oil prices at 7 year high after longest string of weekly gains on record; mid-october gasoline demand at a seasonal record high; gasoline supplies at a 23 month low; distillate supplies at an 18 month low; DUC backlog at 6.1 months; Bakken and Eagle Ford DUCs lowest on record…
Oil prices rose for a record 9th consecutive week to a fresh 7 year high following across the board withdrawals from US oil & product inventories....after rising 3.7% to a 7 year high of $82.28 a barrel last week as global shortages of coal and natural gas were expected to lead to increased demand for oil, the contract price for US light sweet crude for November delivery opened higher on Monday as oil traders looked to easing of pandemic restrictions and a colder winter to boost demand, but eased off of multiyear highs to settle just 16 cents higher at $82.44 a barrel, after data showed US industrial production unexpectedly fell 1.3% in September, the most in seven months, implying that industrial demand for energy would be weaker than expected...after opening lower, oil rose on Tuesday and was again trading near multiyear highs as an energy supply crunch continued across the globe, and settled 52 cents, or 0.6%, higher at $82.96 a barrel, as renewed worries about natural-gas supplies fed expectations that shortages would boost demand for oil...oil prices moved lower in pre-inventory trade Wednesday, after preliminary data from the American Petroleum Institute showed a much larger-than-expected build in domestic crude oil inventories, but then spiked into positive territory after the EIA reported across the board inventory withdrawals, and settled with a gain of 91 cents as trading in November oil expired with the contract priced at a seven year high of $83.87 a barrel, as gasoline inventories fell to the lowest since November 2019, while gasoline demand was at the highest level in any autumn since 2007...with Thursday's oil quotes referencing the contract price for US light sweet crude for December delivery, which had risen 98 cents to $83.32 on Wednesday, an initial early rally reversed after NOAA forecast that winter in much of the US would be warmer than average, and then continued lower to finish down 92 cents at $82.20 a barrel, after Russia's Putin said the OPEC+ cartel, including Russia, might produce more barrels than it had announced....oil then rallied in early morning trading Friday, with prices supported by a weaker dollar and equities trading near record highs, and then continued to climb on continued tightness in U.S. supply, even as lower coal and gas prices curbed fuel-switching, and finished $1.26 or 1.5%, higher at $83.76 per barrel after Baker Hughes reported the first decline in the number of operating oil rigs in the US since the week ended Sept. 10, underscoring the laggard recovery in domestic production despite elevated price levels...hence, oil prices finished the week 1.8% higher, while the December oil contract, which had started the week priced at $81.73 a barrel, ending 2.5% higher, thus completing the ninth consecutive weekly increase and the longest-ever weekly winning streak for front-month WTI contracts, based on Dow Jones Market records going back to April 1983...
With oil prices at a 7 year high, we'll again put up a long term graph and take a look..
The above is a screenshot of the current interactive oil price chart from barchart.com, which i have again 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 interactive chart can also 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 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....meanwhile, 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... you’ll note the price is currently quote at $84.11, reflecting Saturday’s off market trading..
to determine when prices were last at that level, we converted that interactive oil graph to show daily prices, and then tediously scrolled the daily price graph back to 2014...looking for a daily closing price higher than this week's close $83.76 a barrel, we arrived at October 14th, 2014, when the November 2014 oil contract opened at $84.98 a barrel and closed at $81.84....the next day, oil’s intraday high was $82.45, and it never breached $83 a barrel after that, so this week's closing price beat a seven year high by 8 days.. but we’d also note that September 2014 prices never fell below $90.41 a barrel, and closed at $91.16, so it will likely be a while before we’ll see records hitting that level…
meanwhile, natural gas prices fell for the third straight week, following a seven week surge to a twelve year high on October 5th, as warm weather persisted over most of the US, keeping demand for heating low.....after falling 2.8% to $5.410 per mmBTU last week as mild weather lowered demand and allowed for surplus gas to be stored before winter, the contract price of natural gas for November delivery ignored a 10 percent jump in European natural gas prices after Russia failed to supply additional fuel to Europe and opened 2% lower on Monday as cold weather remained largely absent from long-term forecasts, and continued falling to settle 42.1 cents, or 8% lower at $4.989 per mmBTU, the first close below $5 since September 10th...but bargain hunters came back into the market on Tuesday and pushed gas prices up 9.9 cents to $5.088 per mmBTU, even as the weather remained benign, with highs in the 70s as far north as the Dakotas and Minnesota, and then November gas added 8.2 cents to close at $5.170 per mmBTU on Wednesday, as bullish speculators pushed prices higher...the brief rally faltered on Thursday, however, when natural gas slipped 5.5 cents to $5.115 per mmBTU, on a slightly bigger-than-expected storage build, an easing of gas prices in Europe and on forecasts for lower U.S. demand next week than had been expected...but the rally kicked back in on Friday as natural gas prices climbed 16.5 cents or about 3% to a one-week high of $5.280 per mmBTU, on forecasts that cooler weather would soon boost heating and on an increase in global prices, underpinning LNG demand, which nonetheless still left gas prices down 2.4% for the week...
The EIA's natural gas storage report for the week ending October 15th indicated that the amount of working natural gas held in underground storage in the US rose by 92 billion cubic feet to 3,461 billion cubic feet by the end of the week, which still left our gas supplies 458 billion cubic feet, or 11.7% below the 3,919 billion cubic feet that were in storage on October 15th of last year, and 151 billion cubic feet, or 4.2% below the five-year average of 3,612 billion cubic feet of natural gas that have been in storage as of the 15th of October in recent years...the 92 billion cubic foot increase in US natural gas in working storage this week was a bit higher than the average forecast for a 90 billion cubic foot addition from a Reuters survey of analysts, but well less than the average addition of 69 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 far below the 49 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 15th indicated that after another substantial increase in our oil exports and modest decreases in our oil imports and our oil production, we had to withdraw oil from our stored commercial crude supplies for the eighth time in eleven weeks and for the thirty-fourth time in the past forty-eight weeks….our imports of crude oil fell by an average of 169,000 barrels per day to an average of 5,825,000 barrels per day, after falling by an average of 1,041,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 546,000 barrels per day to an average of 3,060,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,765,000 barrels of per day during the week ending October 15th, 715,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly 100,000 barrels per day lower 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 14,065,000 barrels per day during the cited reporting week…
meanwhile, US oil refineries reported they were processing an average of 14,990,000 barrels of crude per day during the week ending October 15th, 71,000 fewer 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 average of 304,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 622,000 barrels per day less than what our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+622,000) 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....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 fell to an average of 6,352,000 barrels per day last week, which was still 19.5% more than the 5,315,000 barrel per day average that we were importing over the same four-week period last year…the rounded the 304,000 barrel per day net decrease in our crude inventories included 242,000 barrels per day that were pulled out of our commercially available stocks of crude oil, and 62,000 barrels per day of oil that had been stored in 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 100,000 barrels per day lower at 11.300,000 barrels per day even though the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 10,900,000 barrels per day because a 22,000 barrel per day decrease in Alaska’s oil production to 431,000 barrels per day subtracted 100,000 barrels per day from 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 84.7% of their capacity while using those 14,990,000 barrels of crude per day during the week ending October 15th, down from 86.7% of capacity the prior week, and below normal utilization for early autumn refinery operations…the 14,990,000 barrels per day of oil that were refined this week were still 15.1% more barrels than the 13,026,000 barrels of crude that were being processed daily during the pandemic impacted week ending October 16th of last year, but 5.5% less than the 15,865,000 barrels of crude that were being processed daily during the week ending October 18th, 2019, when US refineries were operating at what was then also a below normal 85.2% of capacity, a two year low at that time…
even with this week’s decrease in the amount of oil being refined, the gasoline output from our refineries was higher, increasing by 455,000 barrels per day to 10,060,000 barrels per day during the week ending October 15th, after our gasoline output had increased by 239,000 barrels per day over the prior week.…this week’s gasoline production was 12.6% more than the 8,933,000 barrels of gasoline that were being produced daily over the same week of last year, but still 0.4% lower than the gasoline production of 10,098,000 barrels per day during the week ending October 18th, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 289,000 barrels per day to 4,417,000 barrels per day, after our distillates output had decreased by 72,000 barrels per day over the prior week…even after this week’s decrease, our distillates output was still 6.9% more than the 4,131,000 barrels of distillates that were being produced daily during the week ending October 16th, 2020, but 7.3% less than the 4,765,000 barrels of distillates that were being produced daily during the week ending October 18th, 2019..
despite the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the second time in five weeks, and for fifteenth time in twenty-seven weeks, falling by 5,368,000 barrels to a 23 month low of 217,739,000 barrels during the week ending October 15th, after our gasoline inventories had decreased by 1,958,000 barrels over the prior week...our gasoline supplies decreased by more this week because the amount of gasoline supplied to US users rose by 448,000 barrels per day to 9,634,000 barrels per day, while our imports of gasoline rose by 63,000 barrels per day to 606,000 barrels per day, and while our exports of gasoline fell by 166,000 barrels per day to 533,000 barrels per day…after this week’s inventory decrease, our gasoline supplies were 4.1% lower than last October 16th's gasoline inventories of 227,016,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year…meanwhile, the running four week average for gasoline supplied, indicating gasoline demand, was the highest ever for mid-October...
with the decrease in our distillates production, our supplies of distillate fuels also decreased, for the eighth time in ten weeks and for the 19th time in 29 weeks, falling by 1,913,000 barrels to an 18 month low of 129,307,000 barrels during the week ending October 15th, after our distillates supplies had decreased by 24,000 barrels during the prior week….our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 346,000 barrels per day to 4,278,000 barrels per day, while our imports of distillates rose by 12,000 barrels per day to 202,000 barrels per day, and while our exports of distillates fell by 68,000 barrels per day to 900,000 barrels per day...after nineteen inventory decreases over the past twenty-eight weeks, our distillate supplies at the end of the week were 22.0% below the 160,719,000 barrels of distillates that we had in storage on October 16th, 2020, and about 10% below the five year average of distillates stocks for this time of the year…
meanwhile, after the decrease in our oil imports and the increase in our oil exports, our commercial supplies of crude oil in storage fell for the twenty-second time in the past tthirty weeks and for the 34th time in the past year, decreasing by 431,000 barrels over the week, from 426,975,000 barrels on October 8th to 426,544,000 barrels on October 15th, after our commercial crude supplies had increased by 6,088,000 barrels over the prior week…after this week’s modest decrease, our commercial crude oil inventories remained about 6% below the most recent five-year average of crude oil supplies for this time of year, but were still about 28% above the average of our crude oil stocks at the third weekend 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 15th were 12.6% less than the 488,107,000 barrels of oil we had in commercial storage on October 16th of 2020, and are now 1.5% less than the 433,151,000 barrels of oil that we had in storage on October 18th of 2019, but are still 0.9% more than the 422,787,000 barrels of oil we had in commercial storage on October 19th 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 are continuing to track the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....we find that total oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, fell by 11,499,000 barrels this week, from 1,855,682,000 barrels on October 8th to 1,844,183,000 barrels on October 15th, but they remain 2,556,000 barrels higher than the six year low of four weeks earlier...
This Week's Rig Count
The number of drilling rigs active in the US decreased for just the 7th time out of the past 57 weeks during the week ending October 22nd, while they were still 31.6% below the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US decreased by one to 542 rigs this past week, which was still 255 more rigs the pandemic hit 287 rigs that were in use as of the October 23rd report of 2020, but was also still 1,387 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 down by 2 to 443 oil rigs this week, after they had risen by 12 oil rigs the prior week, but there are still 232 more oil rigs active now than were running a year ago, even as they still amount to just 27.5% 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 up by 1 to 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….last year's rig count also included 3 rigs that Baker Hughes had classified as "miscellaneous', while there are no such "miscellaneous' rigs running this week
The Gulf of Mexico rig count was up by one rigs to thirteen rigs this week, which is still short of the 14 rigs deployed in the Gulf the week before Hurricane Ida approached, with eleven of this week's Gulf rigs drilling for oil in Louisiana waters and another drilling for oil in Alaminos Canyon, offshore from Texas....the Gulf rig count is now equal to that of a year ago, when 12 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil in Texas waters…since there is now no drilling off our other coasts, nor was there a year ago, the Gulf rig count is equal to the national totals..
