monday, rising double digits as analysts continued to see indications of domestic prices responding to conditions in overseas markets. After settling 24.8-cents lower on Friday, the November Nymex contract was up 21.7 cents to $5.836/MMBtu at around 8:45 a.m. ET. Rallying prices in after hours trading early Monday appeared to coincide with a move higher in European prices, according to Bespoke Weather Services.“Things continue to be volatile, and if you blink, you likely miss a move,” Bespoke said. “Our stance remains ‘slightly bearish,’ but keeping in mind that there can, and likely will be, wild moves in both directions until we reach the time when the bearish weather pattern starts taking on more importance in price action, which may not occur for another week or so.”The firm lowered its projected gas-weighted degree day total for October as a whole based on weekend changes in the weather data, a result of new days rolling into the back end of the projection period that “remain very warm/low demand.”The forecast showed nearer term demand gains, but only as a result of higher expected cooling demand, “something which will become meaningless in another week to 10 days at most,” Bespoke said. “Putting it all together, it remains a very bearish weather pattern.” EBW Analytics Group analysts similarly observed warming trends in the weekend weather data, with “enough rare mid-October cooling demand” in the forecast to “fully offset” losses in heating demand nationally. However, despite an “extreme pattern” the overall net increase demand remained “relatively modest.Elsewhere, in the domestic market, the EBW analysts noted continued weakness in liquefied natural gas feed gas demand. “Still, European gas markets are a key barometer for Nymex gas: this morning’s” Dutch Title Transfer Facility (aka TTF) “front-month’s gain of 7.2% contributed to the Nymex November contract’s increase,” the analysts said. “The November contract is pressing higher this morning, but very weak short-term fundamentals remain a key source of downward pressure that could help lead a highly volatile market lower.”
U.S. natgas rises on higher demand, soaring global prices (Reuters) - U.S. natural gas futures gained over 2% on Monday on forecasts power generators will burn more of the fuel this week than previously expected and as record global gas prices keep demand for more U.S. liquefied natural gas (LNG) exports strong. Even though the weather is expected to remain milder than normal on average across the United States through mid October, lingering pockets of heat were still expected to keep air conditioners humming in some parts of the country this week. Front-month gas futures rose 14.7 cents, or 2.6%, to settle at $5.766 per million British thermal units (mmBtu). Earlier in the day the contract was up about 7%, putting it on track for its highest close since February 2014. Global demand for coal and gas has exceeded pre-COVID-19 highs with oil not far behind, dealing a setback to hopes the pandemic would spur a faster transition to clean energy from fossil fuels. Gas prices around the world have soared to all-time highs for several days in a row as low stockpiles in Europe and insatiable demand in Asia cause the two regions to compete for spare LNG cargoes. Prices in Europe jumped over 80% in September, rising for a seventh month in a row, as the amount of gas in storage in some European countries fell to dangerously low levels ahead of the winter heating season. The world's top commodity trading houses, meanwhile, are being told by brokers and exchanges to deposit hundreds of millions of dollars in extra funds to cover their exposure to soaring gas prices. Analysts have said that stockpiles in some European countries were over 20% below normal for this time of year. In the United States, meanwhile, inventories were expected to reach about 3.5 trillion cubic feet (tcf) by the end of October. Analysts said that should be enough for the U.S. winter heating season even though that amount would fall short of the 3.7 tcf five-year (2016-2020) average for that time of year. Belief that the United States will have enough gas in storage for this winter and a lack of capacity to export more LNG has kept U.S. prices from rocketing along with Europe and Asia, but pipeline constraints and competition for expensive LNG exports will boost prices to multi-year highs this winter in California and New England. Data provider Refinitiv projected that U.S. gas demand, including exports, would slide from an average of 85.0 billion cubic feet per day (bcfd) this week to 83.6 bcfd next week as the weather turns milder. Those forecasts were higher than Refinitiv expected on Friday.
NatGas Price Explodes Higher Closing at $6.31, Highest in 12 Yrs -- Natural gas futures jumped to the highest settlement price in 12 years–$6.31/MMBtu–as global gas supply shortages stoke concerns about U.S. shortages coming this winter. Spot prices for physically traded gas also jumped yesterday. The NGI Spot Gas National Avg. was up another 32.0 cents to $5.970. Overall production dipped a bit yesterday helping to feed the fears. From NGI’s Daily Gas Price Index: Natural gas futures broke through $6.000/MMBtu for the second time this week as U.S. production took a notable step down on Tuesday at the same time global supply concerns roiled the domestic market. The November Nymex gas futures contract surged 54.6 cents to settle at $6.312. December gas finished at $6.432, up 52.6 cents on the day. Spot gas prices also continued to mount hefty increases despite a generally mild weather pattern in place across the country. Stubbornly strong power burns lifted NGI’s Spot Gas National Avg. up another 32.0 cents Tuesday to $5.970. Though the domestic supply picture has vastly improved over the past month, several maintenance events — common during the shoulder season — resulted in a steep decline in output across the country. Wood Mackenzie said top day production data showed production falling around 1.7 Bcf/d day/day to 91.2 Bcf/d early Tuesday. North Louisiana led the declines as production slid about 335 MMcf/d along the Tennessee Gas and Gulf South pipelines. Wood Mackenzie analyst Laura Munder said Gulf South began maintenance Tuesday at Carthage Junction, which is expected to impact upstream expansion receipts, and at the Magasco Compressor Stations, which would impact West 30 from Magasco to South TX (Delivery). Both maintenance events are expected to continue until Friday. Tennessee does not have planned maintenance underway, “but the drop is localized at one gathering system interconnect, so it is likely unreported field work,” according to Munder. In the New Mexico portion of the Permian Basin, Transwestern Pipeline began annual testing at the WT-1 Compressor Station in Carlsbad, reducing capacity from around 630 MMcf/d to about 280 MMcf/d until Friday. Overall Rockies production was down about 300 MMcf/d, with the largest drop in the Denver-Julesburg Basin along Colorado Interstate Gas. Munder said there is no associated maintenance with the production cut. From Bloomberg: Natural gas futures jumped to the highest settlement price in 12 years in New York as global gas supply shortages stoke concerns for U.S. shortages. As the northern hemisphere heads into winter-heating season, low U.S. auxiliary supplies have sparked concerns about potential shortages as demand for the furnace fuel ramps up. Gas futures rose 9.5% to close settle at $6.312 per million British thermal units on the New York Mercantile Exchange, the highest close since December 2008. Traders and brokers are “definitely considering that there’s a high potential for the market to have to move into what we would call gas-rationing pricing which simply is that you basically have to preserve gas in your inventories to meet deliverability needs,” said Nina Fahy, head of North American natural gas analysis at research firm Energy Aspects Ltd. Many are bracing for a brutally cold winter to deplete U.S. supply, despite mild weather forecasts for the winter season.
U.S. worries about winter prices as global natural gas shortage nears borders - Regional natural gas markets in the United States are seeing prices for this winter surge along with global record highs — suggesting that the energy bills causing headaches in Europe and Asia will hit the world’s top gas producer before long. Gas prices in Europe and Asia have more than tripled this year, causing manufacturers to curtail activity from Spain to Britain and sparking power crises in China.The United States has been shielded from that global crunch because it has plenty of gas supply, most of which stays in the country since U.S. export capacity is still relatively small. The benchmark U.S. natural gas contract has been rallying, lately hitting seven-year highs, but its $5.62 per million British thermal units (mmBtu) price is a far cry from the $30-plus being paid in Europe and Asia.
U.S. natgas volatility jumps to a record as prices soar worldwide -- Volatility in U.S. natural gas futures hit a record Tuesday as an energy crunch in major world markets pushed up prices globally. - Natural gas prices in Europe and Asia are at record highs as major markets such as China struggle to find enough fuel to meet demand, which has bounced back from the coronavirus-induced slowdown faster than anticipated. In Europe, prices have risen more than 500% this year on concerns that current low levels of storage will be insufficient for the winter. That has fed through US natural gas futures, which recently closed at a 12-year high of $6.31 per million British thermal units (mmBtu). While this is still a far cry from prices in Europe and Asia where natural gas is five times more expensive, the market has become increasingly volatile as competition increases for limited US liquefied natural gas (LNG) exports. In the United States, implied volatility – a measure of expected volatility in the market – hit an all-time high of 122.5% on Tuesday, topping the prior record of 117.5% in November 2018. Wild moves are caused by merchant commodity firms, hedge funds and other major investors in the market who find themselves exposed to unexpected price rallies. Companies that place misdirected bets on the markets are sometimes forced to move positions quickly to cover their losses, further exacerbating volatility. There have been no recent reports of the hedge fund failing, but Stater, which invested in gas, has reportedly lost about $130 million. In contrast, commodity giant Endurand has posted bigger returns due to rising prices. The natural gas market is experiencing a series of wild swings as power shortages in Asia and Europe have triggered panic to secure supplies. Competition between Europe and Asia for limited LNG cargo and other energy supplies has led manufacturers to reduce activities in Europe and lead to a power crisis in China. Global gas prices have hit a record high of around $40 per mmBtu in Europe and $35 in Asia. The last time volatility soared so aggressively was in November 2018, the volume of gas traded on the New York Mercantile Exchange (NYMEX) reached a record 1.6 million contracts.
U.S. natgas drops near 10% as output rises, extreme volatility continues (Reuters) - U.S. natural gas futures dropped over 10% on Wednesday after soaring to a 12-year high in the prior session as extreme volatility for energy prices around the world continues. Analysts said U.S. futures rose on Tuesday as soaring global gas prices kept demand for U.S. liquefied natural gas (LNG) exports high. They said it dropped on Wednesday as the market shifted focus back to the situation in the United States where output is growing and utilities likely added more gas than usual to stockpiles for a fourth week in a row last week. Since the middle of August, global gas prices have repeatedly hit fresh record highs as Europe worries it may not have enough gas in storage for the winter and insatiable demand for the fuel in Asia caused utilities around the world to compete for available LNG cargoes. Front-month gas futures on the New York Mercantile Exchange fell 63.7 cents, or 10.1%, to settle at $5.675 per million British thermal units (mmBtu). That was the biggest daily percentage drop since September 2020. Weeks of rapid changes in U.S. gas futures boosted implied volatility, used as a determinant of an option's premium, to an all-time high on Tuesday. Analysts have said gas stockpiles in some European countries were more than 20% below normal for this time of year. In the United States, meanwhile, inventories were expected to reach about 3.5 trillion cubic feet (tcf) by the end of October. Analysts said that should be enough for the U.S. winter heating season even though that amount would fall short of the 3.7 tcf five-year (2016-2020) average for that time of year. Belief that the United States will have enough gas in storage for this winter and a lack of capacity to produce more LNG for export has kept U.S. prices from rocketing to the record levels seen in Europe and Asia. However, pipeline constraints and competition for expensive LNG were expected to boost prices to multi-year highs in California and New England this winter. Data provider Refinitiv said gas output in the U.S. Lower 48 states rose to an average of 91.8 billion cubic feet per day (bcfd) so far in October from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. With gas prices at or near record highs of $46 per mmBtu in Europe and $35 in Asia, versus just over $6 in the United States, traders said buyers around the world would keep purchasing all the LNG the United States could produce. Data provider Refinitiv said the amount of gas flowing to U.S. LNG export plants slipped from an average of 10.4 bcfd in September to 10.0 bcfd so far in October with short-term upsets at a few Gulf Coast plants and Berkshire Hathaway Energy's Cove Point LNG export plant in Maryland expected to remain shut for another week of planned maintenance. But no matter how high global prices rise, the United States only has the capacity to turn about 10.5 bcfd of gas into LNG. Global markets will have to wait until later this year to get more from the United States when the sixth liquefaction train at Cheniere Energy Inc's Sabine Pass and Venture Global LNG's Calcasieu Pass in Louisiana are expected to start producing LNG in test mode.
US gas storage fields see largest injection of current season: EIA | S&P Global Platts --US natural gas storage volumes in the week ended Oct. 1 increased by the largest build of the current injection season, the Energy Information Administration reported Oct. 7. NoStorage fields injected 118 Bcf which proved more than the 111 Bcf build expected by a survey of analysts by S&P Global Platts. The build reported in the EIA's Weekly Storage Report was more than the five-year average of 81 Bcf and last year's 75 Bcf injection in the corresponding week. It was also the largest injection of the year so far. US storage volumes now stand at 2.811 Tcf, which is 532 Bcf, or 14%, less than the year-ago level of 3.820 Tcf and 172 Bcf, or 5%, less than the five-year average of 3.464 Tcf. The Midwest region continued to stockpile volumes, adding 37 Bcf for the week ended Oct. 1. Storage injections in the Midwest have picked up even more to begin October as the region attempts to close the deficit to last year in the final month leading up to the winter withdrawal season. Midwest inventories sit at 971 Bcf, slightly below the five-year average. Injections have climbed to an average of 4.3 Bcf/d to start the month, which is more than double the rate witnessed last October, according to S&P Global Platts Analytics. The uptick in injections appears unrelated to demand as power burns are tracking relatively in line with where they were last month. However, the region has sharply reduced outbound flows to Eastern Canada this month, with throughput averaging 1.3 Bcf/d to begin October, 500 MMcf/d lower than last month. The NYMEX Henry Hub November contract added 7 cents to $5.74/MMBtu during late afternoon trading on Oct. 7. Platts Analytics' supply and demand model currently forecasts a 67 Bcf build for the week ending Oct. 8. This would measure 12 Bcf less than the five-year average. LNG exports have decline during the week in progress. Total US feedgas deliveries have remained below 10 Bcf/d since Oct. 5 driven mainly by Freeport LNG, according to Platts Analytics. Feedgas deliveries to Freeport dropped from over 2 Bcf/d to just 1 Bcf/d on Oct. 5, rebounding above 1.5 Bcf/d on Oct. 6. The declines were likely due to operations at the export facility as both the feeder pipelines, NGPL and Gulf South, saw roughly 50% reductions each on the day. Despite global LNG prices reaching new all-time highs, US feedgas this October has averaged just 10 Bcf/d, more than 2 Bcf/d below the max capacity. The lower utilization rates of US export facilities this month has been due to fall maintenance activities on both the pipeline and export facility side. Roughly 2 Bcf/d of upside for LNG feedgas demand remains for the back half of the month as Freeport and Cove Point return to full operations, while Sabine Pass Train 6 ramps up commissioning. The strong demand globally for US LNG cargoes this winter is driving an LNG feedgas forecast of 12.3 Bcf/d from November 2021 through March 2022 as US export facilities are likely to be at or near 100% utilized. This should keep upward pressure on Henry Hub prices this winter.
Natural Gas Futures Unchanged Despite Wild Intraday Swings Following EIA Data -- With European natural gas prices continuing to sell off and U.S. fundamentals remaining firmly in bear territory following the government’s latest storage report, futures prices slid early. The November Nymex contract touched a $5.393/MMBtu intraday low but popped quite a bit given little change in the global backdrop, settling Thursday at $5.677, up two-tenths of a cent day/day. Spot gas prices took another nosedive, sending NGI’s Spot Gas National Avg. down 27 cents to $5.445. With pleasant fall weather expected to stick around for another few weeks at least — and storage inventories set to swell further because of it — there’s not a lot to get excited about in the domestic market. This was made clear on Thursday after the latest Energy Information Administration (EIA) data indicated that inventories are quickly closing the gap on the five-year average. The EIA reported a stunning 118 Bcf injection for the week ending Oct. 1, coming in about 10 Bcf higher than market consensus and above even the highest estimate ahead of the report. Projections in a Bloomberg survey ranged from builds of 101 Bcf up to 114 Bcf, with a median 105 Bcf injection. A Wall Street Journal poll included injections as low as 84 Bcf, but the average still landed at a stout 102 Bcf. Reuters’ poll was wider, with high-side estimates hitting 115 Bcf and the median injection coming in at 104 Bcf. NGI modeled a 114 Bcf injection. For comparison, the EIA recorded a 75 Bcf injection in the same week last year, while the five-year average build is 81 Bcf. The EIA’s 118 Bcf figure was the second in a row that surprised to the upside. Participants on The Desk’s online chat Enelyst attributed the hefty injection — the largest for the reference week in a decade — to strong wind generation that grabbed some market share from gas. Bespoke Weather Services chief analyst Brian Lovern called the 118 Bcf injection “a very ugly number” in terms of supply/demand balances. Using recent balances and extrapolating forward, he said the market is on pace now to reach the five-year average in terms of end-of-season storage levels, above 3.7 Tcf. Broken down by region, the South Central region posted a plump 41 Bcf increase in storage inventories, including 21 Bcf in nonsalt facilities and 20 Bcf in salts, according to EIA. The Midwest added 37 Bcf to stocks, and the East added 31 Bcf. Inventories in the Mountain and Pacific regions each climbed by 5 Bcf. Total working gas in storage as of Oct. 1 stood at 3,288 Bcf, which is still 532 Bcf below year-ago levels and 176 Bcf below the five-year average, EIA said. Despite the clearly bearish storage data, prices bounced off lows not long after the EIA report was released. This could be because a strong injection figure was expected. It also could be because tighter conditions are expected next week. However, traders also may have been hesitant to send prices much lower given the tight supply backdrop overseas and likelihood of robust export demand in the coming months.
Exxon Sees $700MM Windfall from Gas Rally | Rigzone Exxon Mobil Corp. said higher global natural gas prices will increase third-quarter profit by about $700 million, a sum that should help the oil giant reduce its debt pile. Gas, for years a laggard to more profitable crude, will probably be the biggest uplift to earnings compared with the prior quarter, the Irving, Texas-based driller said in a regulatory filing Thursday. Surging demand for the fuel has elevated prices from Britain to Beijing. Europe in particular is suffering an acute shortage and faces stiff competition from Asia for supplies as countries work to amass reserves before winter descends on the northern hemisphere in a matter of weeks. Exxon’s profit uplift from gas is likely to be a leading indicator for Big Oil earnings, with Royal Dutch Shell Plc also well-placed to gain from higher prices for the fuel. The extra cash will help Exxon whittle away its borrowings, which rose to a record high last year due to the pandemic-induced crash in oil prices. Higher oil prices will increase earnings by about $400 million, the company said. Wider refining margins and reduced downtime for maintenance work will add $600 million. Chemicals, which enjoyed record second-quarter profits, will see a $300 million decline in earnings, Exxon said.
Natural gas prices are skyrocketing around the world. Here's why the U.S. may not suffer as much - A global energy crunch is sending natural gas prices soaring in the U.K., Europe and Asia, hitting record highs. However, experts say the stratospheric prices seen in Europe are unlikely to carry over to the States.Much will ultimately depend on what the winter weather brings. But the U.S. is better positioned heading into the colder months, given that it's the world's largest natural gas producer and that inventory levels are not as depleted as they are in Europe."We're at a unique point in time now where just all energy prices are going up," Francisco Blanch, head of global commodities, equity derivatives and cross-asset quantitative investment strategies at Bank of America Merrill Lynch, said last week on CNBC's "The Exchange." "The U.S. is much more insulated from this global energy trend than the rest of the world," he added.That's not to say U.S. prices won't be volatile. Natural gas futures settled at their highest level since December 2008 on Tuesday. On Wednesday, the contract traded as high as $6.466 per million British thermal units (MMBtu). Natural gas for November delivery has since eased from that level, but it's still on track for the seventh straight week of gains. The contract currently trades around $5.63 per MMBtu, which is more than double where prices were at the beginning of the year. But the moves abroad are far more extreme. Analysts at Deutsche Bank noted that in Europe prices are up fivefold, while in the U.S. and Asia prices are about 1.5 times higher. In Europe, the price spike in natural gas is equivalent to if oil were trading around $200 per barrel."The importance of these moves on inflation, growth and external accounts are not to be underestimated," the firm wrote in a note to clients. "These price moves are a big deal."Coal and oil prices are also jumping. West Texas Intermediate crude futures, the U.S. oil benchmark, topped $80 per barrel on Friday for the first time since November 2014. International benchmark Brent crude, meanwhile, traded at its highest level since 2018. Analysts say that elevated natural gas prices could even prompt utilities to swap the fuel for oil.
US Natural Gas Drilling Activity Steady as Oil Patch Expands Further - The U.S. natural gas rig count finished flat at 99 for the week ended Friday (Oct. 8), while continued expansion in the oil patch lifted the combined domestic tally five units higher to finish at 533, according to the latest data from Baker Hughes Co. (BKR). A net gain of five oil-directed rigs in the United States for the week put the combined domestic tally at nearly double the 269 rigs active in the year-earlier period. Land drilling increased by seven week/week to offset a two-rig decline in offshore drilling. Horizontal rigs increased by nine, offsetting a four-rig decline in vertical units, according to the BKR numbers, which are based partly on data from Enverus. The Canadian rig count climbed two units week/week to end at 167, up from 80 at this time last year. Four natural gas-directed rigs were added there, partially offset by a two-rig decline in oil-directed drilling. Broken down by play, the Permian led with a three-rig increase for the week, bringing its total to 266 rigs, more than twice the 130 rigs running there a year ago. Elsewhere among plays, the Eagle Ford and Marcellus shales each added a rig to their respective totals, while one rig exited in the Utica Shale. In the state-by-state breakdown, Texas saw a net increase of four rigs, while West Virginia added two. California and Oklahoma each added a rig week/week, while Louisiana, Ohio and Pennsylvania each dropped one rig, according to BKR. The U.S. Energy Information Administration (EIA) released its updated International Energy Outlook earlier in the week, and the report predicts continued growth in world energy demand and global oil and natural gas production through 2050. The agency predicted a nearly 50% increase in global energy use from 2020 to 2050. This is primarily a result of projected economic and population growth for nations outside of the Organization for Economic Cooperation and Development (OECD), particularly in non-OECD Asia.
Electric fracturing is catching on, but environmentalists are not impressed--Low-carbon hydraulic fracturing is gaining traction across the U.S. But since it still extracts the very oil and gas that fossil-fuel critics want the world to stop consuming altogether, not everyone’s convinced.The process of fracturing shale rock formations under high pressure by blasting water, sand and chemicals deep underground is an inherently dirty business. Once a typical shale well is drilled, a frack fleet descends on the site, hooking up a series of giant diesel pumps that can run uninterrupted overnight. At any one time, there can be upwards of 220 such fleets working across the U.S.In response to the attention of environmentalists and investors scrutinizing its ESG—or environmental, social and governance—credentials, the industry is increasingly touting electric or low-diesel machines that are replacing conventional diesel fleets. The number of U.S. frack fleets running on electricity or a mixture of diesel and natural gas skyrocketed to more than 100 in September—comprising about 45% of the country’s working fleets. That’s more than three times the 30 or so in use before Covid-19, according to Joseph Triepke, partner at energy research firm Lium LLC. He estimates e-fracking or dual fracking fleets will make up about 55% of active fleets next year.The new systems, which started to gain traction in 2019, not only offer lower emissions but also potential fuel-cost savings for operators. But critics say whatever emissions are being eliminated during the fracking process itself are still dwarfed by those created when the oil and gas that’s extracted ends up being burned. Plus there’s the inconvenient truth that fracking is still fracking. The loud and messy process has been accused of contaminating water supplies and causing earth tremors, though advocates argue the fuel it extracts can help the U.S. move away from dirtier coal.Switching to electric-powered frack fleets “doesn’t really matter in the overall scheme of things, if you look at the emissions associated with the lifecycle of natural gas,” said Arvind Ravikumar, a research associate professor of the Petroleum and Geosystems Engineering department at the University of Texas at Austin. “This would be like buying a plane ticket to go from New York to Tokyo, but then wringing your hands over whether you should take the stairs at the airport or the escalators. It really doesn’t make a difference.”
The oil and gas industry is using Louisiana’s climate task force to push carbon capture -- Louisiana is facing dangerous effects of climate change more acutely than ever: Sunny-day flooding is making coastal roads impassable, stronger hurricanes are demolishing homes, and intense heat is killing vulnerable residents during prolonged power outages. A 23-member task force assembled by the Democratic governor last summer is meant to chart a path to reduce Louisiana’s contributions to climate change. But the oil, gas, and chemicals industries are using the group to push for policies to extend the state’s dependence on fossil fuels—particularly through carbon capture, use, and sequestration. The technology involves capturing carbon dioxide, or CO2, from industrial facilities before it enters the atmosphere and piping it deep underground to be stored or used to increase production of oil and gas wells. The state’s unwavering support of the oil, gas, and chemical industries has made it difficult to reduce emissions, fund coastal restoration, or address extreme weather. The energy sector has immense power in the Republican-controlled legislature, which would need to approve any plan put forth by the task force. At least four industry appointees serve on the task force, including a corporate lobbyist, two trade group representatives and a power company executive. The Speaker of the House designated the lobbyist, who works for oil and gas company BHP Group. An administrative team supporting the task force expected leaders of the House and Senate to designate other lawmakers to represent them, according to internal emails obtained by Southerly and WWNO. Gov. John Bel Edwards has said the long-term goal is to cut Louisiana’s greenhouse gas emissions to net-zero by 2050, meaning the oil and gas industry could thrive as long as it found ways to offset or capture its emissions. Many Louisiana officials insist the industry must be core to the state’s economy. But Logan Atkinson Burke, the executive director of the power consumer advocacy group, Alliance for Affordable Energy, disagrees. “For 20 years our poverty rate has remained around 20%,” Burke said. “To lift up this particular industry and say, ‘we have to protect that at all costs,’ and not ‘we have to protect Louisianans at all costs’ has felt upside down for me.”
Henry Hub physical flows hit 13-year highs amid rising LNG exports. --Henry Hub has long been the center of the universe for the Lower 48 natural gas market, but what it represents has changed dramatically since its inception, particularly over the past decade. It has gone from being a benchmark pricing location for a vibrant producing region, to being situated in the fastest-growing demand region and a key hub for wheeling feedgas supply to the proliferating LNG export facilities in Louisiana — all with little change to its infrastructure. As this occurred, the gas price at Henry has gone from being among the lowest in the country to one of the most premium. Physical volumes exchanged at the hub, which have always been dwarfed by financial trades there (and still are), have climbed in recent years and are now at the highest levels since 2008. Moreover, the inflows are concentrated on just a couple of pipelines, and those key interconnects are at risk of becoming constrained. In today’s RBN blog, we provide an update on the shifting gas flows at Henry Hub. The last time physical flows at Henry Hub were this high, in the 2008-09 time frame, Gulf of Mexico offshore natural gas production was well over 6 Bcf/d; the Haynesville Shale in western Louisiana was still in its early stages of growth and volumes had just started to take off; the Marcellus Shale in Appalachia was still in its infancy; and all the offshore and onshore supply converging on the pipeline network in Louisiana, including Henry Hub, was flowing northbound to serve the gas-thirsty Northeast markets. Now, offshore production is less than half of what it was then, but Haynesville production hit a record 13.4 Bcf/d in September, according to the Energy Information Administration’s Drilling Productivity Report (DPR). The same pipelines that used to flow north now bring 3-5 Bcf/d of Marcellus/Utica gas supply into Louisiana, mostly via Perryville Hub in northeastern Louisiana — and, yes, Henry Hub in the southeast — to meet growing demand along the Gulf Coast, primarily feedgas for LNG exports. The Henry Hub pricing location in Vermilion Parish, LA, has been used as the basis for domestic gas deals for decades and is the delivery mechanism for the third-largest commodity futures trading instrument in the world — the CME/NYMEX Henry Hub natural gas futures contract (behind only WTI and Brent crude). In recent years, it also served as the benchmark for the first wave of U.S. LNG export contracts. (We delved into the formation, evolution, and rationale for the benchmark trading location in our Henry the Hub, I Am I Am blog series, and we highly recommend you revisit those blogs to learn how the hub works.) But the physical infrastructure at the hub has changed little over the decades, and, despite its industry benchmark status and highly liquid futures contract, physical gas flows utilizing those assets were not the driving force there. In fact, physical trade volumes at Henry historically were driven less by physical flows and more by Intra-Hub Transfers (IHT), a “behind-the-scenes” accounting mechanism that gives counterparties the ability to exchange gas there through title transfers, without any physical movement of gas.
Gulf of Mexico Lease Sale Set for November | Rigzone - The Bureau of Ocean Energy Management (BOEM) has announced that it will hold an oil and gas lease sale for the Gulf of Mexico on November 17, in compliance with an order from a U.S. District Court. Lease Sale 257 will include approximately 15,135 unleased blocks located from three to 231 miles offshore in the Gulf of Mexico with water depths ranging from nine to more than 11,115 feet, BOEM highlighted. The latest lease sale, which is scheduled to be livestreamed from New Orleans, will be the eighth offshore sale under the 2017-2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program, BOEM noted. Some blocks are excluded from the sale, BOEM outlined, including those subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006, blocks adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap and whole blocks and partial blocks within the boundaries of the Flower Garden Banks National Marine Sanctuary. BOEM noted that it will include lease stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential conflicts between oil and gas development and other activities and users in the Gulf of Mexico. Fiscal terms include a 12.5 percent royalty rate for leases in less than 656 feet of water depth and a royalty rate of 18.75 percent for all other leases issued pursuant to the sale, BOEM revealed. The organization said it will be accepting bids by mail only for the lease sale and highlighted that it reserves the right to reject bids received.
With Biden administration, Everglades oil drilling plan may face challenge --A Texas company’s plans to drill for oil in the Everglades may have a tougher time winning approval, now that an administration that’s skeptical of fossil fuels has taken over in Washington.Burnett Oil Co. has proposed drilling at two sites in Big Cypress National Preserve, important Florida panther habitat that sprawls across both sides of Alligator Alley. Although oil drilling has taken place there on a modest scale since the 1970s, the potential expansion has generated intense opposition from environmentalists.They hope to find an ally in President Joe Biden, who has taken steps toreduce the use of fossil fuels and has attempted to impose a moratorium on new oil and gas leases on federal land.“If the Biden administration permits this project to proceed, this would be the first and only new industrial oil development allowed to be built inside a national park unit anywhere in the country since he took office,” said Melissa Abdo, regional director of the National Parks Conservation Association.“It would run completely counter to the administration’s climate goals. We have every hope and expectation that Interior Secretary [Deb] Haaland will listen to the many voices, including indigenous ones, speaking up in opposition to this alarming proposal.”Drivers experience Big Cypress as a 30-mile blur of trees along both sides of Alligator Alley. But behind the fences that keep wildlife off the interstate stands important habitat for the Florida panther, red-cockaded woodpecker, black bear, alligator and many other species. The preserve is a popular destination for hunting, fishing, hiking and bird watching.Burnett Oil, which did not respond to requests for comment, did exploratory seismic work during the Trump administration, using sound waves to look for oil. The work had been approved during the Obama administration.Since these initial operations, a new administration has taken over and begun to implement policies less friendly to the oil industry. Biden announced a moratorium on new oil and gas leases on federal land and began to implement tougher policies to fight climate change, which is largely driven by fossil fuels. The lease moratorium was rescinded this summer pending a court challenge, and the oil drilling proposal for Big Cypress would not have been affected anyway, since the mineral rights are in private hands. But environmentalists say they hope an administration concerned about climate change will take a critical look at the idea of extracting more oil from the Everglades.
Risk of oil spills may rise as climate change creates more monster storms -Hurricane Ida left a trail of destruction after slamming into the Gulf Coast, but offshore the Category 4 storm left something else in its wake: oil spills. Oil spills aren’t uncommon with strong storms, but as climate change pushes up sea levels and creates stronger storms with more moisture, offshore refineries are going to need greater and greater protections. The Gulf of Mexico is “particularly vulnerable” because of the prevalence of storms, the low-lying geography, sea-level rise, receding shorelines and the presence of oil facilities, Christopher Vaccaro, a spokesman for the National Oceanic and Atmospheric Administration, told ABC News. Since offshore drilling began in the region in 1942, about 6,000 oil and gas structures have been installed in the Gulf of Mexico. On Sept. 4, the day before Ida made landfall in Louisiana, the Coast Guard announced that cleanup crews already were responding to a large oil spill at an offshore drilling about 2 miles south of Port Fourchon, Louisiana. The oil, which came from an underwater pipeline, appeared in satellite images to drift east for dozens of miles. More than 100 birds were found to be soaked in crude oil, according to the Louisiana Department of Wildlife and Fisheries, and the Coast Guard began investigating nearly 350 reports of oil spills as a result of the storm. “We’ve seen the damage that hurricanes do in regions that have offshore drilling and oil production and refining,” “And we can expect that to continue.” One of the many destructive results of Hurricane Katrina in 2005 was the 8 million gallons of oil spilled as a result of the Category 5 storm. And more similar storms are expected. Warming temperatures will increase the number of strong storms as well as the amount of moisture in them, wreaking havoc on infrastructure both onshore and offshore. Warmer sea temperatures allow the storm systems to intensify, while the increased moisture means to more rainfall and storm surge. The record-setting 2020 hurricane season already has been rivaled in 2021 — with more than two months left in the season. “It seems pretty clear now that we can expect an increase in the frequency and intensity of storms,” Savitz said. “We’re seeing that happening … and it’s only going to continue to get worse.”
General Honore: Oil companies with abandoned wells should pay cost of clean up -A respected voice in Washington DC held a press conference Tuesday outside the Petroleum Club in Lafayette. Retired Lt. General Russell Honore wants oil and gas corporations to pay for oil wells left abandoned. The general says the impact is a concern not just for Louisiana but the entire world; a natural resource that runs the engines of the world has now become one of our greatest burdens. He says in Louisiana there are over 4000 abandoned oil wells and the cost to plug these orphan wells will cost over $500M. That’s money tax payers should not have to pay. He says let the oil and gas companies pay. “Delusion is not a solution to pollution. You can’t just dump oil in the ocean and think it’s going to go away. If you think I’m lying, these fishermen will show you dead spots where oil has seeped out of pipelines and abandoned wells. The other thing we got to get straight in America. The general previously served as commander of joint task force for Hurricane Katrina, coordinating military relief efforts in the wake of the storm, and more recently, he led the task force to review U.S. Capitol Security in the wake of the January 6 insurrection. “Without the ocean we are going to have struggle and its going fast.”
Oil spill reported at Texas City Marathon Galveston Bay Refinery - - A crude oil leak at a Texas City refinery has forced the closure of at least one road in the area.It happened at the Marathon Galveston Bay Refinery Wednesday morning.The leak was isolated to the refinery complex and was blamed on the failure of a pump seal at the facility, according to Bruce Clawson, interim director of Homeland Security for Texas City. No injuries were reported.Loop 197 from 4th Avenue South to FM 519 is closed to non-essential traffic due to the response to the spill.The Marathon Galveston Bay Refinery has a refining capacity of 593,000 barrels of oil per day,according to company documents. It wasn't clear how much oil had spilled Wednesday morning, but video from SkyEye showed a large amount of fluid spewing from a large tank at the site."The refinery has deployed air monitoring in the community as a precaution, and there is no indication of risk to the community," Marathon Petroleum Corporation communications manager Jamal Kheiry said in a statement. "Cleanup is underway, and regulatory notifications have been made."Kheiry also said an investigation is planned to determine what caused the spill.
Oil spill at Texas refinery causes road closures as emergency crews work to contain spread - Emergency crews are working to contain the damage from an oil spill at a refinery in Texas, where dramatic video footage shows a deluge of crude gushing out the side of a massive storage tank.The spill on Wednesday morning led to road closures as investigators descended to the Texas City refinery of Marathon Petroleum on Wednesday morning.Aerial footage from ABC 13 shows the area around the tanker in Galveston Bay saturated in the brownish-black crude oil while witness accounts posted to Facebook said the air surrounding the site “smelled horrible”.The leak comes less than a week after a leak in an oil pipeline off the coast of California spilt up to 144,000 gallons of crude oil into the Pacific Ocean.A pump seal failure at the storage facility lead to the leak, which was isolated to the refinery complex, Bruce Clawson, interim director of Homeland Security for Texas City, told ABC 13 News. Authorities blocked non-essential traffic on the nearby Loop 197 as emergency crews worked to contain the spill, but there was no shelter in place order issued. No injuries have been reported.Marathon Petroleum spokesman Jamal T Kheiry said in a statement an investigation would begin to determine the cause of the spill.“The refinery has deployed air monitoring in the community as a precaution, and there is no indication of risk to the community," the statement said. "Cleanup is underway, and regulatory notifications have been made.”
Marathon Texas Refinery Works to Contain Day-Old Oil Leak --Marathon Petroleum Corp.’s huge oil refinery on the Texas Gulf Coast continues to try to contain a crude leak more than 24 hours after crude began gushing from a storage tank on site, a regulatory filing from the company showed.The crude release at the Galveston Bay facility in Texas City began early Wednesday after a valve flange on the tank failed and oil began pouring into the tank’s containment dike, the filing with the Texas Commission on Environmental Quality showed. Marathon is emptying the tank as quickly as possible to minimize pollution. The company said there were no injuries.Energy research and consultancy firm Wood Mackenzie estimated the crude tank’s capacity is 400,000 barrels. Marathon declined to discuss the size of the tank.The leak at the 593,000 barrel-a-day refinery is being contained within an earth dike and foam is being applied to reduce vapors. Equipment to remove the oil for processing and disposal is being deployed. Cleanup is underway and the crude spill remains on-site.Crude oil released from the storage tank remains contained on-site, and there has been “no indication of risk to the community,” spokesman Jamal T. Kheiry said in an emailed statement on Thursday. The company still doesn’t have an estimate on how much oil has been lost, he added.Shares of Marathon, the largest independent U.S. refiner, rose as much as 2.4% at 11:56 a.m. in New York. The incident started at 7:30 a.m. local time on Wednesday and is expected to be over by 7:30 p.m. Thursday, the filing showed. It estimated the leakage at 5,000 pounds of volatile organic compounds. A road running by the site was closed because of odors emanating from the spill, Bruce Clawson, emergency manager for Texas City, said Wednesday.
'Another Day, Another Catastrophic Oil Spill': Leak in Texas Fuels Calls to 'Keep It in the Ground' --A crude oil spill at a Marathon Petroleum refinery in Texas City outside of Houston on Wednesday — just the latest in a series of recent leaks — sparked fresh calls for rapidly phasing out fossil fuels and transitioning to 100% renewable energy."The crazy thing is to expect that this won't keep on happening every damn day until we just keep the oil in the ground. #KeepItInTheGround," tweeted Nathaniel Stinnett, executive director of Environmental Voter Project, with footage of the scene at the Marathon Galveston Bay Refinery.ABC 13 reports that Bruce Clawson, interim director of Homeland Security for Texas City, said the failure of a pump seal at the facility caused oil to pour out of the side of a tank. No one was injured but the incident led to road closures, according to Chron.Both Clawson and Marathon Petroleum spokesperson Jamal T. Kheiry said the spill is contained to the facility, which has a refining capacity of 593,000 barrels of oil per day."The refinery has deployed air monitoring in the community as a precaution, and there is no indication of risk to the community," Kheiry said in a statement. "Cleanup is underway, and regulatory notifications have been made." The incident in Texas City comes just days after one of the worst oil spills in Southern California's history—which also drew attention to national fossil fuel policies and practices."Fossil fuels pollute. First the California spill, now this," Northwest Progressive Institute tweeted Wednesday, linking to a report on the situation in Texas. "We must transition to a renewable energy future as fast as we can. That's why we need climate investments in the #BuildBackBetter bill."Democratic lawmakers and the White House are still negotiating the details of the Build Back Better bill. The climate and social safety net package, which is set to include several parts of President Joe Biden's agenda, has been held up by opposition from two right-wing Democrats.While welcoming the president and congressional Democrats' efforts to enact climate legislation via the budget reconciliation process, progressive campaigners have also called out the Biden administration for moving forward with fossil fuel leases for public lands and waters.Friends of the Earth Action echoed that criticism in a tweet about Texas, declaring, "Another day, another catastrophic oil spill that will massively harm local wildlife and environment."The Biden administration "claims to care about the climate crisis — yet it continues to open up public lands and waters to Big Oil," the group said. "This is why that cannot continue."