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 one to 482 horizontal rigs this week, which was nearly double the 245 horizontal rigs that were in use in the US on October 23rd of last year, but was just 35.1% 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 2 to 38 vertical rigs this week, but those were still up by 7 from the 21 vertical rigs that were operating during the same week a year ago….at the same time, the directional rig count was unchanged at 32 directional rigs this week, and those are still up by 11 from the 21 directional rigs that were in use on October 23rd 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 22nd, the second column shows the change in the number of working rigs between last week’s count (October 15th) and this week’s (October 22nd) count, the third column shows last week’s October 15th 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 23rd of October, 2020...
as you can see, there were quite a few rig changes in basins that Baker Hughes doesn't cover.....the three rigs that were pulled out of Wyoming included two of those, as well as the rig that was pulled out of the DJ Niobrara chalk of the Rockies front range...while Wyoming recently had drilling activity in four different basins, the only Utah basin that has any rigs recently was the Uintah, so that's where the Utah rig shutdown had been...next, checking the Rigs by State file at Baker Hughes for changes in the Texas Permian basin, we find that four rigs were pulled out of Texas Oil District 8, which is the core Permian Delaware, while three rigs were added in Texas Oil District 7C, which includes the southern counties in the Permian Midland, and hence there was a net decrease of one rig in the Texas Permian...since the national Permian basin rig count was up by one, that means that the two rigs that were added in New Mexico had to have been set up in the westernmost Permian Delaware...meanwhile, the rig added in the Gulf of Mexico accounts for the increase in Louisiana, while the natural gas rig that was added this week was set up in a basin that Baker Hughes doesn't track...
DUC well report for September
Monday saw the release of the EIA's Drilling Productivity Report for October, which includes the EIA's September data for drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions....that data showed a decrease in uncompleted wells nationally for the 16th month in a row, as both completions of drilled wells and drilling of new wells increased, but remained below the pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 241 wells, falling from 5,626 DUC wells in August to 5,385 DUC wells in September, which was also 37.2% fewer DUCs than the 8,577 wells that had been drilled but remained uncompleted as of the end of September of a year ago...this month's DUC decrease occurred as 635 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during September, up from the 609 wells that were drilled in August, while 876 wells were completed and brought into production by fracking, up from the 860 completions seen in August, and up from the pandemic hit 523 completions seen in September of last year, but still down by 18.4% from the 1,074 completions of September 2019....at the September completion rate, the 5,385 drilled but uncompleted wells left at the end of the month represents a 6.1 month backlog of wells that have been drilled but are not yet fracked, down from the 6.7 month DUC well backlog of a month ago, a ratio that is now near that of the year prior to the pandemic, despite a completion rate that is still around a quarter below the pre-pandemic norm...
both oil producing regions and natural gas producing regions saw DUC well decreases in September, and none of the major basins reported a DUC well increase....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 125, from 1,994 DUC wells at the end of August to 1,869 DUCs at the end of September, as 284 new wells were drilled into the Permian during September, while 409 wells in the region were being fracked...in addition, DUCs in the Eagle Ford shale of south Texas decreased by 43, from 869 DUC wells at the end of August to to a record low of 826 DUCs at the end of September, as 61 wells were drilled in the Eagle Ford during September, while 104 already drilled Eagle Ford wells were completed.... at the same time, there was also a decrease of 27 DUC wells in the Bakken of North Dakota, where DUC wells fell from 566 at the end of August to a record low of 539 DUCs at the end of September, as 41 wells were drilled into the Bakken during September, while 68 of the drilled wells in the Bakken were being fracked....meanwhile, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 16, falling from 824 at the end of August to 808 DUC wells at the end of September, as 38 wells were drilled into the Anadarko basin during September, while 54 Anadarko wells were completed....in addition, DUC wells in the Niobrara chalk of the Rockies' front range decreased by 8, falling from 379 at the end of August to 371 DUC wells at the end of September, as 91 wells were drilled into the Niobrara chalk during August, while 99 Niobrara wells were being fracked....
among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 16 wells, from 588 DUCs at the end of August to 572 DUCs at the end of September, as 71 wells were drilled into the Marcellus and Utica shales during the month, while 87 of the already drilled wells in the region were fracked....meanwhile, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region was down by six to 400 DUCs, as 49 wells were drilled into the Haynesville during September, while 55 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of September, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 219 wells to 4,413 wells, while the uncompleted well count in the natural gas basins (the Marcellus, the Utica, and the Haynesville) decreased by 22 wells to 972 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...
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Chesapeake Utilities completes RNG pipeline project - Chesapeake Utilities Corporation announced that construction of its Noble Road Landfill Renewable Natural Gas (RNG) pipeline project has been completed. The Company's subsidiary, Aspire Energy of Ohio, constructed the 33.1-mile pipeline, which will transport RNG generated from the Noble Road Landfill in Shiloh, Ohio, to Aspire Energy's pipeline system, displacing conventionally produced natural gas. In conjunction with this expansion, Aspire Energy also upgraded an existing compressor station and installed two new metering and regulation sites. Chesapeake Utilities invested $7.3 million in the project, which was constructed in just over a six-month period. Throughput of the RNG is expected to begin in the fourth quarter of 2021. The Company expects to generate gross margin of $0.1 million in 2021; $0.75 million annually in 2022 through 2025; and $1 million in 2026 and thereafter. Aspire Energy partnered with OPAL Fuels, an emerging leader in the production and distribution of RNG, and Rumpke Waste & Recycling, one of the nation's largest privately-owned residential and commercial waste and recycling firms. Rumpke will extract and capture waste methane from the Noble Road Landfill, and OPAL Fuels will utilize its new, state-of-the-art facility to remove carbon dioxide and other components from the methane, purifying the biogas to pipeline quality standards. In addition to supplying Aspire Energy's customers, the RNG will be dispensed into fueling stations to fuel compressed natural gas (CNG) vehicles also via OPAL Fuels. "At Chesapeake Utilities, we've made a strategic decision to actively support the sustainability efforts of the communities we serve. Included in that commitment is an active engagement in environmental stewardship and the development and supply of lower carbon energy sources, like RNG," said Jeff Householder, president and chief executive officer of Chesapeake Utilities Corporation. "The Noble Road pipeline represents the first of many RNG projects under development that will deliver energy that contributes to a sustainable future. Transporting RNG from the landfill through our pipeline system provides a path to markets that supports the economics of the biogas production and significantly reduces total carbon emissions. The outcome of this collaborative project is a win for customers, the local community and the environment." The Noble Road project will capture and transport quantities of renewable natural gas equivalent to 6.9 million gasoline gas equivalents (GGE) per year, enough to fuel 725 biofuel trucks.
'All of this is going to be gone': Residents worried about pipeline approved for Delaware, Union counties | 10tv.com — Andrea Yagoda starts every day the same way. She walks the trail her husband built on their 28-acre property behind their home in Delaware. The property straddles both Delaware and Union Counties – two counties that will eventually have a new natural gas pipeline.Now a retired lawyer, Yagoda traded the city life in New York for more space and quiet in central Ohio in 1978. “All of this is going to be gone,” she said while pointing to a tree line along that trail behind her home.She said in June of 2020 she got a notice about a proposed 16-mile pipeline, called theColumbia Gas Northern Loop Project.Yagoda explained the project will wipe out many of the trees on her property.Earlier this month, Ohio's Power Siting Board approved the plan.It will run through both counties, crossing Route 42 and the Scioto River, down to Glacier Ridge Metro Park. According to Columbia Gas of Ohio, existing lines can't keep up with the demand for this growing area. "My question was directly to the radius of harm if there was a problem with the pipeline and I think everyone has a right to know that because that's placing us in danger," she said. "I asked four times they would not answer that question."“Whenever we put any kind of a natural gas pipeline in the safety of our communities is paramount to anything else,” said Parisi. "Typically with this size of pipe that we will be building, you know, we'll have a right of way that ultimately runs the extent of the pipe. We'll have people out there monitoring the pipeline on a fairly regular basis to ensure that we don't have any issues or corrosion."
‘Orphaned’ wells are a problem in Pa., and there are many – -The number of abandoned oil and gas wells that exist in the United States is the subject of a new report by the Environmental Defense Fund. Researchers found more than 81,000 documented wells have been left unplugged by former owners, which far exceeds the previous estimate of 56,000.There are 8,840 abandoned and unplugged wells documented in Western Pennsylvania, according to the report.The report found regional clusters of orphan wells in the Appalachian region and south central states like Kentucky, Oklahoma and Texas. Oklahoma had the greatest concentration of wells.“It’s almost a visual history lesson of oil and gas development in the United States,” said Adam Peltz, a senior attorney at the Environmental Defense Fund. When a well dries up, the Oil and Gas Act of 1984 requires the owners and operators to plug them upon abandonment and report that information to the Department of Environmental Protection.Orphan wells have no legal or financial owner and as a result become wards of the state. They are orphaned often when their owner fails to properly decommission the well, leaving the burden on government agencies like the department of environmental protection. These aren’t just holes in the ground. Orphan wells are a source of climate warming methane emissions. The EPA estimates that emissions from all inactive, unplugged wells ranges from 7 to 20 million tons of carbon dioxide equivalent per year in the form of methane. The Environmental Defense Fund compares this to emissions from 1.5 million to 4.3 million cars.“It’s a meaningful source of short term climate warming. That’s a problem for everyone,” Peltz said.Orphan wells have also been known to contaminate air, water and soil.“Their mere presence can lower property values,” Peltz added.
DEP denies PennEnergy Resources' request to draw millions of gallons of water per day from Big Sewickley Creek A decision by state environmental regulators to deny an energy company’s request to draw up to 3 million gallons of water a day from Big Sewickley Creek and one of its tributaries for fracking is being lauded as an important step toward protecting the waterway’s ecosystem.PennEnergy Resources’ application in June to draw water from the creek for natural gas drilling was met by resistance from a local state lawmaker whose district includes portions of the waterway. The company’s request included Big Sewickley and the North Fork Big Sewickley Creek tributary.Members of the Big Sewickley Creek Watershed Association also raised concerns that drawing so much water from the creek could be harmful to wildlife because the creek already experiences low levels during dry periods.They said any water drawn from the creek could permanently affect the existing habitat. The water drawn from the creeks would be used for hydraulic fracturing, or “fracking,” a technique used to extract oil and gas from bedrock by injecting a high-pressure mixture of water, sand or gravel and chemicals.State Rep. Bob Matzie, D-16th, said while he supports natural gas extraction, he called on PennEnergy to find an alternative source for the water it needs. He sent a letter to state environmental officials in July asking them to reject the application.Matzie said even if the company appeals the decision and it is overturned, PennEnergy should abandon its plan, “not because it’s the most sound business decision, but because it’s the right thing to do.”PennEnergy has 30 days to appeal the DEP’s decision. Company officials did not respond to messages seeking comment about the application denial or whether they plan to file an appeal.Dakota Raap, a fisheries biologist for the state Fish and Boat Commission, said in an email to the Tribune-Review that the agency notified the DEP that Big Sewickley Creek supports a stocked trout population and both it and the North Fork tributary are home to the Southern Redbelly Dace, which is a threatened species in Pennsylvania.In its Oct. 13 letter denying PennEnergy’s application, DEP officials noted, among other things, that the company failed to provide enough information about how the reduction in water levels caused by the withdrawal will affect the threatened fish species or the wetlands that have been identified in the area.A number of the items identified by the DEP as deficient in PennEnergy’s application are related to the equipment and processes used to draw water from the creek. Also among the seven deficiencies noted in PennEnergy’s application was a failure to provide “enough information to determine if the proposed project has a substantial risk to the environment.”To date, PennEnergy has not satisfied this application requirement,” DEP officials wrote in their letter to PennEnergy, a copy of which was obtained by the Trib.
Court: Town must turn over emails to gas pipeline builder --A judge on Friday ordered the release of emails between officials in a Philadelphia suburb and the developer of a natural gas pipeline that was charged with environmental crimes related to construction of the multi-billion-dollar project.Officials in Middletown Township have been refusing to produce the records for nearly a year, claiming they were exempt from disclosure under the state’s open records law. Energy Transfer, the owner of the Mariner East pipeline system, also opposed their release. A Delaware County judge ruled Friday that the records are public, and ordered the township to turn them over to the owners of a 124-unit apartment complex along the pipeline route.Energy Transfer subsidiary Sunoco Pipeline LP, which has been installing two new pipelines to take natural gas liquids from the Marcellus Shale gas field in western Pennsylvania to an export terminal near Philadelphia, seized private property at Glen Riddle Station Apartments for the pipeline project.Glen Riddle’s owners say pipeline construction has threatened the health and safety of the residents. The pipeline’s route splits the apartment complex in half.
Pennsylvania Court Orders Release of Emails by Energy Transfer Regarding ME Pipeline - The Delaware County Court of Common Pleas in Pennsylvania last week ordered the public release of emails between Energy Transfer LP, which is expanding the Mariner East (ME) natural gas liquids (NGL) pipeline system, and officials in a county township. Since 2016 ME has carried increasing NGL volumes from processing facilities in the Marcellus and Utica shale plays eastward to Energy Transfer’s Marcus Hook Industrial Complex, an NGL hub on the Delaware River near Philadelphia. The pipeline system, which traverses Pennsylvania and extends into Ohio and West Virginia, will be able to move 280,000-300,000 b/d of LPG and 70,000 b/d of ethane eastward by the end of this year, according to a Sept. 2021 investor presentation on Energy Transfer’s website. The pipeline project has faced numerous regulatory, legal and construction setbacks.The recent Delaware County court order corresponds to a request under Pennsylvania’s right-to-know law for emails between Energy Transfer/Sunoco LP and officials with Middletown Township. In late May a water main break that occurred during ME construction left residents of the Glen Riddle Station Apartments without water. The incident also prompted subsequent questions from the apartment complex owner about whether the water was safe to drink after service was restored. The township had claimed it was exempt from releasing the emails in question, but the court earlier this month ruled otherwise.“From Day One, we believed the public had a right to know what discussions and agreements took place between Energy Transfer/Sunoco and Middletown Township,” said Glen Riddle Station owner spokesperson Stephen Iacobucci. The township’s council for some reason he said, “didn’t want the public to know about these dealings. We thank the court for agreeing with us, and we look forward to examining exactly what happened to allow Sunoco to do what it has done to our community. “It is our hope that Middletown Township won’t waste more taxpayer money with a frivolous appeal of this sound decision and allows the public its rightful opportunity to examine what are clearly public documents.”
Neighbors in Penn-Trafford protesting against drilling site — Protesters from Penn-Trafford were in front of the Pennsylvania Department of Environmental Protection office in Pittsburgh afraid a fracking site will create a ghost town. The well pad is along First Street in Trafford. A sign on the property has the Apex Energy LLC company on it. Advertisement “The courts and the Penn Township leaders and our regulators say this is only temporary, it’s not with all those wells,” neighbor Larry Irr said. The group said 2,823 residents live within 1 mile of the proposed fracking site, and more than 900 live within half a mile. “I don’t want this well pad to be built because it’s simply too many people, too close to people,” neighbor Gillian Graber said. “We have definitive evidence that’s affirmed by the attorney general that this will be harmful to our residents.” Graber went inside the DEP building to deliver a letter requesting a public hearing and listing the concerns from the residents, which includes quality of life and negative impacts on their air, land and water. “We would like to see, No. 1, a policy change at a larger level,” Graber said. “But we would like to see it start with this particular well pad, for them to deny it.” Pittsburgh’s Action News 4 requested a comment from the Pennsylvania Department of Environmental Protection and the company applying for the permit to use this well pad.
Senators: Activists slowing gas pipelines --Heating costs are expected to rise this winter and three state senators placed the blame squarely on environmental activists that are slowing the natural gas industry by blocking the permitting process which allows natural gas to be transported from wells to consumers.“That extreme left wing is calling for a moratorium on all natural gas industry activities,” said Camera Bartalotta, R-Washington, in her opening statements at a press event Wednesday. Also at the podium at the State Capitol were Gene Yaw, R-Loyalsock and John Yudichak, I-Jim Thorpe, along with representatives of trade unions.“Activists are working day and night to stop the progression on all levels with frivolous lawsuits,”she added.Bartalotta stated that she was speaking as a “concerned citizen who was sick and tired of watching other lawmakers prioritize partisan politics over the well-being of the residents of this state, our country and our globe.”According to statistics from the Energy Information Administration cited by Bartalotta, retail energy prices are starting the winter at multi-year highs. Households are projected to see heating bills jump as much as 54% compared to last winter. Propane is up 54%, with heating oil at 43%, followed by natural gas at 30% and electricity at 6%. Nearly half of the nation’s homes are heated by natural gas, Bartalotta said.“Today, we’re responding to the ill-conceived attacks on this industry and how they are contributing to a devastating global energy crisis,” Bartalotta said. She said that the greatest threat to the affordable, clean natural gas energy is “not a lack of natural resource, a shortage of capable workers or an unwillingness to adhere to environmental regulations. The real threat comes from lawmakers and environmental extremists who do not understand or appreciate how important the oil and gas industry is in our daily lives.” Bartalotta stated that permits in the southwestern part of the state which should take as little as 14 days to be processed are now taking anywhere from 100 days to up to 18 to 24 months. “No one with hundreds of millions of dollars in capital investment is going to wait that long for a return on their investment. They will go elsewhere,” Bartalotta said.
Hearing takes place regarding proposed Longview Power expansion - — The West Virginia Department of Environmental Protection held a hearing Tuesday focused on a proposed expansion of a natural gas-fired power facility in Monongalia County. The forum focused on a $1.1 billion expansion of the Longview Power facility, which currently a 700 megawatt plant and employs 150 full-time workers. The power produced at Longview is distributed through PJM Interconnection across a 13-state region serving 65 million people. Longview Power is seeking an air quality permit for the expansion. Shane Ferguson, a representative of the International Brotherhood of Electrical Workers union, argued for the expansion, saying the facility would attract young electricians looking for their first jobs. “It’s a lifelong career for a lot of apprentices,” he said. “We have apprentices that are now journeymen who started their career on the original project on that site.” Bryan Raber with the Plumbers and Pipefitters Union said the project would result in the creation of hundreds of construction jobs and other positions supporting workers. “The project is a huge job creator for the local workers,” he said. ” With the owner’s written commitment to hire local union construction workers and a payroll during construction of over $110 million, it would not only benefit the workers and their families but the community.” Residents of the Cheat Lake area spoke against the proposal; Duane Nichols said the state should reject the permit application because of the facility’s proposed location near Monongalia County hospitals and schools. “The location puts it in a special category and that any measure of environmental quality and environmental justice would disqualify it on that basis,” he said. Betsy Lawson talked about the current effects of fossil fuel burning in her community, including how acid rain has affected forests near her home. “Every day, I walk along Sugar Grove Road and many of the trees I see are sick or dead,” she said. “Adding more pollution does not just affect the Fort Martin community, but the entire eastern seaboard.” James Kotcon, the chairman of the West Virginia Sierra Club Conservation Committee, said the expansion would add a fossil fuel facility to the state during a time when West Virginia should be embracing renewable energy generation. “Any new facility like this is planning to run for many many years,” he said. “We simply can’t tolerate that if we’re going to protect our climate.”
Manchin campaign finances show oil and gas industry dwarfing in-state and renewable energy contributions --Sen. Joe Manchin, D-W.Va., dismissed fellow Sen. Bernie Sanders, I-Vt., as an “out-of-stater” in a statement Friday on Twitter for penning an op-ed in the Charleston Gazette-Mail urging Manchin to support President Joe Biden’s plans to invest trillions in health and child care, fighting climate change and other priorities.But a specific category of out-of-staters accounted for more than 10 times as much in Manchin campaign contributions than in-state sources did from July 1 through Sept. 30.Employees and political action committees for out-of-state oil and gas companies — most of which are based in Texas — dwarfed contributions from in-state individuals and political action committees by more than tenfold, according to the senator’s newly filed quarterly campaign finance report.Manchin for West Virginia, the senator’s campaign committee, reported drawing just under $1.6 million in contributions in the quarter, leaving it with $5.38 million in cash on hand.More than a quarter of that roughly $1.6 million came from the oil and gas industry. Just over $30,000 came from individuals and political action committees in West Virginia.The quarterly campaign finance report lands with Manchin at the center of the national political universe for withholding a key vote in the evenly divided Senate for Democrats’ $3.5 trillion budget bill, aimed at strengthening the nation’s social safety net. Manchin has drawn intense scrutiny from climate advocates for his pushback against what they say is the most critical measure in the budget bill to address the climate crisis. That’s the Clean Electricity Performance Program, a $150 billion program that would authorize grants for electricity providers that increase clean electricity use by 4% or more annually from 2023 through 2030 and penalties for those that don’t. Manchin has made $4.35 million since 2012 from stock he owns in Enersystems Inc., the Fairmont-based coal brokerage he founded in 1988, according to his U.S. Senate financial disclosures. He has denied that his vested coal interests have influenced his policymaking that affects the coal industry. But he has declined to divest his holdings, saying his ownership is held in a blind trust and, therefore, avoids a conflict of interest.The Manchin campaign’s more than $400,000 in campaign contributions from the oil and gas industry are nearly 10 times as much as the campaign received from renewable energy and conservation organizations. Manchin’s campaign committee received $74,600 from employees and the political action committee for the Texas-based midstream energy company Energy Transfer, whose CEO, Kelcy Warren, contributed $10 million to Donald Trump super PAC America First Action in August 2020.
Thousands of Oil, Gas Wells Need to Be Capped. How Congress Can Help - West Virginia has thousands of abandoned oil and gas wells that need to be capped. The state Department of Environmental Protection has identified more than 4,000, some of them more than a century old.The wells contaminate soil and groundwater and release methane into the atmosphere. Methane is a greenhouse gas that’s 25 times more potent than carbon dioxide.According to federal estimates, the methane released from these wells annually is equivalent to burning as much oil as the nation produces in a day.A bipartisan infrastructure bill the U.S. Senate approved over the summer would provide about $4.7 billion to cap these problem wells.The House of Representatives has not yet voted on the legislation. It’s tied up because lawmakers are still negotiating the size and scope of President Joe Biden’s jobs plan.Ted Boettner, senior researcher at the Ohio River Valley Institute, says the bill would benefit West Virginia’s economy and environment.“This infrastructure bill offers an enormous opportunity for the state of West Virginia and Appalachia as a whole to plug thousands of wells and put thousands of people to work,” he said, “and address climate change.”But is the state’s inventory of orphaned oil and gas in the state accurate? Boettner said the actual number could be staggering.“The real answer to that question is we don’t exactly know,” he said, “because we’ve never tried to go out and document all of them.”Some wells are so old, there’s no documentation of their existence. The state has limited resources to track the ones it knows about, much less find others.“In West Virginia, there could be hundreds of thousands of them,” Boettner said. “So it’s really just the tip of the iceberg.”Orphaned wells can be costly to fix. Boettner says on average, it costs $55,000 to cap a well, usually with concrete. Depth is a major factor driving the cost.Horizontally drilled wells, like those used to produce oil and gas through hydraulic fracturing, could cost as much as $250,000 each.While the state has a program to deal with abandoned wells, it’s small relative to the size of the problem.In the long term, Boettner calls for the creation of a program for oil and gas wells similar to the Abandoned Mine Lands fund. The fund is supported by a tax on coal production.A fee on oil and gas extraction could support a fund to cap oil and gas wells, he says. For now, West Virginia will need to rely on the help that’s in the infrastructure bill.