Abandoned oil well leaks throw one West Texas rancher into a battle over her land’s future - In the Permian Basin, thousands of oil and gas wells fill the landscape, and today some of that aging equipment is bursting and leading to uncontrolled leaks. Just this summer, one of these aged wells began leaking and spewing toxic water — more than 20 years after it was filled with concrete and abandoned — throwing one rancher into a bureaucratic nightmare filled with more questions than answers..“No one wants to discuss what it looks like when an oil well or an oil field dies,” Ashley Watt said, sitting in her home on her 22,000-acre ranch in Crane County.She hadn’t really thought about it before either. But over the last year, she’s come face-to-face with a long list of problems spawned from the aging oilfield dotting the horizon of her property. “Here’s some of it on the left and there’s another one over that hill,” she said.As we pushed through scrub brush, an acrid smell filled the air. Then, Watt pointed out a large black glob. “It is crude oil basically mixed with sand and just dried over time to create an oil-sandstone.”Corroding debris from companies lined her dirt roads. Pumpjacks, pipelines emerged from the ground. And dead mesquite leftover from past accidents filled the scenery where cows should be grazing.One after another, Watt pointed out scars left from the industry — sometimes pulling out a drone to get a better look at the landscape. Watt has had to pull dead wildlife out of multiples pools of crude left open at the base of pumpjacks — like this dead bird.“You want to see a gas leak before it’s treated…It’s like literally just a dead circle where everything is dead.”Walking up to an exposed pool of crude, Watt spotted something. “Oh here’s a dead bird. Look on the other side, laying right in there.”It’s a distressing sight, but Watt said it’s nothing compared to the existential threat a nearly 70-year-old oil well called “Estes #24” is causing her.The well was acquired by Chevron decades ago and by 1995 the oil company plugged and abandoned the Estes, filling it with cement to prevent it from leaking. But in early June, the well was discovered spewing toxic water believed to be from past oil production. “With the Estes #24 blowing out at the surface, that’s pretty much been my life,” Watt said.
Aerial and satellite imagery can find methane leaks. Will EPA bake the tech into new rules? - Methane emissions are a major driver of climate change, with a short-term global warming impact that’s about 80 times stronger than that of carbon dioxide. In the U.S., about a third of these methane emissions come from the oil and natural gas industries — and many of those leaks can be cost-effectively prevented, if they can be detected. New aircraft- and satellite-based technologies can dramatically expand the scope of methane-leak detection. Many oil and gas companies are already using them to reduce losses of a moneymaking resource — methane is the chief constituent ingredient of natural gas, after all. And methane is far more harmful to the climate when it’s leaked than when it’s burned to produce electricity, or even when it’s flared as a waste byproduct of oil drilling. In the next few weeks, the U.S. Environmental Protection Agency is set to release draft rules that will dramatically expand the agency’s role in regulating methane emissions across the oil and gas industry. One big question for industry insiders and climate activists is whether the EPA will build the latest leak-detection technologies into these rules. Will the agency drive the industry to embrace the technologies’ full capabilities? And if it does, how can it avoid costly or confusing requirements that could lead to legal challenges? The EPA took up these issues at a two-day virtual workshop in August, where independent researchers and oil and gas engineers agreed that a combination of ground- and air-based detection technology can dramatically improve visibility into methane leaks. In some cases, the data they provide can inform mitigation strategies that can quickly earn back their cost by preventing losses of the natural gas these companies make money by selling. Basing regulations on novel technologies poses risks, however. Regulations must undergo stringent technical vetting, and they’re vulnerable to legal challenges. But the methane-detection methods now being used fail to catch anywhere from one-third to one-half of the industry’s total methane emissions, according to the latest data. That means any rules that don’t integrate these new technologies may well miss a golden opportunity to address what scientists say is one of the most effective ways to combat climate change. “At least in the data we see, traditional technologies might not be enough” to achieve the major methane emission reductions called for by groups like the U.N. Intergovernmental Panel on Climate Change and the International Energy Agency, said Matthew Johnson, an emissions expert and professor at Carleton University in Ottawa, Canada. “We’d better be considering multiple technologies to find the one or two that work together,” he said. “That’s essential.”
United Energy to take possession of Wagoner County pipeline - Plano, Texas-based United Energy has agreed to buy a natural gas pipeline in Wagoner County, Oklahoma, formerly owned by Red Fork Energy, the company announced in a release Tuesday
California oil spill stokes concern for Great Lakes — The California oil spill that has contaminated miles of coastline is renewing concerns about the potential of an oil leak from Line 5, which runs under the Straits of Mackinac. An anchor strike is suspected to have caused the spill in California and the pipeline through the straits has dealt with an anchor strike before in 2018. Daniel Macfarlane, an associate professor at Western Michigan University’s Institute of the Environment and Sustainability, fears it could happen again. “An anchor strike is not just a risk, it’s already happened so it’s probably more a matter of time,” Macfarlane said. Enbridge, a Canadian company, also owns the pipeline that spilled oil into the Kalamazoo River in 2010. The disaster was the second biggest inland oil spill in U.S. history. “With Line 6B in the Kalamazoo River, that was over a million gallons and took Enbridge close to a day to discover it even had a spill,” Macfarlane said. Line 5 is much older than the California pipeline and Macfarlane says a major spill there would be even more catastrophic. Macfarlane, who is Canadian, says the pipeline provides very little energy to Michigan and little economic benefit. “It’s essentially just moving fossil fuels from Canada to another part of Canada with Michigan bearing the risk,” Macfarlane said. Macfarlane says the location of the pipeline would mean an oil spill would quickly flow in multiple directions. “A University of Michigan study a few years ago said up to 700 miles of coastline could be impacted by an oil spill from Line 5,” Macfarlane said. The company wants to build a tunnel to house the pipeline which would better protect it from anchor strikes. A lawsuit challenging a 2018 decision to create a Mackinac Straits Corridor Authority that would enter into a tunnel agreement was upheld by the appeals court. The second lawsuit brought by Attorney General Dana Nessel is seeking to void an easement where the pipe was built and remains in litigation.
Hoping to avoid Enbridge Line 5 shutdown, Canada asks U.S. to negotiate --The Canadian government wants a federal judge to halt Michigan’s efforts to shut down the Line 5 pipeline until Canadian and U.S. diplomats can talk it out.On Monday, a lawyer for the Canadian government alerted U.S. District Court Judge Janet Neff that Canada has officially invoked a 1977 treaty, part of which says that “no public authority” in either the U.S. or Canada can impede the flow of petroleum products through international pipelines like Line 5. Canadian officials argue that the treaty leaves Michigan Gov. Gretchen Whitmer powerless to stop Canadian oil giant Enbridge Energy from operating Line 5, despite Whitmer’s order last winter for Enbridge to stop transporting petroleum products through the Straits of Mackinac by this past May (an order Enbridge has defied).Gov. Gretchen Whitmer said in a statement she's "profoundly disappointed" in the Canadian government. She called on Canadian Prime Minister Justin Trudeau to reverse the decision to invoke the treaty and expressed confidence that Michigan will prevail in court. Michigan is, and will remain, a strong partner with Canada on a range of issues," Whitmer said. "However, I will not remain silent when the fate of the Great Lakes and Michigan hangs in the balance." Michigan and Enbridge are locked in legal battle over the shutdown order, awaiting a decision from Neff on whether the case will continue in federal or state court.Canadian officials have repeatedly argued that legal proceedings should pause until the U.S. and Canada have a chance to negotiate the pipeline’s fate — an argument opposed by attorneys for the state who noted that Canada had yet to launch a formal negotiation process.That changed Monday. In a letter to the judge, Canadian counsel Gordon D. Giffin said the country’s officials had used “diplomatic channels” to present U.S. officials an official request for negotiations.“Canada respectfully submits that with the triggering of the Treaty’s dispute settlement process, the Court should hold proceedings relating to Michigan’s Line 5 shutdown order in abeyance while the Article IX process is ongoing,” Giffin wrote.In a statement Monday, Michigan Attorney General Dana Nessel said she is “disappointed” by Canada’s letter, saying it provides “no legal basis for delaying consideration of our case.”“Neither the Treaty nor the dispute resolution process are relevant to the question now pending before the Court: whether the federal court has jurisdiction over the State’s suit against Enbridge,” Nessel said. “It is our position that the court can and should promptly rule on our motion to remand the case to state court.”
Editorial: Clock keeps ticking on Line 5 pipeline - Oil spills, in and of themselves, are bad news. They’re bad for the environment, as the petrochemicals foul waters, wildlife and human habitat. They’re bad for business, especially ones relying on a clean natural resources. But bad spills can still prompt good responses. Swift action. Effective clean-ups. Transparency on behalf of the responsible party. Unfortunately, this last pipeline rupture in California was not that. The 140,000 gallon spill came from a 17-mile long, 40-year-old pipeline owned by Amplify Energy Corp. An anchor strike from the influx in COVID-19-related cargo shipping traffic in Huntington Beach likely caused the 13-inch long gash in the pipe, according to preliminary reports. Divers Tuesday found a piece of the pipe bent and dragged 105 feet, according to USA Today. But beyond the strike itself, news now tells us what we’ve come to expect — revelations of botched responses. Yes, the company had an automated leak detection system and a 24/7-staffed control room. Yes, an alarm should have been triggered and people notified. Yes, the first report came by way of a bystanding ship that noticed the sheen. Yes, Amplify did get a low-pressure, “possible failure” alarm on the pipe. No, they did not shut it down until three hours later. No they did not inform the National Response Center for more than six hours. Yes, the Coast Guard was told about the spill from bystanding ships reporting the sheen, but no it did not investigate until nearly 12 hours later. In Michigan, we have our own stories, including the 840,000 gallon spill (nearly seven times the amount spilled in California) into the Kalamazoo River system via Enbridge’s 6B pipeline. Crude pumped for 17 hours before the response. Afterward, federal reports rapped Enbridge for knowing its 41-year old pipeline was in bad shape, and its own Pipeline and Hazardous Materials Safety Administration for not doing its job. Enbridge’s Line 5 in Michigan was built in 1953. It too has seen anchor strikes and gaps in its required protective coating. What to do with it — whether to shut it down outright or run it through a utility tunnel under the lakebed — has effectively left it in stasis, operating and aging. No pipeline can operate indefinitely, no matter what some may posit about 68-year-old pipelines “built to last.” Even with supposed fail-safes, errors happen. But it’s the responses to these errors that eat away confidence in the ability to make good on a bad spill. Parties, now federal, state and private and nonprofit, need to quit stalling and resolve what to do with this aging infrastructure that puts 20 percent of the world’s fresh water supply at risk — before the spill.
Oil flows through Line 3, but cleanup work remains at site of ruptured aquifer – Forced by state regulators, Enbridge has launched a major cleanup effort in Clearwater County to repair the aquifer crews punctured during construction in January. Artesian groundwater has been welling up for more than eight months near this rural community, wasting at least 24 million gallons and threatening to dry out two rare and protected wetland areas nearby called fens. The breach is a significant blunder on one of the largest construction projects in the state's recent history, but it's been largely out of public view given the location and the fact the company failed to tell regulators about it for several months. The state Department of Natural Resources (DNR) revealed the problem only last month when it ordered Enbridge to pay $3.3 million for the damage and gave it 30 days to stop the uncontrolled flow of water. Enbridge now faces an Oct. 15 deadline to essentially cork the artesian well it created. Its plan is to drill a new well to pump out some of the water and then inject tons of grout into the ground to try to seal it. Outraged environmental groups, scientists and Ojibwe bands who opposed the pipeline dismissed the state's enforcement action as too little, too late. They say the rupture is exactly the sort of problem they warned would happen in Minnesota's watery landscape. White Earth tribal lawyer Frank Bibeau argued in court documents that the DNR would have learned about the rupture much earlier if it had held the requested public hearing before expanding Enbridge's water appropriation permit by nearly 10 times. "DNR is either unwilling or incapable of stopping Enbridge environmental destruction … at any price," Bibeau wrote in the motion seeking an injunction to stop the DNR from allowing Enbridge to appropriate water. Others say state regulators should have stopped Line 3 work when Enbridge was found to be out of compliance, and they don't understand how Enbridge was allowed to start the oil flowing. At a news conference Wednesday, White Earth Nation Chairman Michael Fairbanks decried Line 3's overall impacts, including the aquifer breach, and said he feels like pleas to lawmakers and regulators have fallen on deaf ears. "Please come up and see this and come look at this devastation to nimaamaa-aki, Mother Earth," Fairbanks said. "The damage has been done now." The ruptured aquifer is about a mile from the fens on Deep and Steenerson lakes. Unlike bogs fed by rain water, the calcareous fens — high in calcium — are fed by groundwater and the aquifer's loss of pressure could destroy them. They're home to threatened plants such as the hairy fimbry and the small white lady's slipper. "They are among the rarest freshwater ecosystems, and we are only just beginning to learn all the secrets that these beautiful little places hold," said Laura Triplett, chair of the geology department at Gustavus Adolphus College. The pierced aquifer is not the only accident along the Line 3 construction route. In August, the Minnesota Pollution Control Agency disclosed at least 28 documented spills creating at least 10,000 gallons of muck. Aerial footage of the area around the rupture site shows a large area with pooled water and mud, and a road and staging area built of wood planks for equipment. Jeff Broberg, a professional geologist who directs the Minnesota Well Owners Organization, said the aquifer each day is losing enough water to fill 4 acres one foot deep, based on state estimates. "It's a lot of water," he said.
Revealed: pipeline company paid Minnesota police for arresting and surveilling protesters - The Canadian company Enbridge has reimbursed US police $2.4m for arresting and surveilling hundreds of demonstrators who oppose construction of its Line 3 pipeline, according to documents the Guardian obtained through a public records request.Enbridge has paid for officer training, police surveillance of demonstrators, officer wages, overtime, benefits, meals, hotels and equipment. Enbridge is replacing the Line 3 pipeline through Minnesota to carry oil from Alberta to the tip of Lake Superior in Wisconsin. The new pipeline carries a heavy oil called bitumen, doubles the capacity of the original to 760,000 barrels a day and carves a new route through pristine wetlands. A report by the climate action group MN350 says the expanded pipeline will emit the equivalent greenhouse gases of 50 coal power plants. The project was meant to be completed and start functioning on Friday.Police have arrested more than 900 demonstrators opposing Line 3 and its impact on climate and Indigenous rights, according to the Pipeline Legal Action Network. It’s common for protesters opposing pipeline construction to face private security hired by companies, as they did during demonstrations against the Dakota Access pipeline. But in Minnesota, a financial agreement with a foreign company has given public police forces an incentive to arrest demonstrators.The Minnesota Public Utilities Commission, which regulates pipelines, decided rural police should not have to pay for increased strain from Line 3 protests. As a condition of granting Line 3 permits, the commission required Enbridge to set up an escrow account to reimburse police for responding to demonstrations.Enbridge told the Guardian an independent account manager allocates the funds, and police decide when protesters are breaking the law. But records obtained by the Guardian show the company meets daily with police to discuss intelligence gathering and patrols. And when Enbridge wants protesters removed, it calls police or sends letters. “Our police are beholden to a foreign company,” Tara Houska, founder of the Indigenous frontline group Giniw Collective, told the Guardian. “They are working hand in hand with big oil. They are actively working for a company. Their duty is owed to the state of Minnesota and to the tribal citizens of Minnesota.” “It’s a very clear violation of the public’s trust,” she added.
Oil Pipeline Protesters Are Building Trauma Support Centers --After the media spotlight faded and police forced oil pipeline protesters to pack up and leave in 2016, the struggle that began at the Standing Rock encampment in Sioux County, North Dakota was far from over. More than 800 Water Protectors had been arrested at the Oceti Sakowin resistance camp, where indigenous people and their supporters gathered to oppose the construction of the Dakota Access Pipeline. While the resistance has led to a temporary shutdown of the pipeline and triggered an environmental review, many of those who came to Standing Rock left traumatized, facing large medical bills and lengthy court battles. Timothy Cominghay, an indigenous volunteer who provided legal support for Standing Rock defendants, said he witnessed the effects of the trauma they had endured. “I've seen the end of these campaigns. People go home and die. People drink themselves to death. People go home and kill themselves,” he told Motherboard. “And, you know, on the other side, instead of going home and dying, they go to the next campaign. They carry all this pain and fear and trauma that they experienced with them and that just poisons that campaign before it even begins.” The next campaign has already begun. In Minnesota, more than 800 people have been arrested while resisting the Line 3 pipeline, an expansion to a 1960s-era oil line that crosses through Native treaty lands to bring roughly 760,000 gallons of tar sands oil per day from Edmonton in Alberta, Canada, to Superior, Wisconsin. Despite ongoing frontline resistance, the new pipeline became fully operational on October 1. The fight isn’t over, however, and supporters like Cominghay and are now building long-term support for pipeline resistors experiencing trauma at the Welcome Water Protectors Center, a Anishinaabe Akiing space resting on 1855 treaty territory on the Mississippi River that is run by Winona Laduke and other Water Protectors along with Honor the Earth. Over the past year or so, it has served as a publicly-facing Anishinaabe Akiing cultural and community center that helps guide new pipeline resistors in the struggle against Line 3. Now, the Center is reorganizing to provide the Water Protectors with peer-to-peer counseling, community, and a space for healing, said Cominghay.
Northern Oil inks $154M deal for North Dakota oil properties - Northern Oil and Gas on Thursday announced it will buy further interests in a fleet of oil wells in North Dakota for $154 million, its third significant acquisition in the past eight months. The seller in the latest deal is Texas-based Comstock Resources, which is controlled by the owner of the Dallas Cowboys football team, Jerry Jones. With the three acquisitions, Northern Oil is spending $382.2 million on new properties. The Minnetonka-based company also said Thursday it plans to increase its dividend — which was initiated in May — by 33% during the third quarter to 6 cents a common share. Northern is acquiring further interests in about 400 oil wells, which are operated by multiple companies. Northern holds existing ownership positions in 84% of those. Production from the new North Dakota properties is 4,500 barrels of oil equivalent per day. Northern Oil, which invests in leases and drilling projects, has branched out beyond its traditional turf of North Dakota this year. "This is our third major transaction this year in as many basins," Adam Dirlam, Northern's chief operating officer, said in a statement. In June, it announced deals totaling $102.2 million in the Permian basin, the nation's largest producer of shale oil. Those deals, which involved multiple sellers, cover 2,900 acres in New Mexico and Texas with expected production of 3,700 barrels of oil equivalent per day during 2021's second half.
Proposed Williams County pipeline to connect to Dakota Access - Kinder Morgan is planning a short pipeline in Williams County to connect to the Dakota Access Pipeline.A subsidiary of the company, Hiland Crude, is proposing a 2.9-mile pipeline beginning at its Epping Station to transport oil "to existing pipeline infrastructure where the product can be delivered to various mid-continent markets," according to an application the company filed with the North Dakota Public Service Commission.Kinder Morgan told the Tribune the pipeline will connect to Dakota Access, which runs from the Bakken oil fields of western North Dakota to Illinois. Dakota Access ends at an oil hub, and from there oil can be transported via other pipelines to places such as the Gulf Coast.The proposed Williams County pipeline would be 8 inches in diameter and made of steel. It's expected to transport 30,000 barrels of oil per day, though it would have the capacity to carry as much as 63,000 barrels per day, according to the application.The project is estimated to cost $5.4 million.