Climate choir goes to Richmond to protest pipeline - (audio) A "climate emergency choir" performed in Richmond on Monday to ask Governor Northam to put an end to the Mountain Valley Pipeline and demand solutions to climate change. WMRA's Randi B. Hagi reports. Listen Listening... 4:37More than 60 people from the Harrisonburg area marched through downtown Richmond on Monday, singing hymns and protest songs. As they went, they delivered letters to Governor Ralph Northam's office and other public officials, asking for the declaration of a climate emergency and a stop to construction of the Mountain Valley Pipeline.(Group walking and singing) The singers' march culminated on the plaza outside the state capitol building, where organizer Earl Martin, flanked by several small children, read out their letter to the governor.EARL MARTIN: We come this morning as tillers of the Earth, as carpenters, students, teachers, homemakers, engineers, pastors, parents, and children. Many of us are Mennonites and are friends of Mennonites. Many of us are from Harrisonburg. But we come from diverse places. We come with the deepest convictions and yearnings for our human family. As is our tradition, we come singing hymns of hope, singing songs of the sacredness of the Earth. Singing songs of courage and faith. Indeed, we believe we are singing for our very lives.The pipeline has aroused criticism and opposition for years. If completed, it'll carry natural gas from northern West Virginia to a compressor station in Pittsylvania County, Virginia. According to an April press release from the project, approximately 80% of the actual pipeline work is done, and about half of its path has been 'fully restored.'The singers' march culminated on the plaza outside the state capitol building. Activists who spoke on Monday honed in on the pollution caused by the pipeline's construction, potential leaks, and the burning of the fossil fuel it would transport.
Pipeline protesters interrupt Jill Biden’s speech at McAuliffe campaign rally (WRIC) — Terry McAuliffe and Glenn Youngkin – the Democratic and Republican candidates for governor, respectively – both brought out big names on October 15 to rally their supporters ahead of the Nov. 2 election.It’s just another sign of an election that’s ramping up, with a recent Nexstar/Emerson College pollshowing that the two are virtually tied. That’s a big shift from early in the race, when McAuliffe held a steady 5 percent lead over Youngkin. At McAuliffe’s rally, one of the marquee speakers was Dr. Jill Biden, who was featured prominently in campaign materials surrounding the event. But her speech was briefly interrupted by protesters carrying banners reading “Reject pipelines protect the future.”McAuliffe has made green energy a key part of his platform, but his involvement in promoting the Mountain Valley Pipeline sparked protests at the time – and those protests have continued in the intervening years as the project slowly advances.Ultimately, the disruption lasted only a few minutes, as police escorted the protesters from the rally.“You gotta love democracy!” Dr. Biden quipped, before continuing with her prepared remarks.
In Virginia, momentum grows for grassroots group mobilized against now-canceled gas plant - — After leading efforts to block a 1,100-megawatt natural gas plant in their rural backyard this summer, it would be understandable if a local grassroots group opted to close up shop. No more exhausting marathon meetings. No more sifting for key nuggets in piles of arcane documents. And no more scrambling for donations to sustain their endeavor. The thought of such liberation was tempting after two-plus years of doggedness, said La’Veesha Allen Rollins and Wanda Roberts, co-directors of Concerned Citizens of Charles City County, or C5. But the group is not about to quit — not with three more equally consequential energy issues looming in their county. The first two are the proposed 1,650-megawatt Chickahominy Power Plant and its accompanying 83-mile natural gas pipeline. A third is a request by the local landfill to enlarge its footprint. The dump collaborates with a third party to capture enough gas to generate electricity for roughly 2,000 homes. “We’re the voice,” said Roberts, seated in a room near the sanctuary of Cedar Grove Baptist Church in Providence Forge, C5’s in-person hub. “I can’t walk away from this. That’s not an option anymore. We’re too heavily invested.” From a facing table, Allen Rollins nodded vigorously. “We’re putting in all this work and effort to do right by the community,” she said about their disappointment with local officials’ nonresponsiveness. “We’re not getting paid for it. The people who are getting paid to do it aren’t doing it.” Fending off polluting infrastructure isn’t the co-directors’ only goal. They want C5 to become a go-to organization that sets an agenda for community well-being. Achievements can be as small as purchasing basketballs and water bottles for underfunded school athletic teams and as expansive as hiring professionals to conduct baseline air, water and soil studies near proposed energy projects. “We want to empower our residents,” Allen Rollins said. “Nobody wants to feel helpless. Nobody should lose their home or health because somebody is developing something.” C5, with a core of six members and thousands of individual and group supporters, has no doubt that developers of the pair of gas plants targeted their county because they figured nobody would complain. The energy overtures have a strong whiff of environmental racism as close to half of the roughly 7,000 residents are Black and 7% are Native American.
Dominion Energy gave $200k to secretive PAC attacking Youngkin from the right - Big-league political influencer Dominion Energy donated $200,000 to a secretive PAC attacking GOP gubernatorial candidate Glenn Youngkin, a new filing shows.The money from Dominion’s PAC went to Accountability Virginia PAC in Washington, according to a public filing this weekend by Dominion with the Virginia Department of Elections.The political news outlet Axios reported in late September that the Accountability Virginia operation has ties to Democratic activists and is funding an ad campaign in which the Democrats pose as conservatives “to drive a wedge between the Republican candidate for Virginia governor and his core voters.”The ads on Facebook, Instagram, Google and Snapchat target rural areas of the state that support Youngkin, and the ads question his commitment to the Second Amendment, Axios reported.Dominion gave $200,000 between July and September to the PAC running the ads.Youngkin’s campaign said Democrats are desperate.“Forty year politician Terry McAuliffe and the Democratic party are running scared, so they’ve done what all politicians do — call in their special interest cronies to dump obscene amounts of money into shadowy organizations in order to protect their entrenched interests,” Youngkin spokeswoman Macaulay Porter said by email for this story. “Glenn Youngkin is winning on his message of being an outsider running against politics as usual, so it’s no surprise that desperation has set in for the ruling-class that sees their power slipping away.”Dominion spokesman Rayhan Daudani said by email: “There is nothing secretive about any of our company’s political donations. They are disclosed monthly on the company website. We give in a bipartisan, transparent manner as our voluntary disclosures demonstrate and will continue to do so.”He declined to answer why the company preferred McAuliffe over Youngkin in the Executive Mansion. The election is Nov. 2, and early voting is ongoing.Dominion this summer took an active role in the race for attorney general,injecting $200,000 into a political operation that was helping run Democratic Attorney General Mark Herring’s primary campaignagainst challenger Del. Jay Jones, D-Norfolk. Herring faces Del. Jason Miyares, R-Virginia Beach, in the general election.Dominion also gave $100,000 this summer to Hala Ayala, the Democratic nominee for lieutenant governor, who had previously promised not to take campaign money from the regulated utility. That was followed by more donations from Dominion to Ayala.
As state law requires steep emissions cuts, utilities face an urgent quandary: to build or not to build new gas pipelines? - The Boston Globe -After acquiring Columbia Gas of Massachusetts last year, Eversource reviewed the safety and reliability of its new pipelines and discovered what the utility considered a significant red flag: One community in western Springfield was uniquely vulnerable to a mishap or natural disaster, with 58,000 customers reliant on just one pipeline vital to warming their homes.Officials at Columbia Gas had been well aware of the vulnerability and spent years seeking to build backup pipelines in the area, but local protests against the proposals and other events stymied its plans.Now, Eversource is floating a similarly controversial project that would create one of the largest new pipelines in the state in recent years, a plan that could cost ratepayers as much as $33 million and perpetuate the use of a fossil fuel that a new state law aims to eliminate.
Locals Fear Health Risks After Suspected Oil Spill During Construction of Coney Island Ferry Landing --After Coney Islanders believe they spotted an oil sheen on the waters of Coney Island Creek, local residents and elected officials are once again asking various government agencies to look into the safety of the peninsula’s incoming ferry landing now that dredging has begun.“We are asking for a robust assessment from the city, the state and the federal government,” said Assembly Member Mathylde Frontus, who organized an October 13 press conference on the gruesome discovery. “We want them to monitor the air quality here that we are breathing, we want them to test this water and we want to know what are the effects of the dredging.”On October 5, two separate Coney Island residents took photos of what they believed were oil slicks on the creek at Kaiser Park, where the city’s Economic Development Corporation (EDC) is building a new ferry landing. The next day, Frontus gave those photos to the New York State Department of Environmental Conservation (DEC), the Environmental Protection Agency (EPA) and the Coast Guard. (The public can contact the state Department of Environmental Conservation Spills Hotline at 1-800-457-7632 to report any suspicious sediment.) and Coney Island residents raised their shared concern of the health impacts associated with the current construction of a ferry landing on Coney Island Creek. Photo by Jessica Parks“We had someone out here with a drone…There were oil sheens right where the construction rig was,” Ida Sanoff, the executive director of the National Resources Protective Association and a Coney Island resident, told the community. “On that same morning, a scientist who runs local educational programs down here took those pictures in this immediate area where the work was being done, also showing an oil spill.” Both DEC and the Coast Guard inspected the site on October 6 and 7, but their contradictory responses have raised alarm bells in the community. At the October 13 announcement, Frontus shared with the crowd a text message from a representative with the Coast Guard, who suspected the contamination was caused by dredging. Meanwhile, DEC has claimed otherwise, saying it could be from multiple sources.
Spire warns of potential natural gas shortage - — One of our region's main sources of natural gas may soon be shut off at the tap after the U.S. Supreme Court declined to issue a stay of the Spire STL Pipeline. The U.S. Court of Appeals unanimously voted that the 2018 approval of the 65-mile pipeline was unlawful, but Spire attorney Sean Jamieson wants to make one thing clear to customers. “The pipeline is still operating,” said Jamieson. While the Environmental Defense Fund argues the decision will protect ratepayers, Jamieson said that’s only the case if the pipeline stays online. “If this pipeline continues to operate the expectation is that there would be normalized gas prices for residents here in eastern Missouri,” said Jamieson. That’s why the Federal Energy Regulatory Commission gave Spire a 90-day emergency permit, but it expires Dec. 13. “There is a real risk for gas outages without this pipeline,” said Jamieson. In the past, 90% of natural gas in the St. Louis region came from the southern United States, and the Spire pipeline reduced that need, but unlike your thermostat, Jamieson said it can’t simply be turned back up. “When it was given up the market, other people who need access to that pipeline reserved that extra capacity,” said Jamieson. “Today, we can’t go back and get that capacity because it’s reserved by somebody else who needs it.” That’s why Jamieson believes it’s time for FERC to step in. “Keeping this infrastructure in service for this winter, at least through December is an emergency,” said Jamieson. In the meantime, he believes the federal agency should simply listen to the state utility commission. “The state utility commission, who is in the best position to decide the needs and to weigh the benefits and importance to eastern Missouri businesses and residents, has already made the conclusion that this pipeline is essential,” said Jamieson.
Northern Natural Gas seeks eminent domain over property-owner holdouts in Lincoln County - An Omaha-based natural gas company has negotiated easements with most landowners in its eastern South Dakota project area, including those it filed suit against in federal court. Northern Natural Gas Co. filed a condemnation suit against the owners of 19 tracts of land last month in Lincoln and Union counties, but since then, all but four have negotiated easements. The company's project includes abandoning 79 miles of pipeline and facilities that were installed in the 1940s and 1950s from South Sioux City to Sioux Falls. The old pipeline would be replaced with 82 miles of new pipeline as well as various above-ground facilities. But when some landowners didn't want to grant easements, the company filed condemnation suits, armed with the power of eminent domaine from the Federal Energy Regulatory Commission, which certified the project. The project started this spring and the company was seeking three types of easements for pipelines, pipeline facilities and temporary works space. The project was scheduled to be completed by Nov. 1, 2022, but when holdouts threatened to delay its completion, Northern Natural went to court. In a statement, company spokesman Mike Loeffler said that Northern has negotiated easements with 195 property owners in South Dakota and Nebraska, with only the four remaining. "Northern strongly favors good faith negotiations and will continue efforts to reach agreement with these landowners," Loeffler said. Clint Sargent, a lawyer who represents Norman French, a Lincoln County landowner who has not agreed to grant an easement to Northern, said he couldn't talk about the specifics of the case, because it involves ongoing litigation. French has two tracts of land on which Northern is seeking eminent domain. But generally, Sargent said, eminent domain cases involving projects with certification from the Federal Energy Regulatory Commission have more room for litigation. Unlike eminent domain under state laws that specify certain rights, FERC does not have the same specified laws, leaving more room to fight over the details.
US contracts for natural gas fall about 8%, ignoring a jump in prices in Europe (Reuters) – U.S. natural gas futures fell nearly 8 percent to a three-week low on Monday on forecasts of mild weather and ignoring a 10 percent jump in European gas prices after Russian gas giant Gazprom failed to secure additional fuel to Europe. In the past few weeks, US gas prices have risen to their highest levels since 2008 on expectations that record global gas prices will keep demand for US liquefied exports strong, while utilities in Europe and Asia are scrambling to refill stocks ahead of the winter heating season. But whatever the scale of the increase in global prices, US LNG export plants are already running near full capacity and won’t be able to produce more LNG until later this year. And US gas stocks, unlike those in Europe, provide more than enough fuel for the winter heating season. Analysts expect US gas stocks to exceed 3.5 trillion cubic feet by the start of the winter heating season in November, which they say will be a comfortable level although below the five-year average of 3.7 trillion cubic feet. In Europe, analysts say stocks are down 15 percent from their usual levels at this time of year. US gas contracts for November delivery ended the trading session down 42.1 cents, or 7.8%, to settle at 4.989 per million British thermal units, the lowest closing level since September 23. With gas prices near $36 per million British thermal units in Europe and $34 in Asia versus about $5 in the United States, traders say buyers around the world will continue to buy all the LNG the United States can produce.
Natural gas futures drop below $ 5 as mild weather prevails through early November – Natural gas futures extended their losses on Monday as cold weather remained largely absent from long-term forecasts. Despite rising global prices, the November Nymex gas futures contract plunged 42.1 cents to settle at $ 4.989 / MMBtu. December fell 36.4 cents to $ 5.236. Although it is still weeks away from winter, even brief puffs of cold air have been hard to come by. Weather patterns over the weekend shifted, but overall maintained a bearish outlook until early November. A brief cold front is expected to sweep the Great Lakes and the northeast next weekend, but temperatures are expected to warm up fairly quickly. “We suspected that there was more risk on the downside than on the upside, given a very poor climate and sufficient storage,” said Bespoke Weather Services. However, the magnitude of Monday’s price change was “a bit surprising”, according to the firm, given that there was no significant weather change from Friday. Additionally, “we’re still only in the middle of the third of October at this point in the game.” Certain global factors could have favored a rise in gas prices in the United States. European gas prices jumped on Monday after Russian gas giant Gazprom PJSC failed to book larger volumes at auction, saying November allocations reflect contract volumes. Without additional gas flows from Russia, the supply outlook in Europe remains worrying and likely means prices would need to rise even more than current levels in order to attract more liquefied natural gas (LNG) for the winter . “At least Gazprom should have obtained additional gas to sell in the spot market, most likely at a significant mark-up.” Yawger noted that the real problem is the Russian-built Nord Stream 2 pipeline that carries gas to Germany. The pipeline is already flowing and volumes are expected to increase as the system goes into service. However, significant regulatory hurdles remain for the ailing system. Chief among them is the need to comply with European Union rules requiring that ownership of transmission assets and natural gas supplies be separated. The rule could prove to be complicated for Gazprom’s integrated structure. “Russian President Putin has said that if Europeans want more gas, all they have to do is approve the pipe,” Yawger said. “Until that happens, expect European gas prices to remain at extremely high levels.” Despite the drama overseas, the offer on European gas prices did nothing to prevent Nymex futures from collapsing on Monday, with sales picking up after noon. The November contract fell to an intraday low of $ 4.962 before jumping a bit to settle not far above that level. Bespoke said it was still too early to fully detach from the situation in Europe, but each warmer week in the United States brings the market closer to such detachment. The lower 48 supplies are “just not at risk the way they are over there” unless an extremely cold winter with sustained cold. “In the absence of this, there is not much that global issues can have until we increase LNG export capacity,” Lovern said. In addition, the longer the hot weather lasts, the better the condition of the storage inventory in the United States will be when the cold air arrives.
U.S. natgas futures edge up on cooler midday forecast (Reuters) - U.S. natural gas futures edged up almost 2% on Wednesday on midday forecasts calling for cooler weather and higher heating demand over the next two weeks than previously expected. Traders noted that prices fell to a near four-week low earlier in the day on early forecasts calling for the weather to remain warmer than usual over the next two weeks. Even with the cooler midday forecast, however, the U.S. weather is still expected to remain a milder than normal through early November. Two weeks ago, U.S. gas prices soared to their highest since 2008 on expectations global competition for liquefied natural gas (LNG) would keep demand for U.S. exports strong. But after weeks of mild weather, U.S. prices dropped about 25% amid growing belief that the United States will have more than enough gas in storage for the winter heating season. Around the world, however, gas prices have soared to record highs as utilities scramble for more gas to refill dangerously low stockpiles in Europe and meet insatiable demand in Asia. High prices and energy shortages have already caused some industries to shut or curtail manufacturing activities in both regions. But no matter how high global prices rise, U.S. LNG export plants were already operating near full capacity and will not be able to produce much more LNG until later in the year. Analysts expect U.S. gas inventories will approach 3.6 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average. In Europe, analysts say stockpiles are about 15% below normal for this time of year. Front-month gas futures rose 8.2 cents, or 1.6%, to settle at $5.170 per million British thermal units (mmBtu). Data provider Refinitiv said output in the U.S. Lower 48 states rose to an average of 92.0 billion cubic feet per day (bcfd) so far in October, up from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. Weather forecaster AccuWeather said a beast of a bomb cyclone - similar to a strong hurricane - will take shape just off the Pacific Northwest this weekend. The storm will likely bring dangerous and damaging impacts up and down the West Coast, but the precipitation it will deliver to parts of the drought-parched West is greatly needed. Refinitiv projected average U.S. gas demand, including exports, would rise from 85.7 bcfd this week to 87.9 bcfd next week as more homes and businesses turn on their heaters with a seasonal cooling of the weather. Those forecasts were lower than Refinitiv expected on Tuesday. With gas prices near $32 per mmBtu in Europe and $35 in Asia, versus just $5 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce. Refinitiv said the amount of gas flowing to U.S. LNG export plants averaged 10.4 bcfd so far in October, the same as in September, but was expected to rise in coming weeks as more liquefaction trains exit maintenance outages. But the United States only has capacity to turn about 10.5 bcfd of gas into LNG.
U.S. natgas eases on big storage build, lower demand forecasts - (Reuters) - U.S. natural gas futures eased on Thursday on a slightly bigger-than-expected storage build, an easing of gas prices in Europe and forecasts for lower U.S. demand next week than previously expected. That price decline occurred despite forecasts for cooler weather and higher heating demand this week and record gas prices in Asia that will keep demand for U.S. liquefied natural gas (LNG) exports strong. Even with the cooler forecast, the U.S. weather was still expected to remain milder than normal through early November. The U.S. Energy Information Administration (EIA) said utilities added 92 billion cubic feet (bcf) of gas into storage during the week ended Oct. 15, the sixth week in a row that inventory builds were bigger than usual. That was a little higher than the 90-bcf build analysts forecast in a Reuters poll and compared with an increase of 49 bcf in the same week last year and a five-year (2016-2020) average increase of 69 bcf. Last week's injection boosted stockpiles to 3.461 trillion cubic feet (tcf), which would be 4.2% below the five-year average of 3.612 tcf for this time of year. Front-month gas futures fell 5.5 cents, or 1.1%, to settle at $5.115 per million British thermal units (mmBtu). Around the world, however, gas prices were still at or near record highs as utilities scramble for more fuel to refill dangerously low stockpiles in Europe and meet insatiable demand in Asia. High prices and energy shortages have already caused power cuts in Asia and some industries in both Europe and Asia to shut or curtail manufacturing activities. But no matter how high global gas prices rise, U.S. LNG export plants were already operating near full capacity and will not be able to produce much more LNG until later in the year. Data provider Refinitiv said output in the U.S. Lower 48 states has risen to an average of 92.0 billion cubic feet per day (bcfd) so far in October, up from 91.1 bcfd in September. Refinitiv projected average U.S. gas demand, including exports, would rise from 86.1 bcfd this week to 87.6 bcfd next week as more homes and businesses turn on their heaters due to seasonal cooling. With gas prices near $31 per mmBtu in Europe and $36 in Asia, versus just $5 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce. Refinitiv said the amount of gas flowing to U.S. LNG export plants has averaged 10.4 bcfd so far in October, the same as in September, but was expected to rise in coming weeks as more liquefaction trains exit maintenance outages. But the United States only has capacity to turn about 10.5 bcfd of gas into LNG.
-U.S. natgas up 3% on forecasts cooler weather will boost heating (Reuters) - U.S. natural gas futures climbed about 3% to a one-week high on Friday on forecasts for demand to rise as the weather turns seasonally cooler and on a slight increase in global gas prices that should keep demand for U.S. liquefied natural gas (LNG) strong. Even though the forecasts called for temperatures to decline with the approach of winter, those forecasts also predicted the weather would remain milder than normal through at least early November, keeping heating demand lower than usual for this time of year. Front-month gas futures rose 16.5 cents, or 3.2%, to settle at $5.280 per million British thermal units (mmBtu), their highest close since Oct. 15. For the week, however, the contract fell about 2%, putting it down for a third week in a row for the first time since March. In early October, U.S. gas prices soared to their highest level since 2008 on expectations global competition for LNG would keep demand for U.S. exports strong. But after weeks of mild weather, U.S. prices were down about 18% from that high amid a growing belief in the market that the United States will have more than enough gas in storage for the winter heating season. Analysts expect U.S. gas inventories will reach 3.6 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average. U.S. stockpiles were currently about 4% below the five-year (2016-2020) average for this time of year. In Europe, analysts say stockpiles were about 15% below normal. Around the world, however, gas prices were still at or near record highs as utilities scramble to refill dangerously low gas inventories in Europe and meet insatiable demand in Asia. Shortages of coal, gas and oil have already caused power blackouts in China and several businesses in Europe and Asia to shut or curtail manufacturing activities. With gas prices near $30 per mmBtu in Europe and $33 in Asia, versus just $5 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce.
Weekly Natural Gas Prices Extend Downward Slide Amid Benign Weather Conditions -- Weekly natural gas cash prices gave up ground amid mild temperatures and light demand across much of the Lower 48. NGI’s Weekly Spot Gas National Avg. for the October 18-22 period shed 38.5 cents to $4.850. That followed a 34.5-cent drop the previous week. Conditions were comfortable across most of the country for a majority of the trading week, particularly early on, with highs in the 70s as far north as the Dakotas and Minnesota on Monday and Tuesday. Spot prices tumbled each of the first two trading days of the week, extending losses from the prior week, as widespread highs of 60s to 80s dampened demand. Losses were also pronounced on the East and West coasts on Tuesday, with prices tumbling 50.0 cents or more at several locations that day. While cash regained some momentum as the week wore on amid sporadic weather systems, weekly prices finished the period in the red. As the trading week closed, Malin was down 38.5 cents to $5.070, while Algonquin Citygate was off 66.0 cents to $4.590 and Katy was down 41.5 cents to $4.810. Hampered by forecasts for benign weather, the November Nymex contract, while volatile, ultimately dipped lower for the week. It settled at $5.280/MMBtu on Friday, down 2.4% from the prior week’s finish. Forecasters anticipated continued modest demand in the week ahead. “We remain in a low demand regime, with any variability just able to bring demand closer to normal at times,” Bespoke Weather Services said. “The Pacific side of the pattern currently remains hostile toward any true cold air delivery into the U.S, though it grows less hostile as we reach early November,” suggesting a return to stronger demand next month. Futures plummeted more than 40.0 cents on Monday, led lower by the forecasts for protracted shoulder season weather. While futures struggled to fully recoup the steep early loss through the rest of the week, the downward pressure eased alongside expectations for strong demand this winter. With supplies depleted in Europe and parts of Asia, demand for U.S. exports of liquefied natural gas (LNG) held above 10 Bcf/d during the week and were expected to mount in coming weeks, providing some price support.