More than 9,000 gallons of brine spill near Williston - An estimated 9,240 gallons of produced water spilled Sunday, Oct. 3, at a saltwater disposal facility in Williams County, North Dakota, according to a news release from the state Department of Environmental Quality. Produced water, or brine, is a mixture of saltwater, oil and sometimes drilling fluids that is created during oil and gas production. Texas-based Oasis Petroleum reported the spill about five miles southeast of Williston occurred due to an equipment failure, though the cause of the spill is still under investigation. About 85 gallons of brine is estimated to have run off into a nearby agricultural field. Department officials will continue inspecting the site and monitoring remediation efforts, according to the release.
Oil washes ashore in Southern California as 126,000 gallons from spill threaten wildlife - Officials warned of an “environmental catastrophe” on Sunday after more than 120,000 gallons of oil leaked from a rig and washed up on beaches south of Los Angeles, threatening wildlife and closing popular shores.Authorities said Sunday afternoon that the heavy crude oil did not appear to be leaking anymore, but that the cause and timeline remained under investigation. The oil spill, a few miles offshore from Newport Beach and Huntington Beach, was first reported Saturday and leaked about 126,000 gallons spanning 13 square miles, officials said. The emergency sent people scrambling to contain the fallout and protect sensitive habitats.“This oil spill constitutes one of the most devastating situations that our community has dealt with in decades,” Huntington Beach Mayor Pro Tem Kim Carr said during a news conference on Sunday. She said authorities are looking at how to hold accountable the responsible parties and warned there will be “a lot more hitting our shores over the next few days.” Huntington Beach said it has deployed more than 2,000 feet of floating barriers called “booms” at seven wetland spots in an effort to contain the spill. But oil still “infiltrated” and caused damage in a wetlands area called Talbert Marsh, which is home to many bird species, according to Orange County Supervisor Katrina Foley. The county is building a sand berm to keep the oil from intruding further, Foley said on Sunday.The damage to wildlife is still emerging. While Foley said dead birds and fish started to wash ashore, other officials said they could only confirm that one duck was “oiled” and is getting veterinary care. “We’re hoping we have minimal impact, but we’re preparing for the worst,” said Christian Corbo, a lieutenant at the California Department of Fish and Wildlife.Authorities said the oil came from Platform Elly, a pipeline operated by Beta Offshore, a Long Beach unit of Houston’s Amplify Energy. Speaking Sunday alongside officials from the responding agencies, Amplify Energy chief executive Martyn Willsher said that the company is investigating the spill and that divers are at a potential source site of the leak.He said the pipeline has been “meticulously maintained” throughout the ownership by Amplify and was “suctioned at both ends” to prevent more leaking. “Everything is shut down,” Willsher said. “Our employees live and work in these communities, and we’re all deeply impacted and concerned about the impact,” the executive said, adding, “We will do everything in our power to ensure that this is recovered as quickly as possible.”Huntington State Beach was closed, while the final day of a popular air show that drew 1.5 million visitors to area shores Saturday was canceled. Meanwhile, the city of Huntington Beach also closed much of its ocean and shoreline, officials said. Orange County Health Officer Clayton Chau urged people against swimming or even gathering on the affected beaches and warned that vapors from the oil spill could spread on the wind. Rep. Michelle Steel (R-Calif.) sent a letter to President Biden seeking major disaster declaration for Orange County, while local leaders said the booms aimed at containment could stay in place for weeks or months.
Massive oil spill hits Orange County beaches, killing birds, marine life, California - (videos) A massive oil slick originating from a pipeline leak hit the beaches of Orange County, California over the weekend, raising grave wildlife and environmental concerns.Residents of Newport Beach started reporting the smell of gas Friday afternoon (LT), October 1, 2021, prompting the city's police department to issue a community advisory about 19:45 LT, saying they are checking it out.1The alarm was raised 24 hours later, when Orange County officials said they are dealing with a massive oil spill, with potentially catastrophic consequences.The leak is reportedly linked to a pipeline connected to a 41-year-old platform named Elly, located about 13.8 km (8.6 miles) off the coast.According to the president and chief executive of Houston-based Amplify Energy Corp., parent company of the pipeline’s operator, the potential source of the oil leak is located about 7.2 km (4.5 miles) off the coast, somewhere along the 28.1 km (17.5 miles) long pipeline to shore.As of October 3, the oil slick plume was ~10.7 km (6.6 miles) long, running from the Huntington Beach Pier down into Newport Beach, the City of Huntington Beach said in a news release. "At this time, due to the toxicity created by the spill, the City is asking that all individuals remain clear of the beach and avoid coming into contact with oiled areas."2In partnership with the Orange County Health Care Agency, the City made the decision to close the ocean and shoreline in Huntington Beach between the Santa Ana River Jetty and Seapoint Street.3At this time, it is unclear as to how long the ocean and shoreline closure will be in effect, or how long the oil spill clean-up efforts will take.Orange County Supervisor Katrina Foley, whose district includes Huntington Beach, said Saturday oil has already washed up on the Huntington Beach beachfront. "We’ve started to find dead birds and fish washing up on the shore."On Monday, October 4, Folley said a wider area from the Huntington Beach Surf City all the way to Dana Point Harbor is impacted.4"Fisheries in the impacted area are now closed to give time to investigate any impacts to fish in the impacted area. Avoid fishing off piers, bridges, boats and docks, too.""While the overall clean-up efforts are being led by the Coast Guard, here in Huntington Beach, our local response efforts have been focused on two main priorities: protecting the health and safety of our residents and visitors; and preventing an ecological disaster by mitigating the oil spill impacts on our precious coastline and wetlands," city authorities said.Oil has also infiltrated Talbert Marsh, a 10 ha (25 acres) ecological reserve in Huntington Beach that is home to dozens of species of birds.5 The oil will likely continue to encroach on Orange County beaches in the next few days, officials said.
An oil spill off the California coast destroyed a wildlife habitat and caused dead birds and fish to wash up on Huntington Beach, officials say - A swath of the Southern California coast is covered with oil after 3,000 barrels' worth gushed into the Pacific Ocean -- devastating some of the local wildlife, officials said.A pipeline breach occurred about 5 miles off the coast of Huntington Beach, Orange County Supervisor Katrina Foley said Sunday."We've started to find dead birds and fish washing up on the shore," Foley said. "The oil has infiltrated the entirety of the (Talbert) Wetlands. There's significant impacts to wildlife there," she said. "These are wetlands that we've been working with the Army Corps of Engineers, with the Land Trust, with all the community wildlife partners to make sure to create this beautiful, natural habitat for decades. And now in just a day, it's completely destroyed."A total of 1,218 gallons of oily water mixture have been recovered from the spill, the United States Coast Guard said in a statement."This response is currently a 24/7 operation and response efforts are scheduled to continue until federal and state officials determine that the response to the crude oil spill is complete," the USCG statement read. It said that one oiled Ruddy duck has been collected and is receiving veterinary care and other reports of oiled wildlife are being investigated. The National Transportation Safety Board announced on Twitter that it's sending investigators to gather information and assess the source of the oil spill. The oil has spread between Huntington Beach and Newport Beach, officials said. The pipeline is owned by the Houston-based oil and gas company Amplify Energy, its president and CEO Martyn Willsher said at a news conference Sunday afternoon. "We are fully committed to being out here until this incident is fully concluded," Willsher said, adding the company is working with numerous local, state and federal agencies on recovery efforts. An oil sheen was first reported to the US Cost Guard shortly after 9 a.m. Saturday morning, the Coast Guard said in a press release. "It's probably been leaking longer than we know," Foley told CNN Sunday. Willsher said his company notified the Coast Guard Saturday morning when employees were conducting a line inspection and they noticed a sheen in the water.The spill -- equal to about 126,000 gallons of post-production crude -- is a "potential ecological disaster," Huntington Beach Mayor Kim Carr said Saturday. As of Sunday morning, "the leak has not been completely stopped," the city of Huntington Beach said in a press release. It said preliminary patching has been completed to repair the oil spill site, and additional repair efforts will be attempted. "Currently, the oil slick plume measures an estimated 5.8 nautical miles long, and runs from the Huntington Beach Pier down into Newport Beach," the press release said. "The oil has already infiltrated many of our wetlands in Huntington Beach in the Talbert area, and we want to do everything we can to prevent it from intruding into that area even further," Foley said.
Why did it take so long to identify Orange County oil spill? - Los Angeles Times - TK Brimer, who has owned the surf shop just steps from the sand on West Coast Highway for more than 40 years, is used to the unique odors that sometimes drift from the nearby coastline. But the aroma that hung outside his shop at 6:30 p.m. Friday evening was unique, he said. Around that time, the Newport Beach Police Department’s phones started ringing with residents throughout the city reporting the smell of gas. Police received enough inquiries that the department sent out a community advisory about 7:45 p.m. saying authorities were checking it out. But it was not until 24 hours later that authorities raised alarms that the Orange County coast was dealing with a massive oil spill with potentially catastrophic consequences. The time it took to determine the scope of the leak — more than 126,000 gallons of crude flowing from an oil platform off the coast — has sparked questions from residents and others about how the early hours of the crisis were handled. They also wonder why federal and local agencies were offering a much less dire assessment of the situation through Saturday evening. The oil slick is believed to have originated from a pipeline leak, pouring 126,000 gallons into the coastal waters and seeping into the Talbert Marsh At sunrise Sunday, oil was on the sand in some parts of Huntington Beach with slicks visible in the ocean as well. On Sunday evening, officials said they still didn’t know when the leak began or even whether it had been fully plugged. They said the leak is linked to a pipeline connected to Elly, a 41-year-old platform 8.6 miles offshore. The potential source of the oil leak is about 4.5 miles off the coast, somewhere along the 17.5-mile pipeline to shore, where crude is eventually delivered to a local refinery, Sometime Saturday morning, Amplify Energy notified the U.S. Coast Guard that an oil spill had occurred, after the company observed an oily sheen in the water. The Coast Guard said it received an initial report of an oil sheen at 9:10 a.m.
California Democrats blast offshore drilling in oil spill's wake --Several California Democrats are calling for limiting or halting offshore drilling in the wake of a major oil spill off the state’s coast this weekend. The 126,000 gallon spill prompted beach closures and reached coastal wetlands that are home to migratory birds. In the wake of the spill, Democrats rebuked offshore drilling and the oil industry, and House Democrats’ campaign arm used it to slam one area Republican. The new spotlight on the drilling, meanwhile, comes as Congress weighs a proposal to limit the practice as part of major infrastructure legislation. “The oil spill off the coast of Orange County reiterates the perils of offshore drilling,” Sen. Dianne Feinstein (D-Calif.) said in a statement. “This spill highlights why we must also take action to prevent future spills, including passing the West Coast Ocean Protection Act. Our bill would permanently ban oil and gas drilling in federal waters off the coast of California, Oregon and Washington,” she added. The state’s junior senator, Alex Padilla (D-Calif.), tweeted that the practice should end. “We’ve seen time and time again how damaging offshore oil spills are to our coastal ecosystems as well as to our economy. We have the power to prevent future spills—that’s why I’m committed to ending offshore oil drilling,” Padilla wrote. The spill came from a pipeline off the southern California coast and impacted areas including Huntington Beach and Newport Beach. It falls near a district represented by Republican Rep. Michelle Steel, who last year flipped a seat that was previously held by Democrat Harley Rouda. The Democratic Congressional Campaign Committee (DCCC) released a statement criticizing Steel in the wake of the spill. “Orange County voters deserve to enjoy their beaches without fear of hospitalization. Michelle Steel’s toxic relationship with the fossil fuel industry is harming tourism, killing local wildlife, and endangering OC beachgoers,” said a statement from Adrian Eng-Gastelum, a spokesperson for the group.
Officials look to ship anchor striking pipeline as possible cause of California oil spill Authorities on Monday said they are looking into the possibility that a ship's anchor damaged a pipeline and caused the massive oil spill that started over the weekend and has affected multiple Southern California beaches.The oil spill is one of the largest in recent California history, with at least 126,000 gallons of crude leaking out into the coastline. Miles of beaches in Orange County could potentially be closed down for weeks as cleanup operations continue.Martyn Willsher, CEO of Amplify Energy, which operates the affected pipeline, said an anchor striking the pipeline is “one of the distinct possibilities," according to The Associated Press.Coast Guard Lt. Cmdr. Jeannie Shaye concurred with this, saying, "We’re looking into if it could have been an anchor from a ship, but that’s in the assessment phase right now." According to Willsher, divers have examined more than 8,000 feet of the pipeline and are concentrating on “one area of significant interest.” Soon after the oil spill began, workers moved to shut off the pipeline and retrieve as much of the oil as possible. However, by Sunday morning, Orange County Supervisor Katrina Foley shared on Twitter that the spill had had "significant ecological impacts" on Huntington Beach. "We’ve started to find dead birds & fish washing up on the shore," Foley tweeted. As the AP noted, Orange County district attorney Todd Spitzer has said that he has tasked investigators with determining whether he could bring state charges for the spill. Spitzer also said Amplify divers should not be permitted to be near the pipeline without independent authority from him.
California Democrats blast offshore drilling in oil spill's wake -Several California Democrats are calling for limiting or halting offshore drilling in the wake of a major oil spill off the state’s coast this weekend. The 126,000 gallon spill prompted beach closures and reached coastal wetlands that are home to migratory birds. In the wake of the spill, Democrats rebuked offshore drilling and the oil industry, and House Democrats’ campaign arm used it to slam one area Republican. The new spotlight on the drilling, meanwhile, comes as Congress weighs a proposal to limit the practice as part of major infrastructure legislation. “The oil spill off the coast of Orange County reiterates the perils of offshore drilling,” Sen. Dianne Feinstein (D-Calif.) said in a statement. “This spill highlights why we must also take action to prevent future spills, including passing the West Coast Ocean Protection Act. Our bill would permanently ban oil and gas drilling in federal waters off the coast of California, Oregon and Washington,” she added. The state’s junior senator, Alex Padilla (D-Calif.), tweeted that the practice should end. “We’ve seen time and time again how damaging offshore oil spills are to our coastal ecosystems as well as to our economy. We have the power to prevent future spills—that’s why I’m committed to ending offshore oil drilling,” Padilla wrote. The spill came from a pipeline off the southern California coast and impacted areas including Huntington Beach and Newport Beach. It falls near a district represented by Republican Rep. Michelle Steel, who last year flipped a seat that was previously held by Democrat Harley Rouda. The Democratic Congressional Campaign Committee (DCCC) released a statement criticizing Steel in the wake of the spill. “Orange County voters deserve to enjoy their beaches without fear of hospitalization. Michelle Steel’s toxic relationship with the fossil fuel industry is harming tourism, killing local wildlife, and endangering OC beachgoers,” said a statement from Adrian Eng-Gastelum, a spokesperson for the group. Steel spokesperson Danielle Stewart pushed back on the criticism in an email to The Hill. "While Michelle has spent the weekend engaged with local leaders, keeping the public informed on this crisis, and requesting a major disaster declaration from a silent Biden Administration, DCCC staffers inside the Beltway are doing what they do best — sending political emails just to score points off of a tragedy in Orange County — pathetic," Stewart said. In the aftermath of the spill, the lawmaker called on the White House for a disaster declaration. Asked whether the Biden administration is considering an emergency declaration, press secretary Jen Psaki deferred to the Federal Emergency Management Agency (FEMA). “That would really be something typically that is requested by the governor and granted by FEMA, so I don’t have any updates on that,” she said.
Oil spill in California provides ammunition for anti-pipeline activists - The Washington Post — A large oil spill continued to spread across the coastal waters of Southern California on Monday, shutting down miles of beaches, closing the region’s busiest leisure port, threatening wetlands and wildlife, and raising fresh questions about the safety of U.S. pipelines.Federal and state officials opened a criminal investigation and said they were eyeing a ship anchor as a possible cause of the pipeline leak, which spread ribbons of sheen across some 13 square miles and was sending clumps of oil onto the shore. California Gov. Gavin Newsom (D) declared a state of emergency in Orange County to support the emergency response to the spill.Coast Guard Capt. Rebecca Ore called it “a complex, dynamic and evolving situation” as oil continues to flow south.“I know these beaches are incredibly important not just to the residents and citizens of Southern California, but to much of the country,” she said. “I know it’s a very tough situation to see the impacts.” On Monday, crews in hazmat suits raked up oil-soiled sand and dumped it into plastic bags, while others erected sand barriers to prevent petroleum from flowing into nearby marshes. Portions of the Talbert wetlands across from Huntington Beach were coated with sludge. The accident, which local officials as of Monday night estimated had poured as much as 144,000 gallons of oil into the waters and onto the shorelines of Newport Beach and Huntington Beach, also underscores the murky nature of who bears responsibility for pipeline accidents when the costs are far reaching.The issue of pipeline safety comes as climate activists are seeking to block new projects across the United States. Build Back Fossil Free, a coalition of climate and other activists, plans to protest outside the White House next week to call on President Biden to declare a climate emergency and block all new fossil fuel projects.“The oil spill demonstrates exactly why it’s so important for the Biden administration to act now on fossil fuels,” said Jamie Henn, one of the protest organizers, “rather than relying on long-term targets and a slow transition.”
Five things to know about the California oil spill - An oil spill off the coast of Southern California has sent up to 144,000 gallons from an oceanic pipeline into the sea, closing beaches and serving as a reminder of how U.S. energy sources can be calamitous to the environment. The spill isn’t as large or as devastating as others in recent history, but it’s had significant attention because of its proximity to millions of people. The spill comes from to an underwater pipeline connected to an offshore drilling platform called Elly. It’s not far from California’s Huntington Beach, though oil from the spill spread to beaches near a few cities in the region. Elly and the pipeline are operated by Beta Offshore Operating Co., which is a subsidiary of Amplify Energy. At the end of 2019, Amplify had 230 employees. A statement from the company on Monday said that Beta told the Coast Guard about the spill after noticing it on Friday. According to the Bureau of Safety and Environmental Enforcement, Beta has received 53 warnings and 72 severe citations for violations of its safety or environmental standards. It’s unclear what caused the pipeline to spew oil into the Pacific, though one possibility under investigation is whether the pipeline was struck by an anchor. “We’re looking into if it could have been an anchor from a ship, but that’s in the assessment phase right now,” Coast Guard Lt. Cmdr. Jeannie Shaye said on Monday. Amplify CEO Martyn Willsher similarly called an anchor “one of the distinct possibilities.” The spill is expected to impact wildlife and the economy. It has hit Huntington Beach’s Talbert Marsh — an area where 80 bird species have been counted. Some birds had been found covered in oil, but local news reported Monday that initial assessments showed fewer affected birds than originally expected. It’s also affecting beaches, prompting closures. “It settles into the sand, so people are stepping in it. It’s not attractive, it smells,” Steven Rosansky, president and CEO of the Newport Beach Chamber of Commerce, told The Hill in an interview on Monday. It’s also expected to hit the local economy given the importance of tourism in the region. California’s Department of Fish and Wildlife also halted fishing operations in the spill’s vicinity. Politicians and advocates who oppose offshore drilling in California and elsewhere say the spill shows why more should be done to either restrict or ban offshore drilling. The state’s two senators and several members of its congressional delegation are among the critics. “We have the power to prevent future spills—that’s why I’m committed to ending offshore oil drilling,” Sen. Alex Padilla (D-Calif.) said in a statement on Monday. Many environmental advocates say such drilling should be off limits. “Offshore drilling remains dirty and dangerous,” said Diane Hoskins, a campaign director for Oceana. “Unfortunately, this is not a surprising outcome because when they drill they spill.” It’s also happening as House Democrats are pushing to end offshore drilling in the Pacific Ocean — as well as in the Atlantic Ocean and the eastern Gulf of Mexico. A portion of the $3.5 trillion reconciliation proposal drafted by the House Natural Resources Committee seeks to do just that. While the event is considered a major spill, it’s not nearly as large as other infamous spills like the Deepwater Horizon spill in 2010 or the Exxon Valdez spill in 1989. Those spills released 134 million and 11 million gallons of oil, respectively, into the ocean. ]. It’s also not the area’s first spill. In 1990, the oil tanker American Trader spilled almost 417,000 gallons of oil near Huntington Beach, Calif. In that incident, the ship’s own anchor struck the cargo tank.