What Higher Gas Prices Mean for US Shale This Winter --We are heading into winter months with record high natural gas prices as strong demand recovery and unplanned supply outages have led to tighter markets. According to the International Energy Agency’s (IEA) latest gas market report, such tensions are a reminder that security of supply remains a major concern only a year after a record drop in demand left markets oversupplied.But what does this mean for the U.S. natural gas market? Last week, Natural Gas Supply Association (NGSA) Chairman David Attwood said he expects U.S. shale producers to be actively involved in the response to the highest natural gas prices in nearly a decade.“I firmly believe the market works,” Attwood told media following the release of NGSA’s Annual Winter Outlook. “There is no doubt the market is giving strong signals for production to increase. That supply is there and will come and meet the demand.”In its winter outlook, NGSA said it expects a “gradual production recovery” and increase in rig counts during the winter months to offset rising demand.On the supply side, the outlook expects an increase in production this winter, with the daily average up 4% or 3.7 billion cubic feet per day (Bcf/d) above last year winter, putting downward pressure on prices.“These are very interesting times in the gas market,” said Amber McCullagh, director of intelligence at Enverus, adding that September was the most volatile month in terms of gas prices in the post-shale era with the exception of cold winters“Right now, gas storage inventories are more than 200 Bcf below the 5-year average…Certainly the U.S. is in a better situation than Europe, but we don’t have a buffer in terms of average storage inventories like we did over the last 5 years,” McCullagh said, speaking at Enevrus’s natural gas outlook webinar last week.McCullagh also noted that gas prices are likely to stay elevated into 2022. If the winter is mild—which is unlikely—gas prices could dip into the mid $4/MMBtu range. However, in a cold winter scenario, prices could soar up to $10/MMBtu or higher. (Figure 1)
Gas utilities navigate energy transition while facing greater climate oversight | S&P Global Market Intelligence - Natural gas utilities in the U.S. are working to find their niche in the clean energy transition amid increasing scrutiny as national, state and federal regulators tackle emissions in the industry through new rules and stricter project reviews. For instance, utilities have announced at least 26 hydrogen pilot projects in the past year as the industry works out how to make and transport the gas, as well as help customers migrate to the low-carbon fuel. Subsidiaries of utility holding company Sempra lead the way with 12 projects, ahead of a number of other major utilities with one or two projects each, according to a review by S&P Global Market Intelligence. Most of the projects are in West and East Coast states with ambitious climate targets and more than half involve hydrogen production, particularly green hydrogen. Several projects also seek to understand hydrogen's impact on end-use appliances or explore using the fuel for power generation. Pilot projects ensure that "when we go to our regulators or other stakeholders to make a very large investment, we've got them familiar with this technology and the application of it," said Kim Heiting, senior vice president of operations and chief marketing officer at Oregon utility operator Northwest Natural Holding Co. The pilots will help utilities overcome challenges posed by the shift to hydrogen before they commit to hugely expensive full-scale rollouts. These pilots form gas utilities' contribution to larger efforts to curb climate change, both in the U.S. and globally. Recently, 24 countries decided to join the U.S. and the European Union in a Sept. 17 pledge to slash global methane emissions by at least 30% below 2020 levels by the end of the decade with the goal of limiting global warming to 1.5 degrees C, according to an Oct. 11 news release. Seven countries — Argentina, Ghana, Indonesia, Iraq, Italy, Mexico and the United Kingdom — had shown support for the pledge at the U.S.-led Major Economies Forum on Energy and Climate. With the 24 additional countries, nine of the top 20 methane emitters will now be part of the pledge, representing about a third of global methane emissions and about two-thirds of the world economy. Back in the U.S., Colorado regulators have set in motion an overhaul of natural gas utility regulations — advancing an ongoing inquiry into the gas grid's future in the state as policymakers work to meet ambitious climate goals. The Colorado Public Utilities Commission recently proposed substantial revisions to the state's gas utility regulations that aim to reduce the sector's greenhouse gas emissions and align infrastructure planning with statewide emissions reductions goals. (21R-0449G) The proposed rulemaking kicks off a yearlong process of soliciting feedback from gas distributors and other stakeholders. The outcome of that process stands to determine the trajectory of gas use in homes, workplaces and industrial facilities in Colorado, one of several states reviewing the fuel's role in a decarbonized future. The rulemaking also ties together several proceedings and "will be comprehensive and at the forefront of the evolution of the gas utility industry," the PUC said in an Oct. 1 filing.
BPPJ calls 60-day halt to nighttime fracking in urban areas – Oil and gas companies developing natural gas wells close to residential areas will have to hold off their nighttime fracking operations while parish officials tweak the noise ordinance. The Bossier Police Jury on Wednesday afternoon placed a 60-day moratorium on fracking between the hours of 10 p.m. and 7 a.m. It’s effective within 3,000 feet of platted subdivisions located within the jurisdiction of the Bossier City, Benton and Haughton metropolitan planning commissions. The moratorium will not impact oil and gas operations in the more rural areas of the parish. The move is in response to complaints from residents in a south Bossier neighborhood where noise from an oil and gas company’s fracking exceeded the parish noise ordinance, parish attorney Patrick Jackson said. Jackson called the company a “very good operator,” which did its best to comply with the ordinance. But it couldn’t. Noise studies are required, and one was done at the south Bossier site. “There were just some anomalies, and it didn’t prove out,” parish engineer Eric Hudson said. Like most parishes in northwest Louisiana, Bossier Parish worked with the Louisiana Oil and Gas Association during the initial development of the Haynesville Shale to put ordinances in place governing operations. Bossier’s noise ordinance was modeled after the city of Fort Worth that had years of experience with the Barnett Shale, Jackson said. So, Jackson is confident in Bossier’s laws regarding oil and gas related activities. But since more than a decade has passed, Jackson said changes are needed as the science surrounding fracking operations has changed.
EIA DPR: NatGas & Oil Production Slowly Increases Again in Nov. --Six of the seven largest shale plays in the U.S. will see a slight increase in both natural gas and oil production in November according to the latest monthly Drilling Productivity Report (DPR) issued by the U.S. Energy Information Administration (EIA). The Marcellus/Utica, collectively lumped together as “Appalachia” in the report, will see an estimated increase of 41 MMcf/d (million cubic feet per day) in production next month–something of a disappointment. The M-U’s chief rival, the Haynesville, will see explosive growth, an increase of 135 MMcf/d. The oil-based Permian will see an increase in natgas production of 78 MMcf/d. The increase in production for all major plays except the Anadarko (located mainly located in Oklahoma), is no mystery given the ongoing high price gas is now fetching. The cumulative increase across all plays is estimated to be 257 MMcf/d next month–roughly a quarter of a billion cubic feet. M-U gas production is forecast to hit 34.9 MMcf/d in October, still down compared to 35.6 MMcf/d last December, but we’re getting there. Be patient. Most of the increase in oil production will come in the Permian, estimated to add another 62,000 barrels of oil production per day in November. Given prices through the roof (nearly $83/bbl as of yesterday), you would think oil drilling would see explosive growth too. An additional 62,000 barrels per day added to the Permians current 4.826 million barrels per day is a relative drop in the drum. Our Three Favorite Charts Below are the three charts the EIA doesn’t include in the official PDF of the report (for whatever reason). We think these are the three best charts they issue each month. Below is the one chart we obsess over each month–our favorite chart produced by EIA. It shows estimates for total production in the coming month. We also like the following chart which shows drilled but uncompleted (DUC) numbers. Notice the story the chart below tells: New drilling in all plays has slowed down and producers are finishing already-drilled wells at a faster clip. Sooner or later we’ll run out of DUCs to complete.
Permian Oil Production Near Pre-Covid Record Numbers - Oil output in America’s most prolific shale patch is getting closer to levels seen before the pandemic-driven market crash, as crude prices surge. While total production in the U.S. is still lagging, the Permian Basin of West Texas and New Mexico is increasing output to an average of 4.826 million barrels a day in October, according to a U.S. government report Monday. That’s close to a revised 4.913 million barrel-a-day record set in March 2020, just before the pandemic unleashed widespread demand destruction globally, triggering production shutdowns and bankruptcies across the country. Production has been rising with benchmark U.S. crude prices now at seven-year highs, underpinned by a severe supply deficit. Oil futures in New York surpassed $80 a barrel this month for the first time since 2014. The Permian has low breakeven production costs, high rates of productivity, and so is best positioned to recover even though total U.S. crude production is still down. Private drillers in the basin have been seeking to capitalize on the surge in oil prices, ramping up volumes steadily, while public companies are under shareholder pressure to keep spending in check. In other shale plays, however, the recovery has been slow. The backlog of oil wells that have already been drilled and are waiting to be fracked, known as DUCs, has been shrinking since the middle of last year. In the Bakken of North Dakota, where the shale boom began, and in the Eagle Ford of southern Texas, the number of DUCs are at their lowest on record. Production in the Bakken is expected to be 26% short of its historical high, output in the Eagle Ford will be 37% below its record volume, according to data from the Department of Energy report on Monday.
Drilling and completion improvements support Permian Basin hydrocarbon production --The Permian Basin, which spans western Texas and eastern New Mexico, represents the most prolific hydrocarbon production region in the United States. They accounted for about 30% of U.S. crude oil production and 14% of U.S. natural gas production (measured as gross withdrawals) in 2020. Technology innovations, such as longer lateral wells and multi-well pad drilling, has helped reduce costs and increase productivity in developing oil and natural gas resources in the Permian Basin.The Delaware Basin and Midland Basin are parts of the greater Permian Basin and contain multiple stacked reservoirs. As of June 2021, the Delaware Basin had 17,450 producing wells and the Midland Basin had 27,540 producing wells, which have been installed since January 2011, according to data from Enverus. In June 2021,horizontal wells accounted for 84% of the producing wells in the Delaware Basin and 86% of the producing wells in the Midland Basin.Operators continue to drill longer horizontal segments, or laterals, for wells in the stacked reservoirs of the Delaware Basin and Midland Basin. The share of wells with 11,000-foot or longer lateral segments increased from less than 1% in 2014 to around 20% in 2021 across the entire Permian Basin. Currently, exploration and production companies operating in the Permian Basin are successfully testing laterals of more than 15,000 feet. In the first half of 2021, Midland wells averaged lateral lengths of 10,000 feet, while Delaware wells averaged lateral lengths of 8,700 feet. Although well lateral length is still increasing, proppant and fluid use has not changed significantly since 2017. Multi-well pad drilling allows multiple wells to be drilled from a single drill site, or pad. Drilling multiple wells from a single pad increases reservoir penetration with minimal surface disturbance, but it also poses challenges for well spacing optimization, the risk of wellbore collision during drilling, and production interference during simultaneous hydraulic fracturing. In the first half of 2021, 25% of pads in the Midland Basin and Delaware Basin contained at least nine wells, according to data from Enverus.
Oil Prices Could Explode As U.S.' Largest Storage Hub Nears Empty - Back in April 2020, the landlocked West Texas Intermediate crude oil price briefly crashed into negative territory - a stunning turn of events that cost traders massive losses - when the spot oil market found itself with an unprecedented glut as there was literally too much oil to be stored, and as such those traders who were assigned delivery would pay others just to take the physical oil off their hands. Well, in just a few weeks we may see the opposite scenario: no physical oil at all in the largest US commercial storage facility, leading to what may be a superspike in the price of oil. In a note predicting the near-term dynamics of the oil market, JPMorgan's commodity Natasha Kaneva writes that in a world of pervasive nat gas and coal shortages which are forcing the power sector to increasingly turn to oil (boosting demand by 750bkd during winter and drawing inventory by 2.1mmb/d in Nov and Dec), Cushing oil storage - which just dropped to 31.2mm barrels, the lowest since 2018... ... may be just weeks from being "effectively out of crude." The bank's conclusion: "if nothing were to change in the Cushing balance over the next two months, we might expect front WTI spreads to spike to record highs—a “super backwardation” scenario." Before we get into the meat of the note, first some background which as usual these days, begins with Europe's catastrophic handling of its energy needs. As JPM notes, the heating season of 2021/2022 is opening with record high global gas prices even as cold winter weather has yet to arrive. Such are the quirks of the natural gas market that, when/if cold winter arrives, demand for gas tends to outpace any source of supply. In the US alone, in a given week in winter, natural gas demand can surge by 50-70 bcf, if not more, with limited response from supply. The situation is so dire at the moment that - JPMorgan observes - "finding even 1 bcf of spare capacity is becoming increasingly difficult."
Michigan selected for new Coast Guard center to study freshwater oil spills -- Michigan has been chosen as the site of a new Coast Guard National Center of Expertise that will study the impact of freshwater oil spills with the aim of improving effective emergency responses.U.S. Sen. Gary Peters, D-Bloomfield Township, announced that the center will be located at two sites within Michigan: Lake Superior State University in Sault Ste. Marie, where its supervisor would be located, and another site at the Great Lakes Environmental Research Laboratory in Ann Arbor. Peters worked to designate $4.5 million in federal funding, including $3 million in the year-end spending package last year for the center after getting a bill passed to establish it. Former President Donald Trump signed the legislation in 2018.The legislation followed a hearing in 2017 where the then-commandant of the Coast Guard told Peters that the agency was not prepared for an oil spill in the Great Lakes, as existing technologies for responding to oil spills are designed for salt-water environments.Peters’ legislative language directed the center to be located at an institution that has aquatic research facilities and expertise in Great Lakes ecology. It also had to be near "critical" crude oil pipeline infrastructure "on and connecting the Great Lakes" such as submerged pipelines.The center is expected to focus on scientific or technological gaps in responses to past freshwater oil spills and will be tasked with testing, developing and researching equipment and techniques for responding to oil spills in the Great Lakes and training first responders.
Protesters enter Enbridge property, force shutdown of Straits oil pipeline -A group protesting the continued operation of Canadian oil transportation giant Enbridge's Line 5 pipelines in the Straits of Mackinac released videos on social media Tuesday showing its members entering Enbridge property and closing an emergency shutoff valve to temporarily stop the controversial pipelines' oil and natural gas liquids flows.Enbridge spokesman Ryan Duffy decried the action, stating it was illegal and put the protesters and others in danger. Members of the protester group contacted Enbridge to inform the company of what they were about to do Tuesday, and Duffy said Enbridge personnel shut down the pipeline's flows from its control center, "out of an abundance of caution to protect communities, first responders, and the protesters."Resist Line 3 Media Collective, a grassroots group that opposed construction of that connected Enbridge pipeline from western Canada to Superior, Wisconsin — and whose members were arrested by the hundreds at protests of that line — highlighted Tuesday's action in Michigan on the group's social media platforms. A group spokesman, who spoke on condition of anonymity, said the protest in Michigan was done by "autonomous people," adding, "The action is not directly affiliated with us; we are just hoping to amplify it."According to a news release from the Resist Line 3 group, a "Michigan Water Protector" closed the shutoff valve on the 68-year-old Line 5 pipeline "in accordance with Gov. Whitmer's order." Duffy said the valve shutdown occurred on a Lower Peninsula segment of the pipeline, in rural Tuscola County, near Vassar.Gov. Gretchen Whitmer announced last November she would be revoking Enbridge's 1954 easement from the state to use the lake bottom for its pipelines, citing "Enbridge’s persistent and incurable violations of the easement’s terms and conditions," and the potential dangers of an oil spill to Michigan's environment and economy.Enbridge in May continued to operate Line 5 in defiance of Whitmer's shutdown deadline, stating both publicly and in court that Michigan doesn't have the legal authority to regulate interstate oil and gas pipelines. Michigan is seeking to remand the federal case back to Michigan courts.The Canadian government earlier this month invoked a 1977 pipelines treaty with the U.S., seeking to halt U.S. District Court proceedings on a potential Line 5 shutdown and calling for bilateral negotiations between the two countries to resolve any disputes. A Twitter post from Release Line 3 quoted the valve turner as saying, "I know my life is in danger from the risk of a spill and from the contributions to climate change."
Protesters alone at Enbridge site for an hour due to delayed response -- Law enforcement officials did not arrive Tuesday at an Enbridge facility where protesters were tampering with a safety valve until all individuals had already left the scene — more than an hour after protesters notified police and the company of their plans.The demonstrators remained alone and unencumbered at an Enbridge valve facility in the thumb region Tuesday for at least an hour because of a law enforcement delay, according to the protesters' livestream of the event. During that time, a protester shimmied under the fence protecting the Tuscola County valve facility and used a plumber's wrench to turn a bolt he said would shut off the line. The work was accompanied by a live musician with a microphone and electric guitar. Enbridge said it shut the line down upon receiving the call to its emergency line. Even absent a call from protesters, the company's control center — which monitors the line 24/7 — would have registered any changes to valve status and been "alerted immediately," Enbridge spokesman Ryan Duffy said Wednesday.Protesters placed two calls at the start of their break-in at the Tuscola County Enbridge site: One to 911 at 12:06 p.m. Tuesday and a second almost immediately afterward to an Enbridge emergency line. Enbridge never called 911 after receiving the call to its emergency line that alerted the company to protesters' location and plans, according to the results of a public records request. The company, instead, maintains it called the sheriff department directly. The lone 911 call to Tuscola County dispatch regarding the threat against Line 5 Tuesday came from the protesters themselves who notified dispatchers that they intended to shut down Line 5. The protesters did not say where they were located and hung up as a dispatcher began to ask their location, leading law enforcement to scramble to determine which location was under threat. "There was confusion about where the call originated, was it even in the area," said Tuscola County Prosecutor Mark Reene. He said there also was "concern about what exactly was happening" and what sort of police resources might be needed to address the threat.
Coast Guard: California oil spill likely 25,000 gallons -(AP) — The amount of crude oil spilled in an offshore pipeline leak in Southern California is believed to be close to 25,000 gallons, or only about one-fifth of what officials initially feared, a Coast Guard official said Thursday. The leak off the coast of Orange County was previously estimated to be at least 25,000 gallons (94,635 liters) and no more than 132,000 gallons (499,674 liters). The final count for the spill will likely be closer to the lower figure, which correlates with the amount of oiling seen on the California shore, Coast Guard Capt. Rebecca Ore said Thursday. "We have a high degree of confidence that the spill amount is approximately 588 barrels," she told reporters. "That number may potentially adjust a small degree." Workers in protective gear continue to comb the sand for oil washing ashore. Roy Kim, an environmental scientist with California's Office of Spill Prevention and Response, said the size of tar balls being collected on coastal beaches has diminished from the early days after the spill. He said teams have been dispatched from Bolsa Chica State Beach in Huntington Beach to La Jolla in San Diego County. The spill off Huntington Beach was confirmed on Oct. 2, a day after residents reported a petroleum smell in the area. Coast Guard officials said it came from a pipeline owned by Houston-based Amplify Energy that shuttles crude from offshore platforms to the coast. Officials have said the cause remains under investigation, and they believe the pipeline was likely damaged by a ship's anchor several months to a year before it ruptured. Huntington city and state beaches as well as the shoreline in neighboring Newport Beach were shut down until Monday.
California Oil Spill Update: Dolphin Found Stranded On Cabrillo Beach – – The Unified Command provided an update on the Huntington Beach Oil Spill efforts Friday. While reports from trained officials and personnel claim that significant strides are being made, some concerning aftereffects have been found. The Pacific Marine Mammal Center was called to respond to reports of a stranded dolphin on Cabrillo Beach Thursday morning. The dolphin, a juvenile northern right whale dolphin, was humanely euthanized after what officials called a difficult decision. A necropsy completed shortly after found no oil inside nor outside of the dolphin, but continued investigation will look into the cause of death. Dozens of birds have died in the aftermath of the oil spill, while many have also been rescued and cleaned before returned to their habitat. Unified Command reports that of the 32 they’ve captured in the Costa Mesa area, 24 have been cleaned while eight have gone through rehabilitation for their release. Since October 5, no free-floating oil has been found on the surface of the water and all public beaches in Orange County, San Diego as well as most of Los Angeles are open. Tarball size has gradually reduced in size as days go by and they are more widely dispersed since the leak has been contained. Unified Command has reduced the use of overflights in recent days, focusing more on the use of smaller and more environmentally friendly drones to assess more sensitive areas, to reduce further environmental impact. While continued efforts are underway, Unified Command’s public health assessment unit will continue to run water and sediment sampling – reporting no abnormalities thus far. They will however conclude their testing of air have reached normal levels and are well within the common background levels.
Aging equipment, spills test ties between oil, California (AP) - Hoping to recover a lost anchor chain, a work boat dragged a grappling hook along the seabed near an oil platform off the Southern California coast. But it hooked something else -- a pipeline carrying crude oil from the towering rig to shore. Once snagged, the 197-foot (60-meter) boat dragged the pipeline until it snapped on one of the drilling platform's legs. The gushing oil created a slick that ran for miles along the Ventura County coast northwest of Los Angeles. The May 1991 accident provides a snapshot of the environmental dangers and trade-offs that come with the network of oil platforms and pipelines off Southern California's world-famous coastline. The uneasy relationship is being tested again after a leaking undersea pipeline off Huntington Beach fouled beaches and killed seabirds and fish this month. In the latest case, investigators believe it's likely a cargo ship's massive anchor struck and dragged the 16-inch (41- centimeter) pipeline up to a year ago. It's suspected the damage led to the pipeline cracking and spilling about 25,000 gallons (94,635 liters) of crude.The incident has renewed calls to end drilling in coastal waters and comes amid a societal reckoning over climate change and continued reliance on fossil fuels. It's also raising questions about the soundness of old equipment, limits on government safety oversight, how willing companies are to make needed investments in repairs and whether it makes sense to have drilling rigs and pipelines near one of the world's busiest port complexes.The latest spill involved a pipeline that serves a cluster of three oil platforms several miles off the coast, south of Los Angeles. Original owner Shell Oil began operating the "Beta Unit" in 1980 and anticipated the operation would last about 35 years, "at which time the platform and other offshore facilities will be removed and the wells sealed." They are now operating into a fourth decade.
California oil spill that shut down beaches was about 25,000 gallons – CNN - When crude oil leaked into the Pacific Ocean off the coast of Southern California earlier this month, the amount spilled was about 25,000 gallons, officials said Friday. "We have a high degree of confidence that the spill amount is approximately 588 barrels of oil," US Coast Guard spokesperson Amy Stork said. "This is consistent with NOAA scientific data, overflight observations and shoreline assessment team findings." The amount, equal to about 25,000 gallons, is more than five times lower than the previously estimated 131,000 gallons. The spill was caused by a leak in a pipeline operated by Houston-based Amplify Energy that is connected to an oil rig. Investigators believe the crack in the pipeline, which was likely caused by a ship's anchor dragging along the ocean floor, might have begun as long as a year ago. The California Department of Justice announced Monday that it is working with federal, state, and local authorities to determine the exact cause of the spill. Earlier this week, the city of Huntington Beach reopened its shoreline after water testing results came back with non-detectable amounts of oil-associated toxins in ocean water. On a website dedicated to the response to the spill, the city said water quality will be tested twice a week for at least two more weeks. The Oiled Wildlife Network reported that as of Thursday 84 birds were recovered, 53 of which were found dead. Fourteen dead fish were found, the group said. The pipeline was intact in October 2020 before it was deflected or deviated by 105 feet, eventually leading to damage to its casing and a 13-inch crack, Jason Neubauer, chief of the office of investigations and analysis for the US Coast Guard, said last week. Video released by the Coast Guard showed marine growth on the damaged portion of the pipeline, which was initially enclosed in concrete. Neubauer explained the linear fracture on the pipeline could have been a crack, which got gradually worse over time. "This event could be multiple incidents and strikes on the pipeline after the initial event, that we're pretty confident occurred several months to a year ago," Neubauer said.
FBI joins investigation into California oil spill - The FBI has joined the investigation into the oil spill off the coast of Orange County, which the Coast Guard said was much smaller than earlier estimates, officials said Thursday. Multiple state and federal investigative agencies are already examining whether any criminal violations occurred with the pipeline leak, which spilled into the waters off Huntington Beach nearly two weeks ago. Officials have not yet served any search warrants in connection with the investigation, Laura Eimiller, an FBI spokeswoman, said. Officials initially estimated as much as 144,000 gallons of oil was spilled into the ocean but later revised that number to between 24,696 and 131,000 gallons. On Thursday, U.S. Coast Guard Lt Cmdr. Scott Carr said the agency is confident the number of gallons leaked is around 25,000, based on scientific data and years of handling such spills. The Coast Guard’s criminal investigative unit, the California attorney general’s office and the Orange County district attorney’s office are all already conducting a criminal inquiry. The FBI is now assisting with the criminal investigation, which among other things is examining whether there was a negligent discharge of oil into navigable waters. An oil sheen was first spotted the evening of Oct. 2 by a vessel 4½ miles off Huntington Beach and then detected by the National Oceanic and Atmospheric Administration. A federal agency that oversees pipelines has already initiated an inquiry and requested documentation from Amplify Energy, the parent company of Beta Offshore, which operates the pipeline linked to platforms off the coast. But so far, no investigative agency has acknowledged serving search warrants or subpoenas on the oil company or any shipping company. At least two vessels that were near the pipeline Oct. 2 have been boarded by Coast Guard investigators to determine whether they could have been involved. Both have since been cleared.