No more oil leaking, efforts continue to contain spill and find cause - Officials said no more oil is leaking into the waters off Huntington Beach, but weather and ocean flows will be key as they try to contain the spill that has already spread down as far as Dana Point.Officials with Amplify Energy, which operates the offshore oil rig believed to be the source of the leak, and with the U.S. Coast Guard said in response to a question they’re looking into a ship’s anchor striking and rupturing a pipeline as a possible cause of the spill of at least 126,000 gallons of oil.“That is one of the distinct possibilities,” Amplify CEO Martyn Willsher said Monday, Oct. 4.Willsher said the company hasn’t yet pinpointed the origin of the spill, but its divers have inspected 8,000 feet of pipeline and found an “area of interest.”Asked whether one of the many cargo ships at anchor waiting to enter the Ports of Los Angeles and Long Beach could have caused damage to the pipeline, Willsher said it’s a possibility that is part of the ongoing investigation. Port officials deferred questions to the Coast Guard.There are hundreds of ships out in the anchorage and the precise location of where those vessels were located, relative to the incident, is being assessed, U.S. Coast Guard Capt. Rebecca Ore said. Reports about a possible oil spill were left on a federal hotline Friday night, according to government records.The reports also came hours before officials warned people not to go in the ocean, as the slick grew to an estimated 126,000 gallons and threatened environmental harm to much of Orange County’s 42-mile coastline. The U.S. Coast Guard contacted county and Huntington Beach officials around 9 a.m. on Saturday, saying they had received reports about oil in the water off the Huntington Beach coast. By 12:15 p.m., the Coast Guard reported to those officials that the oil slick they were responding to was around 13 miles long.
Some oil from the California spill breaks up in ocean currents — Some of the crude oil that spilled from a pipeline into the waters off Southern California has been breaking up naturally in ocean currents, a Coast Guard official said Wednesday as authorities sought to determine the scope of the damage. Coast Guard Petty Officer Steve Strohmaier said some of the oil has been pushed to the south by currents. Storms earlier in the week may also have helped disperse the oil, which he said could make it more challenging to skim as it spreads out. "Most of this oil is separating and starting to float further south," he said while accompanying reporters aboard a boat to the scene of the spill. "The biggest problem is the uncertainty, the amount that leaked into the water. We are at this point unsure of the total amount that leaked out." The pipeline operator, Amplify Energy Corp., has publicly pegged the maximum amount of the spill at 126,000 gallons of heavy crude. But the company told federal investigators with the Pipeline and Hazardous Materials Safety Administration that initial measurements put the total only around 29,400 gallons. Federal officials also found that the pipeline owner did not quickly shut down operations after a safety system alerted to a possible spill. Questions remained about the timeline of the weekend spill, which fouled beaches and a protected marshland, potentially closing them for weeks along with commercial and recreational fishing in a major hit to the local economy. Some reports of a possible spill, a petroleum smell and an oily sheen on the waters off Huntington Beach came in Friday night but weren't corroborated and the pipeline's operator, Amplify Energy Corp., didn't report a spill until the next morning, authorities said. An alarm went off in a company control room at 2:30 a.m. Saturday that pressure had dropped in the pipeline, indicating a possible leak but Amplify waited until 6:01 a.m. to shut down the pipeline, according to preliminary findings of an investigation into the spill. The Houston-based company took another three hours to notify the U.S. Coast Guard's National Response Center for oil spills, investigators said, further slowing the response to an accident for which Amplify workers spent years preparing.
Southern California deals with fallout from massive oil spill as new details emerge - The Southern California oil spill, which has caused an environmental catastrophe on the coastline of Orange County, has made it abundantly clear that America’s infrastructure is obsolete and in urgent need of repair. The Elly oil rig, where the spill originated, and its accompanying pipes are over 40 years old, with oil production beginning as early as January 1981. Since then, the pipes have not been replaced, updated or reinforced.Amplify Energy Corp., the Houston-based energy company that owns the Elly oil rig, was in the process of upgrading some of its old, dilapidated oil pipes before the incident occurred, but there have been reports that oil leaks have occurred as far back as 1999 and again in 2014.These dangerously managed oil rigs and the crumbling infrastructure attached to them are riddled along the US coastline and have been ignored and left to deteriorate by their corporate owners. Near to the Elly rig is the Eureka oil rig which has had numerous problems in the past as well. Furthermore, the latest disaster recalls the 2010 BP oil spill in the Gulf of Mexico, which released 206 million gallons of oil and caused incalculable damage throughout the Gulf Coast region.Environmental advocates such as Miyoko Sakashita with the Center for Biological Diversity have advocated for the decommission of many of these outdated and heavily corroded oil lines as early as 2018, citing safety concerns and lack of oversight. As these warnings indicate, the volatility of the Elly oil rig is only the tip of the iceberg.Moreover, the unwillingness of oil owners to upgrade crumbling infrastructure has been aided and abetted by government regulators who, if not entirely ignoring safety regulations,issue slap-on-the-wrist fines allowing the companies to continue their hazardous operations. In fact, Beta Operating, the local company managing the Elly oil rig where the leak originated, has had a long history of violating federal safety regulations and compliance warnings. According to data released by the Bureau of Safety and Environmental Enforcement (BSEE), Beta Operating has been issued 125 noncompliance violations in total. The fact that this company can continue to operate despite the number of violations it has been issued has shown that the BSEE is not a serious institution that will prevent oil spills or enforce the safety and wellbeing of the population and natural habitats.
Surfers sidelined as California races to clean up oil spill - The Jakarta Post - Beaches normally thronged with the bronzed torsos of surfers are deserted as California races to clean up a huge oil spill. Up to 131,000 gallons of crude could have leaked into the Pacific Ocean on the west coast of the United States when a pipeline ruptured at the weekend. Authorities are investigating whether a ship's anchor could have ripped open the pipe, dragging it more than 100 feet (30 meters) along the seafloor. A 15-mile (24-kilometer) stretch of coast has been closed to the public -- including some prime surfing spots that are usually packed with boarders. "It's weird to see no surfing out there for miles. It's very strange," said Shawna Sakal, manager of a surf store just yards from Huntington Beach pier. "There's always people surfing, they're doing it year-round. The ocean is full of surfers, especially on the north and south side of the pier." Huntington Beach revolves around surfing. Equipment rental and sales stores jostle for space with surf schools. But almost all of them are now shuttered. For the tight-knit community of surfers, that's tough. "We have a bunch of friends that just surf, so sometimes we don't even text each other," said 18-year-old Jake McNerney. "We'll just see each other out there." More than 300 personnel are involved in the emergency response to the spill, which has been traced to a pipeline near Long Beach. Dozens of container ships are anchored off the harbor there -- one of the world's busiest container ports -- waiting for a berth in a pandemic-sparked shipping logjam. The Los Angeles Times cited a federal investigator as saying a misplaced anchor from one of these ships was the most likely cause of the pipeline's rupture. Officials said almost 5,000 gallons of crude have been recovered so far, and more than a dozen birds covered in oil have been rescued.
Oil tarballs wash up on San Diego beaches — Oceanside Lifeguards found several tar balls on the beach Wednesday night and reported them to the US Coast Guard and CA Wildlife Agencies. According to the county, tar balls were also spotted in Carlsbad. Crews fanned out along the southern California coast Friday. The Unified Command, which is made up of several different local, state and federal agencies, said they're continuing to do everything they can to prevent the oil from Huntington Beach from becoming a big problem in San Diego. The state installed boom barriers to prevent oil from seeping into the Agua Hedionda Lagoon --which proves intake water for the Claude “Bud” Lewis Carlsbad Desalination Plant. According to officials at the plant, as of Friday afternoon, there were no signs of any oil. The following statement was released by Poseidon Water and the San Diego County Water Authority Thursday: “The Carlsbad Desalination Plant continues to operate normally with no oil detected at the site, and there are no plans to shut it down. If operational changes are required, the Water Authority could shift water deliveries to ensure continued water service to its member agencies countywide. Per State of California requirements in the facility’s drinking water permit, the desalination plant will shut down if the hydrocarbon concentration of source seawater reaches 300 parts per billion. Meanwhile, according to Oceanside officials, Shoreline Cleaning Assessment Teams (SCAT) continue to examine Oceanside beaches. An environmental cleanup team will take care of any traces of tar balls. Officials said they have preemptively deployed cabling in case they need to boom off the Oceanside Harbor inlet. At this time, the city hasn't determined if the tar balls are from the spill or from natural means, which sometimes occurs. The sheen they are observing from fly-overs is still at least five miles offshore and to the north of San Onofre.
OC oil spill: More results of tar balls found on local beaches possibly due to oil leak— San Diego County officials confirmed tar balls were found at Mission Beach Friday, possibly due to the massive oil spill in Orange County.Unified Command operations announced more than 900 people were assigned Friday to shoreline cleanup assessment teams, looking for tar balls and signs of oil from the leak. The discovery comes a day after tar balls were found Thursday at North County beaches.Crews have been collecting tar balls along the shoreline of Carlsbad while keeping a keen eye out for any possible oil sheen that might demand a more robust cleanup effort. Across the river mouth opening at the Agua Hedionda Lagoon, an oil boom skimmer has been deployed to attempt to keep surface oil from entering the delicate lagoon ecosystem. According to the South California Response Team, to date, 5,544 total gallons of crude oil and 13 barrels of tar balls were recovered.County officials say lifeguards will continue to watch out for oil deposits while teams will take water, soil and air samples for testing in the coming days. The county is also advising residents to exercise caution if encountering tar balls on the beach. “Based on increased reports of tar balls washing ashore on North County beaches, the County of San Diego Health and Human Services Agency is advising residents to exercise caution at local beaches and to avoid contact if tar balls are seen,” the county said on their website.If contact occurs, the body area should be thoroughly cleaned with soap and water or other skin-safe cleaners.“Do not use degreasers, cleaning solutions or solvents as they may damage the skin further,” the county advised. “If a significant rash or other reaction occurs, consult your primary care provider.”
Coast Guard: California oil leak likely caused by damage that happened months ago -- The underwater pipeline that caused a major oil spill off the coast of Southern California was likely damaged by a ship’s anchor months before it leaked, the Coast Guard said. Coast Guard Capt. Jason Neubauer, chief of the office of investigation and analysis, said during a news conference on Friday that his office received video evidence indicating the pipeline likely had been damaged “several months to a year ago.” “This event could be multiple incidents and strikes of the pipeline after that initial event that we’re pretty confident occurred several months to a year ago,” Neubauer said. Video released Thursday shows that the damaged portion of the pipeline has a 13-inch crack and marine growth, Neubauer said. The pipeline was intact in October 2020, Neubauer said, but has since been dragged 105 feet. The pipeline had previously been encased in concrete, which was intact a year ago. “There was probably an initiating incident of some kind of anchor drag over that section, but since that time, there’s been significant growth,” Neubauer said. “That has refocused the ... time frame of our investigation to at least several months to a year ago.” Neubauer said that an investigation is underway regarding vessel movement over the pipeline over the past year. He also said authorities are examining a “heavy weather event” that occurred Jan. 24 and Jan. 25 and could have made it harder for vessels to anchor.Beta Offshore, which operates the pipeline, said last Saturday that it first observed and notified the Coast Guard of an "oil sheen" four miles off the coast of Southern California. Officials originally estimated that the amount of oil spill could have been up to 144,000 gallons. However, authorities said Thursday that it may have been under 30,000 gallons, CBS Los Angeles reported. The Associated Press reported Thursday that authorities were looking into a massive cargo ship that was anchored near the pipeline before it ruptured.
California pipeline likely damaged up to a year before spill (AP) — An underwater oil pipeline off the Southern California coast was likely damaged by a ship’s anchor several months to a year before it ruptured and sent oil spewing into the ocean and then onto some of the area’s best-known beaches, investigators said Friday. Coast Guard Capt. Jason Neubauer, chief of the office of investigations and analysis, said after the first strike it’s possible other ships’ anchors subsequently struck the steel pipe that brings oil to shore from three platforms out at sea. Investigators previously said a large section of the pipe was bowed after being struck and dragged along the seabed. It remains unknown when the slender, 13-inch (33-centimeter) crack began leaking oil, and investigators will pour over a year of data on ship movements near the area of the break. No ships have been identified as suspects at this point. The accident scene is outside the Long Beach-Los Angeles port complex that is the largest in the country and handles some 4,000 vessels a year. Many of them are from overseas and that could complicate the process of boarding ships of interest in the investigation to get information. The disclosure that the damage to the pipe could have occurred so long ago dramatically reshaped what was known about the leak that sent tens of thousands of gallons of crude into the Pacific. A search that initially appeared to focus on the hunt for one vessel now could send investigators to ports around the country to inspect many ships. It now appears many factors played a role in the pipe’s failure – possible repeated anchor strikes, stresses from being dragged along the seafloor and the corrosive forces of seawater. Neubauer said investigators have narrowed their search to large cargo vessels that would be powerful enough to move a 4,000-foot (1,219-meter) section of pipeline 105 feet (32 meters) across the ocean floor. Investigators believe the initial anchor strike occurred sometime after a survey of the pipeline a year ago that showed the line was in its original location. The extended timeline was partly based on visible marine growth on the damaged length of the pipe that was revealed in an underwater survey. The Coast Guard previously released vide of the rupture spot and a wider view of the bowed pipe. A crack suggests the pipe, which was installed in 1980, perhaps withstood an initial impact, but had been weakened over time by corrosion and became more prone to fail, Neubauer said a debris field is visible on the seafloor near the break. Investigators will now remove that section of the pipe for lab analysis. It wasn’t clear how long the investigation would take. Anchor strikes on pipelines are relatively rare, but have caused problems in the past. An Associated Press review of more than 10,000 reports submitted to federal regulators found at least 17 accidents on pipelines carrying crude oil or other hazardous liquids have been linked to anchor strikes or suspected anchor strikes since 1986. According to federal records, in some cases an anchor strike is never conclusively proven, such as 2012 leak from an ExxonMobil pipeline in Louisiana’s shallow Barataria Bay, where a direct strike by a barge or other boat also were considered possibilities. In others the evidence of an anchor strike was obvious. During 1992’s Hurricane Andrew, a 30,000-pound (13,607-kilogram) anchor was dragged by a drifting drilling rig over a Texaco pipeline in the Gulf of Mexico, causing a dent that broke open when the line was later re-started.
The only way to eliminate the risk of catastrophic oil spills is to stop drilling - Fossil fuel companies continue to profit from pumping oil while polluting our water and air. Our coastlines take a huge hit when oil is spilled, as we’re seeing in Southern California right now. Despite the long history of oil disasters, including recent spills in Santa Barbara, San Francisco Bay, and now Huntington Beach, there is still no federal or state plan for a just transition away from an extractive fossil fuel economy. We need federal action to shut down offshore oil drilling and phase out extraction altogether. When the Trump administration threatened to open federal waters off the U.S. coastline to new oil leases, people protested in droves. We knew then and we know now: When we drill, we spill. No amount of so-called safeguards from oil companies and regulators can fix this dirty and dysfunctional industry. We successfully fended off Trump’s new offshore drilling leases, yet our government still allows new ocean drilling through existing leases. Amplify Energy — owner of the offshore oil pipeline that just leaked more than 140,000 gallons of crude oil in Southern California’s coastal waters — has plans to “initiate new drilling” in the same general areas within the next three months. Oil companies get permits to drill and transport oil while promising to operate safely and then, inevitably, they fail. There is no way to eliminate the risk of catastrophic spills. Valves will leak, pipelines will corrode or be severed, well casings will blow — the list goes on. The only way to prevent oil disasters is to stop drilling. The public has no means to challenge oil companies with a history of safety and environmental violations that directly threaten our livelihoods and quality of life. Most offshore drilling infrastructure in California is at least four decades old, and there is no transparency into how the industry plans to fix their aged pipelines. We can only sit back and wait for disaster to strike. Then we watch in anguish as our fisheries and ecosystems, and our own health and economy, pay the price. This latest spill is just the most visible environmental impact of oil drilling. It is heartbreaking to see dolphins swimming through black goop, oiled birds collapsing on the shoreline, dead fish washing up and beaches emptied of surfers, swimmers and children building sandcastles. And we can’t even see the impact on the plankton, the tiny plants and animals that float in the ocean waters and are the basis of marine food webs that sustain fish, mammals, birds, and of course people. Agencies will try to calculate the cost of the damage, but they will not be able to account for all of it, nor for how long the devastation will last. Amplify’s spilled oil has already traveled about 50 miles, making it as far south as Oceanside in San Diego County. Impacts from the worst oil spill in American history, the 2010 Deepwater Horizon spill in the Gulf of Mexico, were still being discovered 10 years after the spill. The oil spread farther, sank deeper and was lethal to more habitats than anyone expected — the same is happening with this spill, too.Why are we prioritizing the profits of one industry over the health and safety of all? Oil from California’s offshore waters makes up only one-tenth of 1 percent of all the oil pumped in the U.S. every day. Is this really worth the damage we must suffer?
Could Fossil Fuel Companies Ever Be Tried for Crimes Against Humanity? -- Someone does something wrong, and is held accountable for it. It’s a pleasant notion, one with no bearing whatsoever on the world of the super-rich, whose various plunderings, deceptions, and general anti-humanity behaviors have gone and will continue to go unpunished. But does it have to be this way? Might we one day see an oil exec slumped on the stand, eyes silently begging the jury for mercy? Might we watch that exec whimper piteously as the cuffs are secured? I’m not talking accounting fraud, I’m talking Crimes Against Humanity. Could the fossil fuel companies be tried for them? For at least a decade now, advocates within the international law community have been talking about ecocide as a crime against humanity. Groups like the Center for International Environmental Law and the Stop Ecocide Foundation have been working on the legal strategy and building up the factual basis: e.g., what Exxon knew and when they knew it. These kinds of things are necessary for bringing a case.Recently, the Stop Ecocide Foundation empaneled a number of leading international law experts, who provided a technically credible and well-thought-out definition of ecocide that would include deliberate, reckless acts committed knowing that the acts are substantially likely to cause severe and widespread or long-term damage. The definition is part of a proposal to amend the Rome Statute, which is the treaty that sets out the crimes that can be prosecuted by the International Criminal Court. Two-thirds of the member countries will have to vote in favor of the amendment, although any one country can recommend it. Vanuatu has publicly supported adding ecocide as the fifth international crime as has France, so it’s very possible a country will formally recommend it, and the members will have a debate about it. (That said, it’s important to note that the US is not a party to the Rome Statute.) One of the major advantages of the crimes-against-humanity framework is that it would reinforce the moral line crossed by fossil fuel companies that have promoted their products while undermining climate science. Attaching the label of ecocide can build momentum for other advocacy against the fossil fuel companies—actions in domestic courts by the victims of hurricanes, wildfires and flooding increasingly shown to be exacerbated by fossil fuel-induced climate change, or by getting contributions to some kind of international fund to support the victims of climate change, as an alternative to being prosecuted. If you build up enough credibility for a potential prosecution, the companies may look for some political way out. As ever, companies want to avoid being declared responsible.
Gas Crisis Hits Food as Giant Dutch Greenhouses Go Dark - Skyrocketing power prices are forcing the vast network of Dutch glasshouses -- the continent’s biggest -- to go dark or scale back, threatening to cut supplies at Europe’s fruit and vegetable stalls and flower shops. Although small, the Netherlands is the world’s second-largest exporter of food by value, thanks in part to its high-yielding glasshouses that span some 10,000 hectares (25,000 acres)-- about the size of Paris. They grow vegetables like tomatoes, cucumbers and bell peppers and flowers including orchids, tulips and chrysanthemums -- making the country one of Europe’s key suppliers of fresh produce and a huge hub for the floral trade. In 2020, Dutch exports of greenhouse produce amounted to 9.2 billion euros ($10.7 billion). But heating these sprawling glass structures uses up to 3 billion cubic meters of natural gas a year, or about 8.2% of the country’s overall consumption of the fuel. Europe’s soaring energy prices are having a “massive impact” on the sector, said Cindy van Rijswick, a senior analyst at Rabobank. That’s driving some producers to cut back on lighting, end the growing season early or plan to start later next spring. “These are drastic measures that reduce production and yield and have major economic consequences for the companies,” according to industry association Glastuinbouw Nederland. “We cannot rule out whether consumers will also pay more for their vegetables, flowers and plants.” Any fruit and vegetable shortages could further stoke food inflation, with a United Nations index of world prices hovering near a decade high. Grain harvests were hit by bad weather, shipping costs are soaring and worker shortages abound from farms to restaurants. The energy crunch could exacerbate those problems -- rippling through not just greenhouses, but also costs for fertilizers spread to boost crop yields.
France pushing to strengthen EU’s energy independence as gas prices soar - France is pushing the EU to reduce its energy dependency on foreign countries as gas prices soar across the continent. The EU has been grappling with higher energy costs in recent weeks, prompting governments in Spain, Italy, Greece, and France to take drastic actions to soften the impact on consumers. The front-month gas price at the Dutch TTF hub, a European benchmark, has risen almost 400% since the start of the year. Energy experts foresee further gas price spikes as the winter season approaches. Euro zone finance ministers on Monday discussed the issue together for the first time at a meeting in Luxembourg. "We don't want to be dependent on the supplies coming from foreign [countries]," French Finance Minister Bruno Le Maire told reporters on Monday. The EU receives most of its natural gas supplies from Russia. In 2020, Moscow accounted for 43.4% of the EU's natural gas stock, followed by Norway at 20%. Russia is likely to provide further natural gas to the bloc after Gazprom recently completed construction on the Nord Stream 2 pipeline, a politically charged project designed to deliver more gas to the EU via Germany. Russia's state-owned energy giant started filling the pipeline with gas for tests on Monday. Gazprom is awaiting approval from German regulators to open the taps. "It is crucial to diversify energy supply and reduce European dependency on gas-exporting countries as fast as possible," Le Maire said in a letter last week. When asked if the EU was too reliant on gas from Russia, Europe's Economy Commissioner Paolo Gentiloni said this issue would be raised in discussions "for sure." He also said the debate among euro zone finance ministers would include: "How can we address [and] strengthen our independence, address costs of procurement [and] different ways of storage." Some national EU governments, namely Spain, have asked for a European response to the spike in energy prices. The European Commission, the executive arm of the EU, was due to put forward new ideas on how the bloc could tackle the issue together this week. This announcement has been postponed, however.
Britain deploys its army to deliver fuel as panic buying and shortages continue - — British soldiers have begun delivering fuel in the U.K., as panic buying of gasoline continues in some parts of the country. Around 200 military personnel are to be deployed as part of Operation Escalin, a strategy devised by the British government to help ease fuel supply constraints caused by a major shortage of truck drivers. Photographs Monday morning showed soldiers in combat fatigues at a BP refinery in Hemel Hempstead, England. Army tanker drivers have been on standby since last week. The government's Reserve Tanker Fleet — driven by civilians — was deployed Tuesday to deliver gasoline. Panic buying of gasoline in the U.K. in recent weeks has caused long lines outside fuel stations, many of which have been left completely dry. While the situation has begun to improve in most parts of the country, shortages remain acute in London and England's southeast. The U.K. has an estimated shortage of 100,000 truck drivers, which has disrupted the delivery of fuel, food and goods around the country. Brexit, regulatory changes and the Covid-19 pandemic are among the issues contributing to the issue. As well as utilizing the army, the government has taken steps such as suspending competition laws for the fuel industry and granting thousands of temporary visas to truck drivers, to attempt to ease the sector's logistical challenges. "The whole episode begs the question of why the U.K., once again, seems to be getting hit harder than other economies," he said. "In my opinion, the panic and hysteria in the U.K. partly reflects a growing lack of confidence by the public in the government's ability to manage the economy and fix problems when they arise."
Gas price surges to a record high in Europe on supply concerns — Natural gas contracts hit new highs in Europe on Tuesday, as soaring prices continue to put pressure on the region's energy sector ahead of the winter period. November contracts at the Dutch TTF hub — a European benchmark for natural gas — were trading at around 118 euros per megawatt hour (MWH) just after midday in London. The front-month contract was up almost 19% on the day, setting a new record high, and has risen almost 400% since the start of the year. In the U.K. — which has been hit particularly hard by the surging cost of wholesale natural gas — prices for November rose 14% to £2.79 per therm on Tuesday. Meanwhile, British wholesale gas for immediate delivery rose by 23% to £2.50 per therm. Soaring wholesale prices have partially been caused by a surge in demand, particularly from Asia, as economies emerge from Covid-19 induced lockdowns. A cold European winter and spring also meant supplies had already been heavily depleted by the summer. Meanwhile, falling domestic production, adverse U.S. weather conditions and essential maintenance works have created a tight gas market and made restocking gas supplies ahead of the coming winter difficult across the region. Stress tests for the energy sector? Several British energy suppliers have collapsed amid the gas price crisis. September alone saw nine companies cease trading, according to reports. In a normal year, between five and eight companies exit the U.K. market, according to U.K. Business Minister Kwasi Kwarteng. Speaking to CNBC's "Street Signs Europe" on Tuesday, Greg Jackson, CEO of Octopus Energy — which recently absorbed more than half a million customers from collapsed competitor Avro — said many companies had failed to weather the crisis because they were "buying short and selling long." "Octopus was able to hedge its supplies," he said. "Today we've got over 3 million [customers], so you really can hedge up to scale. I think those [failed] companies were hoping that if prices fell, they could scoop up customers with a bargain, if they rose then they'd be able to batten down the hatches and see through the crisis. This crisis is so great no one could weather it if they weren't hedged."
Asian LNG Price Soars to Record High - Asian liquefied natural gas prices surged to a record high as global competition for the super-chilled fuel intensified amid low inventories and coal shortages. The Japan-Korea Marker, North Asia’s benchmark for spot LNG shipments, surged to $34.47 per million British thermal units, the highest on records going back to 2009, according to price reporting agency S&P Global Platts. European gas prices, which Asian rates have closely followed this year, also broke records on Thursday. Prices for the heating and power-generation fuel are surging around the world as utilities rush to restock lower-than-average inventories ahead of winter in the northern hemisphere, while alternatives -- like coal -- are also in short supply. Export constraints from Norway to Malaysia, coupled with robust Asian demand, have left little of the fuel available. The price rally for the super-chilled fuel brought its cost close to $190 a barrel of oil equivalent. That’s more than twice the level international benchmark Brent crude is trading on Thursday. Unlike previous record-breaking price spikes, this one is happening while temperatures are still relatively mild, illustrating the extent of the supply crunch. Frigid winter weather could send Asian LNG prices surging threefold from current levels, according to Citigroup Inc. “Lower temperature forecasts than average in China and South Korea have led to greater end-user buying interest,” Roe said. China’s state-owned importers are boosting efforts to secure LNG for the winter, putting them in direct competition with gas-starved Europe for exports. The country’s power crunch has triggered electricity curbs in at least 20 regions and could get much worse if a La Nina climate pattern brings colder-than-normal temperatures over winter. “Competition with Europe will persist,” said Robert Ryan, chief commodity and energy strategist at BCA Research. “Asia successfully pulled cargoes over last winter by hiking prices to $32 levels and may well have to do that now to attract supply. There’s also the possibility that this still isn’t enough and governments in China and elsewhere could start ordering factories to shut down to conserve power.” Traders expect China to continue spot LNG purchases over the next few weeks, which will likely push prices even higher as the market continues to tighten.
EU Politicians Panic As Natgas Prices Explode 40% Overnight --Europe's power crunch is roiling energy markets Wednesday as Dutch and U.K. natural gas futures jumped 60% in just two days, hitting record highs along with soaring power prices. Front-month Dutch natgas futures rose an astonishing 40% today to a record 162.125 euros per megawatt-hour after a 20% move higher on Tuesday. U.K. natgas futures surged 39% today, hitting 40 dollars. For context, the EU NatGas prices are equivalent to $250 oil..."This is just ridiculous," Tom Marzec-Manser, an analyst at ICIS, told Bloomberg."Almost impossible to even justify or qualify how and why it's moving so fast and so high."E.U. politicians are in panic mode to protect consumers and businesses from rising natgas and power prices. The European Union's energy chief Kadri Simson said a revision on energy regulations could happen by the end of the year to prevent soaring energy costs from derailing the economic recovery. As we've already seen, soaring natgas prices have resulted infertilizer manufacturers limiting or halt operations from the U.K. to Germany, which has disrupted food supply chains. Ahead of winter, E.U.'s natgas stockpiles are at their lowest seasonal levels in more than a decade. The continent is super reliant on Russian natgas, which flows have declined in recent months. It's also unclear when new supplies through Nord Stream 2, the new controversial pipeline from Russia, may begin - at this point, it's too late for fresh supplies as the restocking period was a month ago. There are discussions E.U. politicians may certify the Russian pipeline early next year. Again, that would be during the winter season and too late to alleviate shortages and higher prices. Europe is in for one harsh winter. But don't worry. Governments are likely to subsidize energy costs for households and even businesses to thwart a winter of discontent. After all, politicians only have one job: Get re-elected. Meanwhile, the electricity crisis continues to roil Asian markets as Chinese buyers are paying top dollar for natgas as Beijing ordered energy firms to secure supplies at all costs.
European natural gas prices soar 60% in two days as EU sounds alarm - -European gas prices surged again, bringing their gains over just two days to 60%, as the impact of soaring energy costs rippled through equity and bond markets and the European Union sounded the alarm. Dutch and UK gas futures continue to hit fresh records along with rising power prices. Rocketing energy costs are stoking inflationary pressures and fueling concern that economic growth will slow, prompting a slump in European stocks. “It looks like a classic short squeeze to me,” said Ronald Smith, a senior analyst at BCS Global Markets, who expects the latest spike to be short-lived. “I expect we’re going to see some traders going bankrupt and liquidating their positions.” Global gas and coal markets have tightened just as the heating season starts in the northern hemisphere, with limited supply failing to catch up with recovering demand. Colder weather is forecast for Europe next week, with temperatures across the mainland set to drop below normal levels. Several European countries including France and Spain have called on the EU to take urgent action to cushion the blow of sky-high gas prices. The bloc’s energy chief, Kadri Simson, has pledged a revision to market rules by the end of the year to prevent surging costs from stifling the economic recovery. “This price shock cannot be underestimated,” Simson told members of the European Parliament during a debate on the crisis. “It is hurting our citizens and in particular the most vulnerable households, weakening competitiveness and adding to inflationary pressure.” With the gas crisis worsening by the day, some energy-intensive companies have shuttered operations because they’re becoming too expensive to run. With Europe’s stockpiles at their lowest seasonal level in more than a decade, deliveries from Russia limited and global competition for liquefied natural gas intense, the squeeze will only worsen as winter approaches. Front-month Dutch gas jumped as much as 40% to a record 162.125 euros a megawatt-hour after closing up 20% the day before. It traded at 131.10 euros as of 1:01 p.m. in Amsterdam. The UK equivalent rose as much as 39%, hitting an unprecedented 407.82 pence a therm, before easing back to 335.81 pence.
Nat gas goes parabolic, again. It’s giving us the chills.- Whoosh. There’s been a further surge in UK gas prices, as this Bloomberg chart shows: No-one is expecting much relief in the short term, with the cost to suppliers of buying for delivery in three months from now spiking too. Here’s the chart showing what traders expect to happen further into the winter months:While the surge might be more dramatic in the UK, it’s not confined to it. ViaAndreas Steno Larsen:Further afield, we’ve seen power shortages in China and India reportedly has just four days’-worth coal supplies left. It looks set to be a long, cold, lonely winter. Unless you’re long smog.
With Europe In Chaos, Putin Says Russia Ready To Help Stabilize Gas Market --With European gas prices exploding overnight, and soaring as much as 40% today alone...... with day-ahead electricity prices across continental Europe hitting record highs - Germany is above €300 per MWh. In Spain, it surged to €288 per MWh, that's ~550% above the 2010-2020 price average, and so on...... prices abruptly reversed course after a glimmer of hope emerged out of the biggest European supplier, Russia, moments ago when Vladimir Putin spoke at an energy meeting in Moscow saying Russia is ready to help stabilize energy markets, adding that contrary to insinuations from Brussels, Gazprom has never refused to increase supplies to customers and Gazprom supplies to Europe may reach record highs.Putin did not miss the opportunity to mock Europe's catastrophic handling of energy needs, saying that the gas crisis shows European authorities made mistakes. Of course, what he is referring to here is the inexplicable delay in the certification of the Nord Stream 2 pipeline which is so absolutely critical for Europe's energy needs.And while Putin said that Russia has increased supplies to Europe, adding that Gazprom is increasing gas transit via Ukraine’s gas transportation system, and most likely will exceed its contract liabilities, a quick look at the actual flows of Russian gas into Germany's Mallnow via the Yamal-Europe pipeline show s that there is much to be desired.
Russia offered to pump more gas to Europe. But analysts doubt that's ever going to happen— Winter isn't even upon us yet and Europe is already experiencing a gas market crisis with bumper demand and limited supply, prompting a squeeze on prices in the region. So when Russian President Vladimir Putin stepped in on Wednesday, offering to increase Russia's gas supplies to Europe, regional gas prices (up a staggering 500% so far this year) fell and markets breathed a sigh of relief. Market analysts quickly suspected that the offer to increase supplies to Europe was likely intended to put pressure on Germany to certify the Nord Stream 2 gas pipeline (which will take Russian gas supplies to Germany via the Baltic Sea) for use, as Russia is waiting on Germany's energy regulator to authorize the $11 billion pipeline, a process that could take several months. Experts warned that Russia's offer demonstrated that Europe is increasingly vulnerable to Moscow's ability to turn on — and off, more importantly — gas supplies as and when it wants. While Russia's apparent largesse might have offered gas markets some respite, analysts have since noted that Russia might not even be able to deliver on promises to supply more. "Comments from Mr. Putin appear to have provided some comfort to the market. However, whether these additional gas supplies depend on a quick approval of Nord Stream 2 or not may not be the main issue," Adeline Van Houtte, Europe analyst at the Economist Intelligence Unit, said in a note Thursday. "Currently, the Russian domestic gas market remains tight, with its inventories running low, output already near its peak and winter looming in Russia as well, limiting gas export capacity," she said. "There is also little sign that Gazprom — the Russian gas export pipeline monopoly, which supplies 35% of European gas needs — is attempting to pump more gas to Europe's spot buyers via existing routes, and overall given its small room for manoeuver, it is unlikely that Gazprom could deliver more than around 190bcm (billion cubic meters) to Europe this year," she said, warning it meant "European prices are unlikely to cool substantially in 2021." Mike Fulwood, senior research fellow at the Oxford Institute for Energy Studies, expressed doubts that Russia is able to supply more gas to Europe too, noting that production is already at record levels. "Russia's been faced with the same demand pressures" as elsewhere, he noted. "It was [a] very cold winter in Russia last winter, and Russian production is actually at record levels," he told CNBC's "Squawk Box Europe." "It's well up on last year of course when demand was down, but it's also up on 2019 levels, and they've been having to refill their own storage as well, which was depleted badly because of the cold weather." "So it's extremely doubtful whether they could supply more gas, whatever the route," he added.
U.S. was right — Europe has become a 'hostage' to Russia over energy, analysts warn - - After Russia rode to Europe's rescue and offered to increase gas supplies to the region amid soaring prices, experts said one thing had become abundantly clear: Europe is now largely at Russia's mercy when it comes to energy, just as the U.S. had warned. Natural gas contracts hit new highs in Europe this week — and regional benchmark prices are up almost 500% so far this year — with heightened demand and a squeeze in supply putting pressure on the energy sector as the weather turns colder. Prices seesawed on Wednesday, hitting new highs before retreating after Russian President Vladimir Putin stepped in, offering an increase in Russia's gas supplies to Europe. Market analysts said the move showed that Europe was increasingly vulnerable to Russia, which is waiting for Germany to certify the controversial Nord Stream 2 gas pipeline project which will bring more Russian gas to Europe via the Baltic Sea. The $11 billion pipeline has now been completed much to the annoyance of the U.S. which has long-opposed the project, warning for years during its construction that it compromises Europe's energy security and that Russia could seek to use energy supplies as leverage over the region. The Obama and Trump administrations galvanized bipartisan opinion against the pipeline and President Joe Biden too announced sanctions against companies involved in the project, but these were waived in May in what was seen as an attempt by the U.S. to rebuild ties with Germany. 'Energy blackmail' "[It's] crystal clear that Russia has Europe (the EU and U.K.) in an energy headlock, and Europe (and the U.K.) are too weak to call it out and do anything about it," he said, calling it a form of "energy blackmail." "Europe is cowering as it fears [that] as it heads into winter Russia will further turn the screws (of energy pipelines off) and allow it to freeze until it gets its way and NS2 is certified." Putin used a televised government meeting on Wednesday to offer an increase in supplies to Europe. He also chided the region for canceling many of its long-term gas contracts in exchange for spot deals, saying the Kremlin was ready to negotiate new long-term contracts for gas sales. Many experts believe that Russia has withheld gas supplies to Europe on purpose, in a bid to speed up Germany's certification of the Nord Stream 2 pipeline. Russia has refuted this, however, with Putin's spokesman Dmitry Peskov denying on Wednesday that Russia has had any role in Europe's energy crisis. Nonetheless, Russia's Deputy Prime Minister Alexander Novak noted on Wednesday that the expected German certification of the controversial pipeline could help cool prices.
Oil Prices Jump As OPEC+ Holds Firm On 400,000 Bpd Production Hike - Oil prices jumped early on Monday after reports started to emerge that the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ alliance recommended to the ministers to stick to the current plan and ease the cuts by 400,000 barrels per day (bpd) in November. As of 9:21 a.m. EDT, just after a very short JMMC meeting ended and ahead of the full ministerial OPEC+ meeting, Brent Crude returned to $80 per barrel it had briefly hit last Tuesday. Brent was trading at $80.80, up by 1.85%. The U.S. benchmark, WTI Crude, reached its highest level since the 2014 price crashed and traded at a more-than-seven-year high of $77.05, up by 1.75%. The favored option for the OPEC+ group is to stick to the plan and increase the collective output by 400,000 bpd in November, the JMMC meeting decided, as per sources who spoke to media. That’s the basic minimum the market was expecting. OPEC+ decided in the middle of July that it would start returning 400,000 bpd to the market every month beginning in August until it unwinds all the 5.8 million bpd cuts. The group agreed to extend the existing deal from April 2020 through the end of December 2022. Recent price strength and expected higher oil demand in the winter due to gas-to-oil switching with record-high natural gas prices in Asia and Europe had some observers and oil-consuming nations, including the U.S., to call on OPEC+ for a higher increase in production. The JMMC, which recommends preferred action to the ministers, favors the plan as-is: easing the cuts by 400,000 bpd next month. Earlier reports had indicated that an 800,000-bpd supply increase in November with no increase in December was also on the table. At the end of the JMMC meeting and just ahead of the ministerial meeting, sources said, as carried by Amena Bakr, Deputy Bureau Chief and Chief Opec Correspondent at Energy Intelligence: “Look past your noses, there’s an oversupply expected in 2022. Easing by the planned 400k is the favored option so far.”
OPEC+ sticks to plan for gradual output hike, oil price roars higher - OPEC+ agreed on Monday to stick to an existing pact to hike oil output by 400,000 barrels per day (bpd) in November, despite consumer calls for more crude and surging prices that threaten an economic recovery from the pandemic. Brent crude advanced $1.98, or 2.5%, to settle at $81.26 per barrel. West Texas Intermediate crude futures gained $1.74, or 2.29%, to end the day at $77.62 per barrel. The Organization of the Petroleum Exporting Countries, Russia and allies, known as OPEC+, have been under pressure from big consumers, such as the United States and India, to add extra supplies after oil prices climbed 50% this year. OPEC+ ministers "reconfirmed the production adjustment plan" previously agreed for adding 400,000 bpd in November, the group said in a statement issued after their online ministerial talks. Brent crude roared above $81 a barrel on the news that the group would not adjust its plan, sending prices back to three-year highs and adding to inflationary pressures in the global economy. "There are calls for more of a production increase by OPEC+," an OPEC+ source had told Reuters ahead of Monday's ministerial talks. "We are scared of the fourth wave of corona, no one wants to make any big moves." The group had agreed in July to boost output by 400,000 bpd a month until at least April 2022 to phase out 5.8 million bpd of existing production cuts, already much reduced from curbs that were in place during the worst of the pandemic. A senior aide to U.S. President Joe Biden met Saudi Crown Prince Mohammed bin Salman in Saudi Arabia on a range of issues last week, saying oil was "of concern". India, another big oil consumer, has pushed for more supply.
WTI settled at its highest level since 2014 -Oil futures rallied on Monday, with WTI settling at its highest level since 2014, after OPEC and its allies maintained its current agreement to gradually raise crude oil production each month. The agreement to “gradually” raise production comes at a time when demand appears set to make a full recovery by 2022. On Monday, the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, reaffirmed its July decision and will raise overall oil production monthly by 400,000 barrels a day in November. At the July meeting, OPEC+ said it would raise its overall production by 400,000 barrels a day starting in August until it fully phased out the production cuts it put in place last year. November West Texas Intermediate crude climbed by $1.74, or 2.3%, to settle at $77.62 a barrel on the New York Mercantile Exchange, with front-month prices ending at their highest since Nov. 11, 2014, according to Dow Jones Market Data. December Brent added $1.98 or 2.5%, to settle at $81.26 a barrel – the highest finish since Oct. 16, 2018. November RBOB climbed by 2.6% to $2.309 a gallon, the highest front-month finish since Aug. 30. November heating oil tacked on 2.3% to $2.437 a gallon, marking the highest settlement since Oct. 2018. Over the past couple of weeks, demand for natural gas has shifted to demand for crude oil, as crude is relatively more competitive. This combined with a boost in demand and OPEC+’s decision to rollover the output cuts has boosted WTI to its highest level in seven years. There is concern that the decision by the cartel and its allies to “slowly” bring back production will not be enough to keep up with the increase in demand. Should this occur, there is the possibility that OPEC+ will decide to increase output to meet the global shortage, as they are set to meet once a month. OPEC+ ministers will meet again on November 4th. Vitol’s CEO Russell Hardy said the company expects the price of oil to have fallen to about $75/barrel by this time next year. He told the Energy Intelligence Forum he expects oil demand levels to return to pre-pandemic levels by the summer of 2022. He said "we are 2.5-3 million bpd behind 2019 oil demand levels, the vast bulk of that is jet fuel". According to Bloomberg, European gasoline arrivals in the U.S. increased by 42% to an eight month week high in the week ending September 30th. Total gasoline arrivals in the U.S. increased to 443,000 bpd, the highest since the week ending August 5th. It is up from 313,000 bpd in the previous week. Eleven tankers discharged a total of 2.97 million barrels on the East Coast and one arrived with 128,000 barrels on the Gulf Coast. The U.S. received 684,000 barrels of diesel from Europe during the week, up from 643,000 barrels in the previous week. The head of energy research at Goldman Sachs Group, Damien Courvalin, said he sees an extra 650,000 bpd of crude demand later this year as utilities dealing with high natural gas prices switch to oil.
Oil analysts predict a prolonged rally as OPEC resists calls to ramp up supply — Oil prices climbed to multi-year highs shortly after a group of some of the world's most powerful oil producers opted against a big supply boost. Now energy analysts believe crude prices could be poised to rally toward $100 a barrel. OPEC and non-OPEC partners, a group collectively referred to as OPEC+, said Monday that it would stick to its existing pact for a gradual increase in oil supply. OPEC+ said it had "reconfirmed the production adjustment plan" in a statement published online shortly after relatively swift ministerial talks. This referred to its previously agreed decision to add 400,000 barrels per day to the market for the month of November. The group's decision on production policy had been widely expected, although some had hoped pressure from the U.S. and India to tame soaring oil prices might have been enough to persuade the group to offer more supply. International benchmark Brent crude futures traded at $81.74 a barrel on Tuesday morning, up more than 0.5% for the session, while U.S. West Texas Intermediate futures stood at $77.92, roughly 0.4% higher. Brent futures gained 2.5% to close at $81.26 on Monday, notching its highest settle for three years. WTI rose 2.3% to end the previous session at $77.62, reaching its highest settle in almost seven years. Both oil contracts are up around 60% since the start of the year. "The market is full of confidence," Tamas Varga, senior analyst at PVM Oil Associates, said in a research note on Tuesday. "The question is whether this optimism is justified or not." Oil rigs work on platforms in Gaoyu Lake in Gaoyou in east China's Jiangsu province Friday, Sept. 17, 2021. Barcroft Media | Getty Images OPEC+ agreed in July to raise output by 400,000 barrels a month until at least April 2022 in order to phase out 5.8 million barrels per day of existing output cuts. The recovery in global oil demand from the coronavirus pandemic has been quicker than many expected, while global supply has been disrupted by hurricane outages and low investment. While Brent trading above $80 "might feel toppy," Varga said prices are "only seen uncomfortably high until the first cold spell arrives in the Northern Hemisphere, creating additional demand and triggering a fresh bout of buying." In the short term, Varga said the current backdrop suggests "there is still room on the upside."
OPEC+ Raises November Oil Production Quota To 39.7 Million Bpd -- The required crude oil production from OPEC and its non-OPEC allies led by Russia is39.694 million barrels per day (bpd) in November, OPEC said after the OPEC+ group decided to stick to the plan to ease the collective cuts by 400,000 bpd next month.During a short and uneventful meeting on Monday, the ministers of the OPEC+ coalition decided to proceed with increasing the group’s overall production by 400,000 bpd—the minimum the market was expecting.As per the decision, the ten OPEC members bound by the pact should produce no more than 24.047 million bpd in November, while the non-OPEC producers will see their collective quota at 15.647 million bpd.The two leaders of the OPEC+ group, Saudi Arabia and Russia, will each have a ceiling of production of 9.913 million bpd. Saudi Arabia is sticking to the deal, while Russia’s case is more curious.Official Russian data doesn’t discriminate between crude oil and condensate production, but condensates are excluded from Russia’s OPEC+ quota.Bloomberg estimates put Russian crude and condensate production in September at 10.7 million bpd. If condensate production was around 880,000 bpd, this would put Russian crude oil output at 9.83 million bpd, which would be 130,000 bpd above quota, as per Bloomberg calculations.Analysts say that Russia may have reached its capacity to produce oil, while several OPEC members of the pact such as Angola, and at times, Nigeria, have struggled to pump to quotas over the past few months. This is one of the key reasons for the over-100-percent compliance with the total cuts.The OPEC+ group of producers raised their compliance with the production cuts to 116 percent in August, up from 109 percent compliance in July, sources from the alliance told Reuters in September. Despite the higher production, OPEC was actually pumping at some 10 percent below its overall quota for the 10 members bound by the OPEC+ pact in August, due to outages and technical difficulties in countries such as Nigeria and Angola, Bloomberg noted last month.
Oil prices could hit an 'off the charts spike,' says strategist -Oil prices could experience an "off the charts spike" as winter approaches and OPEC and its allies stick to their earlier pact on oil output, a strategist told CNBC.OPEC+ — the Organization of the Petroleum Exporting Countries, with their allies including Russia — have been under pressure from top consumers, such as the United States and India, to add extra supplies after oil prices surged 50% this year.However, the oil cartel agreed on Monday to stick to an existing pact to hike oil output by 400,000 barrels per day (bpd) in November, shrugging off calls to pump more oil. John Driscoll, chief strategist at JTD Energy Services, said the decision by OPEC+ was a "very prudent course of action" until one considers the ongoing energy crises and possible supply disruptions."What I think [is] more concerning to everyone out there … what happens during the winter? Are we going to have another Arctic freeze?" Driscoll told CNBC's "Squawk Box Asia" on Tuesday. He pointed to the shortage of fuel in the U.K. — with long queues of cars waiting to buy gas, as well as "fist fights." In the U.K., people have been panic buying fuel, causing shortages, as well as straining the fuel supply chains. "When you get into winter, what you really have to worry about is this non-discretionary demand," Driscoll said. Non-discretionary demand refers to essential spending for daily goods and services.Driscoll said what's especially worrying is a thin inventory, or if there's "any kind of supply chain glitch."
Oil Continues Rise With Energy Switching Expectations - Oil extended its rally from a seven-year high a day after OPEC+’s decision to keep its supply agreement in place as energy prices spike stoking concerns that more petroleum products will be used in power generation. U.S. crude futures advanced 1.7% Tuesday, heading closer to the key, psychological $80-a-barrel level. At an OPEC+ meeting on Monday, Saudi Arabia and its partners opted for only a modest output increase of 400,000 barrels a day for November. U.S natural gas futures jumped to a 12-year high as global as global shortages of that fuel fanned fears of a shortage in the U.S ahead of winter in the northern hemisphere. “There is no room for error in the system,” “If we get a cold winter these prices could go up dramatically.” Both the U.S. and global crude benchmarks have surged this month with rising energy prices stoking fear of inflation forcing consumers to pay more for everything from gasoline to heating, food and plastics. Goldman Sachs Group Inc. forecast that power generation could add an extra 650,000 barrels a day to oil demand this winter due to high gas prices. Underlying oil market gauges are also showing signs of strength. West Texas Intermediate crude’s so-called Dec.-Red-Dec. spread, a favored trade of the world’s hedge funds, topped $7.50 a barrel this week, the strongest on a rolling basis since 2019. West Texas Intermediate advanced $1.31 to settle at $78.93 a barrel in New York. Brent climbed $1.30 to settle at $82.56 a barrel on the ICE Futures Europe exchange. Meanwhile, in the U.S., analysts surveyed by Bloomberg estimate a crude stockpile rise of 700,000 barrels last week. The industry-funded American Petroleum Institute will release inventory data later Tuesday, while the U.S. government will release its weekly tally on Wednesday.
Oil Futures Again Rally on OPEC+ Resolve; WTI at 7-Year High -- Oil futures traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange rallied for the second consecutive session Tuesday following Monday's decision by the Organization of the Petroleum Exporting Countries and Russia-led partners to maintain a policy of measured monthly production increases, lifting the U.S. crude benchmark to a seven-year high and the international crude benchmark to a three-year high settlement amid signs of accelerated demand growth this winter from gas-to-oil power generation in the European Union and China. Oil futures were also given a boost from a stronger-than-expected reading on U.S. service activity in September -- the biggest component of the country's economic growth -- which rose by 1.2% from the previous month to 61.9, according to the data released Tuesday morning by the Institute of Supply Management. The reading came firmly above the 50-point mark that separates growth from contraction. The better-than-expected performance in services also follows a solid reading for domestic manufacturing industries, with goods-producing industries recording a 1.2% advance last month to 61.1%. Demand appears to far outweigh supply for goods and services in an economy that is overwise slowing. The Federal Reserve of Atlanta GDPNow model estimates economic growth in the third quarter slowed to 1.3% from a 6.5% growth rate for the June-September period. Tuesday afternoon, oil traders also positioned ahead of the weekly release of inventory data from the American Petroleum Institute followed by the official report from the U.S. Energy Information Administration on Wednesday. Analysts estimate U.S. commercial crude oil inventories remained unchanged from the previous week, although estimates ranged from a decrease of 3.1 million barrels (bbl) to an increase of 2.5 million bbl. On the session, NYMEX November West Texas Intermediate futures jumped $1.31 bbl to settle a tad below $79 bbl at $78.93, and ICE December Brent contract rallied to $82.56 bbl, adding $1.30 bbl in afternoon trade. NYMEX November ULSD futures advanced 5.70 cents or 2.7% to $2.4936 gallon and front-month RBOB futures surged 4.94 cents to $2.3579 gallon. Tuesday's higher settlements were once again underpinned by the decision from OPEC+ coalition not to raise production above 400,000 barrels per day (bpd) in November despite a deepening energy crisis in Europe and Asia that could dent growth rates in those regions. Faced with record-high gas prices and fuel shortages, Eurozone industrial growth slowed sharply in September to the lowest reading since the lifting of COVID-19 restrictions. In China, widespread power outages have already prompted government officials to roll out various electricity rationing measures to conserve fuel ahead of the peak winter demand season. Saudi Arabia's national oil company Aramco estimates that gas-to-oil switching in global power generation this winter will lead to 500,000 bpd in access demand for petroleum products this winter. Economists at Goldman Sachs see excess demand this winter for gas-to-oil switching at 645,000 bpd.
WTI Dips After API Reports 2nd Straight Week Of (Unexpected) Crude Inventory Builds - Oil prices extended their gains today (WTI at hits highest since 2014 and Brent at three year highs), after the OPEC+ group of producers agreed yesterday to stick to its planned output increase rather than raising it further."The market is realizing we are going to be undersupplied for the next couple of months and OPEC seems to be happy with that situation," said Phil Flynn, an analyst at Price Futures Group in Chicago.Additionally, rocketing global natural gas prices, which may incentivize some power generators to switch from gas to oil, mean crude prices are likely to remain supported even though there could be a short-term pullback, said Gary Cunningham, director of market research at Tradition Energy."I think there will be some profit-taking ... but we are going into winter with very high natural gas prices," Cunningham said, adding that he expects Brent will find support around $80 and WTI in the mid-$70s.Saudi Aramco said on Monday that they see switching from Natural Gas to Crude Oil of 500,000 bpd. Who can blame them...All eyes on tonight's API data (and tomorrow's DOE data) to reassure traders that demand continues to outstrip supply... API
- Crude +951k (-300k exp)
- Cushing +1.999mm
- Gasoline +3.682mm
- Distillates +345k
After last week's surprise inventory builds across the crude complex, analysts expected a modest 300k barrel draw this week but again they were wrong as API reported a small crude build (and builds for Gasoline and Distillates)
WTI Holds Losses After Surprise Crude, Gasoline Inventory Builds Oil prices are tumbling this morning, pressured by the broad weakness in stocks, a surprise build in crude stocks reported by API, and some positive headlines from Putin over the EU gas situation which may remove some upward pressure on oil prices from rotation.Some downward pressure came from the API's figures showing signs of slowing fuel demand and all eyes are on the official data to see if that is confirmed. DOE
- Crude +2.345mm (-300k exp)
- Cushing +1.548mm
- Gasoline +3.256mm
- Distillates -396k
Official DOE data showed a big crude build last week, confirming API's data, for the second straight week of rising inventories - not what the market expected from 'recovery'. Gasoline stocks also jumped higher...Crude production is rebounding finally from Hurricane Ida's impact, though remains below pre-Ida levels...
WTI Slides From 7-year High on Bearish APIs, Saudi OSP Cut -- With the U.S. dollar rapidly strengthening and equity futures in retreat, crude and refined products futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange fell in early trade Wednesday after preliminary data from the American Petroleum Institute showed across-the-board builds occurred in U.S. crude and petroleum inventories last week, while Saudi Arabia's decision to cut nearly all of its November crude prices for Asia, European and U.S.-bound cargoes have further weighed on the market. Saudi national oil company, Aramco, trimmed its official selling price for the flagship Arab Light crude bound for Asia to $1.30 per barrel (bbl), down 0.40 cents from October. Aramco also cut prices for crude bound to Northwest Europe and the United States after keeping them unchanged in October. Extra light to North West Europe was down $1 bbl to a negative $1.80 bbl against Oman/Dubai average. U.S. buyers received a modest discount of 0.10 cents per bbl from October's $2.40 bbl. The price moves might give global refiners an incentive to increase crude liftings in November as OPEC+ gradually raises its production targets, which might suggest the physical oil market is not as tight as some analysts have thought. On Monday, OPEC and Russia-led partners agreed to increase crude production by 400,000 barrels per day (bpd) in November, sticking to their plans to keep easing their cuts in measured steps. Separately, API data released Tuesday afternoon show U.S. commercial crude oil supplies rose 951,000 bbl in the week-ended Oct. 1, missing calls for stocks to remain unchanged. Data show stocks at the Cushing, Oklahoma, hub increased 1.999 million bbl. Gasoline stockpiles posted a build of 3.682 million bbl in the week ended Oct. 1, missing estimates for a 200,000 bbl decrease. API data show distillate inventories added 345,000 bbl compared with an expected 1.1 million bbl draw. U.S. diesel demand, often seen as a proxy for economic activity, increased 2% in the week ended Oct. 1, according to DTN's Refined Fuels Demand data, while gaining 5.9% relative to the same week in 2019. On a seven-day moving average basis, U.S. diesel demand is now 6.3% higher than the same seasonal period in 2019. In early trading, NYMEX November West Texas Intermediate futures slid from a $78.53 bbl seven-year high settlement to trade near $77.80 bbl, and ICE December Brent contract declined more than $1 to $81.50 bbl. NYMEX November ULSD futures fell more than 2 cents to $2.4710 gallon, and front-month RBOB futures declined about 2.5 cents to $2.3336 gallon.
Oil prices dive on increasing U.S. crude inventories- Oil declined by the most in two weeks in the wake of growing U.S. inventories and after Russia signaled it is ready to help ease a global energy crisis.Futures in New York slid 1.9% on Wednesday and extended declines late in the session after the Financial Times reported that the U.S. is raising the prospect of releasing emergency oil reserves. Prices were weaker with U.S. government data showing growing crude stockpiles and amid Russian President Vladimir Putin’s indications that the country will ramp up gas exports to stabilize energy markets.Oil closed at the highest since 2014 on Tuesday as surging natural gas prices spur greater demand for crude and oil products ahead of winter, while OPEC+ continues to only drip-feed additional supply into the market. In the days leading up to the group’s Monday meeting, the Biden administration had made a push for producers to boost crude output amid intensifying fears about tightening global energy supplies.U.S. energy secretary Jennifer Granholm raised the prospect of releasing crude oil from the strategic petroleum reserve and said that “all tools are on the table,” the Financial Times reported, citing comments made at an energy summit on Wednesday. Granholm did not rule out a crude oil export ban, the FT said.West Texas Intermediate for November delivery fell $1.50 to settle at $77.43 a barrel in New York.Brent for December settlement dropped $1.48 to end the session at $81.08 a barrel on the ICE Futures Europe exchange.Exports from Russia’s Gazprom PJSC to Europe in the first nine months of the year were close to all-time highs, according to the company. If that pace is sustained for the rest of 2021, it would be a record year, Putin said at an energy meeting on Wednesday. Lower-than-anticipated supplies from Russia, the region’s largest supplier, have been a major cause of the crisis, according to some European officials.
Oil Extends Losses As White House Considers Releasing Emergency Reserves, Ban Exports --WTI Crude prices have tumbled from almost $79.50 overnight to barely above $77 as inventories were seen rising for the second week, Russian President Vladimir Puttin offered to placate Europe's natural gas pain (removing a pillar of support for oil from gas-to-crude rotation), and now The FT reports that US energy secretary Jennifer Granholm has raised the prospect of releasing crude oil from the government’s strategic petroleum reserve, declaring that “all tools are on the table” as the Biden administration confronts a politically perilous surge in the price of gasoline.“It’s a tool that’s under consideration,” Granholm said of a release of crude supplies from the national strategic petroleum reserve, which analysts say could calm oil markets and bring prices down.“SPR [releases] came on the table a nanosecond after Jake Sullivan was rebuffed in Riyadh and the administration realised shale producers wouldn’t be able to increase production quickly enough,” said Bob McNally, head of Rapidan Energy Group and a former adviser to the George W Bush White House.Granholm also did not rule out a ban on crude oil exports.“That’s a tool that we have not used, but it is a tool as well,” she told the FT Energy Transition Strategies Summit on Wednesday.WTI extended its losses on this latest news...
Oil Throttles Back As Supply Concerns Ease | Rigzone - Oil declined by the most in two weeks in the wake of growing U.S. inventories and after Russia signaled it is ready to help ease a global energy crisis. Futures in New York slid 1.9% on Wednesday and extended declines late in the session after the Financial Times reported that the U.S. is raising the prospect of releasing emergency oil reserves. Prices were weaker with U.S. government data showing growing crude stockpiles and amid Russian President Vladimir Putin’s indications that the country will ramp up gas exports to stabilize energy markets. “The consideration of tapping reserves in the U.S. is likely to signal that we are not going to see oil prices get out of hand,” said Ed Moya, senior market analyst at Oanda Corp. Oil closed at the highest since 2014 on Tuesday as surging natural gas prices spur greater demand for crude and oil products ahead of winter, while OPEC+ continues to only drip-feed additional supply into the market. In the days leading up to the group’s Monday meeting, the Biden administration had made a push for producers to boost crude output amid intensifying fears about tightening global energy supplies. U.S. energy secretary Jennifer Granholm raised the prospect of releasing crude oil from the strategic petroleum reserve and said that “all tools are on the table,” the Financial Times reported, citing comments made at an energy summit on Wednesday. Granholm did not rule out a crude oil export ban, the FT said. Prices: West Texas Intermediate for November delivery fell $1.50 to settle at $77.43 a barrel in New York. Brent for December settlement dropped $1.48 to end the session at $81.08 a barrel on the ICE Futures Europe exchange. Exports from Russia’s Gazprom PJSC to Europe in the first nine months of the year were close to all-time highs, according to the company. If that pace is sustained for the rest of 2021, it would be a record year, Putin said at an energy meeting on Wednesday. Lower-than-anticipated supplies from Russia, the region’s largest supplier, have been a major cause of the crisis, according to some European officials.
Oil Drops The Most In Two Weeks As Concerns Over Energy Crunch Ease - Worry over the impending global energy crunch, which had replaced the long-standing worry over Covid as the primary influence of crude trading of late, seemed to ease somewhat on Wednesday and to the detriment of oil prices, which declined by the most in two weeks. West Texas Intermediate fell $1.50 to settle at $77.43 per barrel, while Brent dropped $1.48 to end the session at $81.08 per barrel. The declines occurred after media reported that the U.S. was raising the prospect of releasing emergency oil reserves as a signal that country will not let prices get out of hand, and also after The American Petroleum Institute reported that U.S. oil inventories actually rose by 951,000 barrels in the week to October 1. According to the API, gasoline inventories also rose by 3.682 million barrels in the week while stockpiles of distillate fuel, including diesel fuel and heating oil, climbed 345,000 barrels. Additionally, Russian President Vladimir Putin indicated on Wednesday that his country will ramp up gas exports to stabilize energy markets (some European officials cite lower output from the former Soviet Union as a major cause of the energy crunch in that part of the world). But concern over the crunch is hardly over, and as in the previous session many analysts were still mulling over the Organization of the Petroleum Exporting Countries' (OPEC) decision on Monday to maintain its planned output increase rather than boosting it. ANZ said in a note, “The [OPEC+] increase was well below what the market was expecting, considering the energy crunch across the globe; not surprisingly, there is speculation that OPEC will be forced to move before the next scheduled meeting if demand continues to surge.” For the record, OPEC staying on course rather than turning on the taps was said to be the result of the cartel's fear that the fourth wave of Covid could impact demand recovery (even though global numbers show the virus to be in retreat). Meanwhile, John Driscoll, chief strategist at JTD Energy Services, became the latest analyst to predict that oil could soon reach $100 per barrel: on Wednesday he told media that OPEC's move was "a very prudent course of action" but then added, “What I think [is] more concerning to everyone out there … what happens during the winter? Are we going to have another Arctic freeze? "I think, given all the uncertainty over weather and climate change, we could be in for a wild ride here.
Crude Oil Eases As US Mulls Strategic Reserve Sales - Oil prices extended losses from the previous session on Thursday, as the United States said it was considering selling oil from its strategic reserves and as Russia said it was ready to stabilise the natural gas market. Brent crude prices were down 16 cents, or 0.2%, at $80.92 a barrel by 1306 GMT, after touching a session low of $79.08. WTI crude futures fell 30 cents, or 0.4%, to $77.13 a barrel, having hit a session low of $74.96. Both contracts fell about 2% on Wednesday. "The crude market might be less tight should the United States tap the strategic crude reserves and if Russia manages to send more natural gas to Europe, this might result in less substitution from natural gas to crude," said UBS analyst Giovanni Staunovo. US Energy Secretary Jennifer Granholm said on Wednesday that the administration is considering tapping the country's Strategic Petroleum Reserve (SPR) to cool a surge in gasoline prices, the Financial Times reported. Goldman Sachs said a likely SPR release, which could be up to 60 million barrels, only posed a $3 downside risk to its $90/bbl year-end Brent price forecast. A larger-than-expected fall in US crude inventories last week also weighed on prices. Stocks rose by 2.3 million barrels, the US Energy Information Administration said, against expectations for a modest dip of 418,000 barrels. Russian President Vladimir Putin said on Wednesday that Russia was boosting gas supplies to Europe, including via Ukraine, in response to the energy crunch and stands ready to stabilise the market amid surging prices. Such a move could help cool off record high gas prices. Analysts say as winter approaches those gas prices could have an impact on the already tight crude market as some users switch to oil. Earlier this week, the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to stick to its plan to raise output by 400,000 bpd in November, sending crude prices to multi-year highs. OPEC+'s decision was partly driven by concern that demand and prices could weaken, sources close to the group told Reuters.
Oil Gains After US DOE Walks Back Plans for SPR Release -- Reversing earlier losses, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Thursday's session higher, lifting the U.S. crude benchmark above $78 barrel (bbl) after the U.S. Department of Energy said it was not planning to release crude from its emergency reserves or ban exports of crude oil to rein in surging fuel prices. Thursday's statement contradicted comments made by U.S. Secretary Jennifer Granholm on Wednesday who said the federal government has several tools to cool off rallying energy prices, including a potential release of oil from strategic petroleum reserves and an export ban. Market observers were quick to point out that a ban on U.S. crude exports would only stymie production growth, further exacerbating concerns over supply shortages. Meanwhile, plans to release emergency supplies from SPR -- the world's largest emergency stockpiles of crude -- is simply not considered "at his time," according to reports. The news came shortly after Goldman Sachs estimated that if the DOE released oil from the SPR in response to higher prices, it would likely be limited to just 60 million bbl -- posing a $3 downside risk to its $90 bbl Brent forecast. The SPR contained 617.8 million bbl of oil last week -- roughly equal to about a month of U.S. petroleum products demand. Immediately following the news, oil prices moved on the offensive, lifting both benchmark crudes towards the multiyear highs reached earlier this week. At settlement, NYMEX November West Texas Intermediate futures advanced $0.87 to $78.30 bbl after trading as much as 2% lower earlier during the session, and ICE December Brent contract added $0.87 to finish a tad below $82 bbl. NYMEX November ULSD futures gained 1.76 cents to $2.4596 gallon, and front-month RBOB futures moved up 2.62 cents for a $2.3344 gallon settlement. The oil complex came under pressure after Russia's President Vladimir Putin on Wednesday suggested Moscow would increase gas flow into the European Union to mitigate the energy crisis there. European gas prices hit new record highs this week amid depleted inventories and lower-than-expected output from renewable energy. In Europe, natural gas prices are now trading at the equivalent of $230 bbl in oil terms -- up more than 130% since the beginning of September and more than eight times higher than the same time last year, according to data from Independent Commodity Intelligence Service. In broader markets, stocks on Wall Street rallied and the dollar index softened against a basket of foreign currencies after U.S. unemployment claims fell for the first time in over a month last week, easing some concerns over slowing improvement in the labor market. Department of Labor reported 326,000 Americans applied for first-time unemployment benefits last week, down 38,000 from the previous week's revised levels, while the number of Americans receiving unemployment benefits for consecutive weeks fell by 97,000 to 2.714 million. The data came at a time when most pandemic-related programs that extended unemployment benefits have ended, and amid hopes that declining COVID cases would spark a round of aggressive hiring during the fall.
WTI Cracks Above $80 as Markets Assess Supply Shortfall - Bolstered by a retreat in the U.S. dollar index triggered by a weaker-than-expected September employment report, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange accelerated gains in afternoon trade Friday, lifting the U.S. crude benchmark above $80 per barrel (bbl). The gains came as market participants assess a deepening supply shortfall for the global oil market amid depleted inventories in the European Union and Asia and accelerated gas-to-oil switching. The U.S. economy added a disappointing 194,000 new jobs in September, the lowest monthly job growth rate this year and well below estimates for 450,000 filled positions. The job growth in August was revised higher by 131,000 to 366,000, while July's employment figures topped 1.091 million. Centers for Disease Control and Prevention shows COVID-19 cases plateaued around mid-September and sustained a downtrend into early October. September's employment report is unlikely to change Federal Reserve plans to begin slowing the pace of $120 billion monthly asset purchases sometime later this year, with Fed Chairman Jerome Powell indicating the central bank doesn't need a "knock-out or super-strong employment report" to start tapering. On Friday, major stock indices on Wall Street finished mixed, and the U.S. dollar declined 0.15% against a basket of foreign currencies to settle at 94.079, offering support for the November West Texas Intermediate contract that settled the session at a $79.35-per-bbl seven-year high on the spot continuous chart, paring an advance to an $80.11 intrasession high. International benchmark Brent crude advanced $0.44 to $82.39, while gaining more than $3 per bbl on the week. NYMEX November ULSD futures moved up 1.41 cents to $2.4737 gallon, and front-month RBOB futures rallied 3.18 cents or 1.5% to a $2.3662-per-gallon settlement. Oil futures were bolstered earlier in the week by a decision from the Organization of the Petroleum Exporting Countries and Russia-led producers not to raise output above previously agreed to 400,000 barrels per day (bpd) next month despite fuel shortages across major economies and excess demand growth from gas-to-oil switching. Bank of America commodity research estimates that in a sustained switching scenario, the oil deficit this winter could easily exceed 2 million bpd, with top-line demand pushed up by 1 million to 2 million bpd mainly from Asian fuel burning capacity, particularly in Japan. In Europe, one of the principal concerns is the reliability of Russian gas supplies which President Vladimir Putin said would reach new record highs this winter. Analysts were quick to point out that Russian gas exports alone cannot solve Europe's energy crisis brought by lower-than-expected output from renewable energy sources and depleted inventories. Russia's gas production reached a decade-high in September, and domestic demand remains exceptionally robust heading into what forecasters say would be a "cold and snowy" winter. It remains unclear if Gazprom in fact has the capacity to rapidly boost gas exports.
WTI Breaks $80 As Oil Completes Seventh Weekly Gain - U.S. crude futures topped $80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight. Futures in New York rose 1.3% on Friday, popping above the key, psychological level before pulling back. This week brought many indications that supplies will remain constrained: Saudi Aramco said a global natural gas shortage was already boosting oil demand for power generation and heating, and the U.S. Energy Department said that it had no plans “at this time” to tap the nation’s oil reserves. A weakening of the dollar on the back of worse-than-expected U.S. labor market data on Friday also boosted the appeal of commodities priced in the currency. The U.S. benchmark posted a seventh straight weekly gain, the longest stretch of advances since December. The economic recovery from the pandemic, along with supply disruptions in the U.S. Gulf of Mexico, had already tightened the market before rising natural gas prices spurred additional demand for oil products like diesel and fuel oil. The decision by OPEC producers and their allies to only modestly increase output in November threatens to further constrain supplies. Meanwhile, various underlying oil market gauges are also showing signs of strength. West Texas Intermediate crude’s nearest contract traded at the biggest premium to second-month futures since August in a sign of rising demand and tight supplies. The so-called prompt spread has increased as more of the world attempts to substitute fuel oil for natural gas as quickly as possible. “They don’t need to buy it a month from now, they needed it yesterday,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “It’s a panic buyer’s situation.” West Texas Intermediate crude for November delivery climbed $1.05 to settle at $79.35 a barrel in New York. Brent for December settlement rose 44 cents to settle at $82.39 a barrel. Meanwhile, China is still facing power outages and Beijing has ordered its state-owned firms to secure energy supplies for winter at all costs. Chinese fuel oil futures jumped almost 10% on Friday as local markets resumed after a week-long national holiday.
U.S. oil futures post a nearly 5% weekly climb after touching highs above $80 a barrel - West Texas Intermediate crude for November delivery rose $1.05, or 1.3%, to settle at $79.35 a barrel on the New York Mercantile Exchange, after touching a high of $80.11.Front-month contract prices for the U.S. benchmark finished at their highest since Oct. 31, 2014, according to Dow Jones Market Data. They settled up 4.6% for the week. December Brent crude, the global benchmark, rose 44 cents, or 0.5%, to $82.39 a barrel on ICE Futures Europe, up 4.9% for the week. It marked fifth straight weekly climb.Both WTI and Brent crude marked their seventh weekly gain in a row. November natural gas fell by 11 cents, or 2%, to settle at $5.565 per million British thermal units, leaving it down 1% for the week after bouts of volatility. Prices have still more than doubled year to date. More broadly, there are three reasons why U.S. oil prices traded around their highest levels since 2014.The first is oil production “restraint” by the Organization of the Petroleum Exporting Countries, which has been “very conservative in adding to production for fear of another COVID-driven slowdown,” The second is the “recovering economy,” with the U.S. doing better than the rest of the world, with its oil consumption now back to the level it was before the pandemic.And third, “U.S. shale production growth has not been fast enough to return to 2019 levels as investment in new wells is slower,” said Williams. Exploration and production shareholders “want a more immediate return on their investment.” Data from Baker Hughes on Friday, however, showed a fifth straight weekly rise in the number of U.S. rigs drilling for oil, up 5 at 433 this week, implying an upcoming increase in output.Earlier this week WTI crude prices pulled back after marking their highest settlement since October 2014 on Tuesday, after the Financial Times reported that U.S. Energy Secretary Jennifer Granholm hinted at a possible tapping of the Strategic Petroleum Reserve and said she hadn’t ruled out a ban on crude exports. Oil reversed back to the upside though on Thursday after a news report that the Energy Department had said it had no plans “at this time” to tap the SPR.“All the same, the idea of releasing strategic oil reserves will probably not be off the table entirely if oil prices continue to rise,” “In view of the current robust demand, which is likely to be additionally boosted by the switch from gas to oil, plus the restrictive OPEC+ production policy, the oil market will remain tight until year’s end,” Meanwhile, soaring natural-gas prices were seen adding to demand for crude, as gas-fired power plants, particularly in Asia, and other gas users switch to oil. Meanwhile, OPEC+ earlier this week stuck to its plans to increase crude production in monthly increments of 400,000 barrels a day, defying pressure to relax existing output curbs more quickly.As a result, Commerzbank raised its forecast for Brent crude prices in the current quarter to $85 a barrel from its previous forecast of $75, and lifted its first-quarter 2022 estimate to $75 a barrel from $70, Fritsch said. Round out action on Nymex Friday, November gasoline tacked on 1.4% to $2.366 a gallon, ending 5.2% higher for the week, while November heating oil added 0.6% to $2.474 a gallon, for a 3.8% weekly climb.
Iraq elections held as Washington’s puppet state nears collapse -Iraq’s elections for its 329-seat parliament that will choose the president and prime minister-typically after months of horse trading between the multiple political blocs—are set for October 10. Voter turnout is expected to be lower than the 44 percent of the 25 million eligible voters that cast their ballot in the 2018 elections as calls to boycott the elections grow. The elections take place amid increasing hostility towards the political setup established after the 2003 US-led invasion and overthrow of Saddam Hussein’s regime, simmering protests over endemic corruption, the terrible social and economic conditions and water and power outages. These conditions are exacerbated by low oil prices, the COVID-19 pandemic, and the fallout from the US withdrawal from Afghanistan. Prime Minister Mustafa al-Kadhimi, Washington’s man in Baghdad who lacks both popular support and a political base, is seeking a second term as prime minister in Saturday’s elections that have been brought forward to appease protesters. The former intelligence officer became prime minister in May 2020. He did so after months-long mass protests, starting in October 2019 against inequality, poverty, corruption, the sectarian-ethnic political system and its rival external backers Washington and Tehran, that swept across Baghdad and Iraq’s southern region, brought down the government of Adil Abdul-Mahdi. The government sought to put down the protests, the largest since 2003 and known as the Tishreen (October) movement, with lethal force. It deployed the security forces and paramilitary groups to shoot down more than 600 protestors, further inflaming tensions until the pandemic and the accompanying restrictions emptied the streets. The repression has continued under al-Kadhimi, with militias affiliated to the various political parties assassinating 34 political activists, local leaders and outspoken journalists and critics, including Hisham al-Hashimi, a critic of Iraq’s militias. After three decades of US-led wars, the outbreak of a third world war, which would be fought with nuclear weapons, is an imminent and concrete danger. Key demands of the youthful and largely leaderless protest movement included early elections based on new legislation that would overturn Iraq’s sectarian political system and an investigation into the killings by the security forces. Neither these nor any social demands have been met.
Blinken to hold meetings next week with UAE, Israeli foreign ministers -Secretary of State Antony Blinken is slated to hold meetings next week with foreign ministers from the United Arab Emirates and Israel, the State Department announced on Saturday.The State Department said in a statement that Blinken would be meeting with both Israeli Foreign Minister Yair Lapid and the UAE Foreign Minister Sheikh Abdullah Bin Zayed Al Nahyan next Wednesday. Bilateral meetings will be held between the United States and each country and then there will be a trilateral meeting with all three representatives. “They will discuss progress made since the signing of the Abraham Accords last year, future opportunities for collaboration, and bilateral issues including regional security and stability,” the State Department said.The Trump administration helped broker a deal, known as the “Abraham Accords,” last year that normalized relations between Israel, the UAE and Bahrain. All three countries signed the agreement in September 2020. According to Reuters, Israel and Morocco established diplomatic ties in December 2020. Earlier this year, Sudan said that it would also formalize ties with Israel and sign the Abraham Accords. The deal was praised by then-candidate Biden in August 2020, though he claimed that the Obama administration, during which he served as vice president, had helped make inroads toward the success of that deal.