Ship owner, operator of interest in California oil spill - -- The U.S. Coast Guard has designated the Mediterranean Shipping Company and others as parties of interest in an investigation into a vessel that was determined to be the source of an offshore pipeline leak in Southern California. Coast Guard and National Transportation Safety Board marine casualty investigators boarded a container ship, MSC DANIT, on Saturday in the Port of Long Beach that was involved in a January anchor-dragging incident discovered to be the source of the spill off Huntington Beach on Oct. 2, according to Lt. Cmdr. Braden Rostad. The designation announced in a statement on Saturday names ship operator Mediterranean Shipping Company S.A. and ship owner Dordellas Finance Corporation. It provides the owner and operator of MSC DANIT the opportunity to be represented by counsel, to examine and cross-examine witnesses and to call witnesses relevant to the investigation, the statement said. An investigation into the spill, which includes multiple pipeline scenarios and additional vessels, is ongoing.
Coast Guard says a ship's anchor dragged California oil pipeline that later leaked - Investigators believe a 1,200-foot cargo ship dragging anchor in rough seas caught an underwater oil pipeline and pulled it across the seafloor, months before a leak from the line fouled the Southern California coastline with crude. A team of federal investigators trying to chase down the cause of the spill boarded the Panama-registered MSC DANIT just hours after the massive ship arrived this weekend off the Port of Long Beach, the same area where the leak was discovered in early October. During a prior visit by the ship during a heavy storm in January, investigators believe its anchor dragged for an unknown distance before striking the 16-inch steel pipe, Coast Guard Lt. j.g. SondraKay Kneen said Sunday. The impact would have knocked an inch-thick concrete casing off the pipe and pulled it more than 100 feet, bending but not breaking the line, Kneen said. Still undetermined is whether the impact caused the October leak, or if the line was hit by something else at a later date or failed due to a preexisting problem, Kneen said. "We're still looking at multiple vessels and scenarios," she said. The Coast Guard on Saturday designated the owner and operator as parties of interest in its investigation into the spill, estimated to have released about 25,000 gallons of crude into the water, killing birds, fish and mammals. The accident just a few miles off Huntington Beach in Orange County fouled beaches and wetlands and led to temporary closures for cleanup work . While not as bad as initially feared, it has reignited the debate over offshore drilling in federal waters in the Pacific, where hundreds of miles of pipelines were installed decades ago. The DANIT's operator, MSC Mediterranean Shipping Company, is headquartered in Switzerland and has a fleet of 600 vessels and more than 100,000 workers, according to the company. MSC representatives did not immediately respond to email messages seeking comment. A security guard reached by telephone at the company's headquarters in Geneva said it was closed until Monday. The vessel's owner, identified by the Coast Guard as Dordellas Finance Corporation, could not be reached for comment. The DANIT arrived in Long Beach this weekend after voyaging from China, according to marine traffic monitoring websites. The investigation into what caused the spill could lead to criminal charges or civil penalties, but none have been announced yet, and Kneen said the probe could continue for months.
Coast Guard names "parties in interest" in anchor-dragging incident that damaged pipeline ahead of oil spill - CBS News -The Coast Guard on Saturday named both the owner and operator of a vessel as "parties in interest" believed to be connected to a massive oil spill along the southern California coastline earlier this month. Coast Guard Lieutenant (junior grade) SondraKay Kneen said Sunday that investigators believe a ship's anchor dragged for an unknown distance before striking an undersea pipeline in January. On Saturday, the Coast Guard designated the MSC Mediterranean Shipping Company, S.A. (MSC), the operator of the vessel, and Dordellas Finance Corporation, the owner of the vessel, as "parties in interest" to the marine casualty investigation. This designation means they have the opportunity to be represented by counsel to examine and cross-examine witnesses and to call relevant witnesses. The Coast Guard said in a statement that members of the Coast Guard and National Transportation Safety Board marine casualty investigators boarded the container ship MSC DANIT in the Port of Long Beach. Prior to Saturday's visit, Lieutenant Commander Braden Rostad, Chief of Investigations, Sector Los Angeles-Long Beach determined that the Mediterranean Shipping Company DANIT had dragged an anchor in proximity to a 16-inch steel pipeline during a heavy weather event that impacted the Ports of Los Angeles and Long Beach.The pipeline has been determined to be the source of the October 2, 2021 oil spill. The Coast Guard said last week that a ship's anchor likely hooked and damaged the underwater pipeline, which now has a linear 13-inch fracture. The last time the pipeline had been inspected was October 2020. Since then, it has been dragged more than 100 miles. About 26,000 gallons of crude oil is believed to have leaked into the Pacific Ocean near Huntington Beach. Beaches were closed in the area until last week, and more than four dozen animals, mostly birds and fish, have been found dead since the spill, though not all were visibly oiled, according to the Oiled Wildlife Care Network.
Regulators underestimated scope of California oil spill - LA Times -- Regulators scrutinizing plans for an oil pipeline off the Orange County coast in the 1970s examined the potential damage in the event of a ship anchor strike but downplayed the risks, concluding that a resulting spill would be minor, according to documents reviewed by The Times.Regulators predicted in 1978 that a leak would result in a spill of only 50 barrels of oil, records show. That’s less than a tenth of the minimum amount of oil that leaked in waters off the Orange County coast this month in an accident investigators believe was caused when a cargo ship waiting to enter the port dropped its anchor and hit the pipeline. Experts in oil pipeline construction now say the regulators badly underestimated the potential disaster from an anchor strike and missed an opportunity that might have prompted additional safeguards and prevented the major oil spill that fouled a long stretch of Orange County beaches.“Their presentations were fatally flawed…. In no scenario could you come up with 50 barrels,” said Richard Kuprewicz, the president of Accufacts Inc., who specializes in gas and liquid pipeline investigations. “If there was more frank discussion of what could possibly occur it probably would have initiated discussions on what actions to take, because the risks were severely understated.” Officials investigating the spill say an anchor probably snagged the pipeline at a point shortly after it starts its run on top of the seabed, weakening its structure and eventually causing a gash that spilled at least 588 barrels of oil. Investigators are homing in on ships that anchored in the area in January, when high winds could have caused a ship to drift and its anchor to drag across the line. A Times review of federal data shows that anchor strikes have caused pipeline ruptures that resulted in hazardous liquids spills only 17 times since 1986, but they sometimes caused devastating damage. A spill off the Texas coast in 1988 was more than 26 times the size of this month’s in California waters. Three years ago, a barge moving through the waters between the upper and lower peninsulas of Michigan accidentally dropped its anchor and dragged the 12,000-pound device along the lake bed, severing two of the six underwater cables that supply power to Michigan’s Upper Peninsula and damaging a third, spilling about 800 gallons of dielectric mineral oil, the National Transportation Safety Board found in a 2019 report. Officials estimated that the cost to repair the cables alone was $100 million. The anchor also struck and dented, but didn’t rupture, the controversial Line 5 pipeline, which carries oil from western to eastern Canada underneath the Great Lakes. Though anchor strikes are rare, severe weather is associated with their occurrence. Hurricanes in particular have wreaked havoc on underwater infrastructure, stirring up winds forceful enough to blow even large container ships off course, break the moorings of offshore platforms and leave both dragging heavy anchors across the seafloor.
Company behind O.C. oil spill received millions in federal relief - The energy company at the center of a massive oil spill off the Orange County coast has received roughly $31 million in federal relief since 2016, Rep. Katie Porter (D-Irvine) said during a congressional subcommittee hearing on Monday.Oil and gas companies pay royalties to the government in exchange for leases on federal property. The government sometimes reduces the amount of those royalties.Beta Offshore, a subsidiary of Amplify Energy, received a $20-million “end of life” royalty discount for two years starting in July 2016 because its wells were close to being tapped dry and were no longer producing as much oil, Porter said.The company operates the ruptured San Pedro Bay Pipeline, which sent an estimated 25,000 gallons of oil into the waters off Orange County this month.In June 2020, Beta Offshore received another royalty discount, this time because it planned to drill four new wells, Porter said.The “special case” discount granted by the Bureau of Safety and Environmental Enforcement will cut the company’s royalty payment by roughly $11 million on drilling operations off the Orange County coast through 2022.The discount would enable the company to generate additional revenue of about $7 million per year, Amplify officials have predicted.The company also received a $5.5-million Paycheck Protection Program loan in 2020 that was later forgiven.“These subsidies and so many others are reasons that oil wells like the ones behind this leak are still active,” Porter said. “Getting rid of the subsidies is the first step to get rid of the problem.”Monday’s hearing of the House Subcommittee on Energy and Mineral Resources and the Natural Resources Subcommittee on Oversight and Investigations was called to discuss the effects of this month’s oil spill on the environment and local economy.Porter said during the hearing that she received the information about the royalty relief from the Department of the Interior when she inquired about the type of subsidies Beta Offshore received from the federal government.Subsidies to fossil fuel producers are not uncommon, experts say.
California oil spill: cargo ship dragged pipeline months before spill -- Investigators believe a 1,200-foot cargo ship dragging anchor in rough seas caught an underwater oil pipeline and pulled it across the seafloor, months before a leak from the line fouled the Southern California coastline with crude.A team of federal investigators trying to chase down the cause of the spill boarded the Panama-registered MSC DANIT just hours after the massive ship arrived this weekend off the Port of Long Beach, the same area where the leak was discovered in early October.During a prior visit by the ship during a heavy storm in January, investigators believe its anchor dragged for an unknown distance before striking the 16-inch steel pipe, Coast Guard Lt. j.g. SondraKay Kneen said Sunday.The impact would have knocked an inch-thick concrete casing off the pipe and pulled it more than 100 feet , bending but not breaking the line, Kneen said.Still undetermined is whether the impact caused the October leak, or if the line was hit by something else at a later date or failed due to a preexisting problem, Kneen said.“We're still looking at multiple vessels and scenarios,” she said.The Coast Guard on Saturday designated the owner and operator as parties of interest in its investigation into the spill, estimated to have released about 25,000 gallons of crude into the water, killing birds, fish and mammals.The accident just a few miles off Los Angeles' Huntington Beach fouled beaches and wetlands and led to temporary closures for cleanup work . While not as bad as initially feared, it has reignited the debate over offshore drilling in federal waters in the Pacific, where hundreds of miles of pipelines were installed decades ago.The DANIT's operator, MSC Mediterranean Shipping Company, is headquartered in Switzerland and has a fleet of 600 vessels and more than 100,000 workers, according to the company. MSC representatives did not immediately respond to email messages seeking comment. The vessel's owner, identified by the Coast Guard as Dordellas Finance Corporation, could not be reached for comment. The DANIT arrived in Long Beach this weekend after voyaging from China, according to marine traffic monitoring websites. The investigation into what caused the spill could lead to criminal charges or civil penalties, but none have been announced yet, and Kneen said the probe could continue for months.
Officials hold hearing on Orange County oil spill | KTLA (news video) A congressional field hearing is being held in Irvine Monday to discuss the effects of a massive oil leak off the Orange County coast earlier this month. U.S. Reps. Katie Porter, Alan Lowenthal and Mike Levin are attending the hearing, which began at 9 a.m.The hearing comes two days after investigators from the U.S. Coast Guard boarded a cargo vessel in Long Beach that could be tied to the ruptured pipeline, which spilled an estimated 25,000 gallons of oil.Chris Wolfe and Christina Pascucci report for the KTLA 5 Morning News on Oct. 18, 2021.
Oil Spill Cleanup Progresses in Both Orange and San Diego Counties - Crews worked throughout the weekend to remove remaining tar balls and assess beaches for further treatment. Workers removed all boom in Orange and San Diego counties with the exception of Talbert Marsh. All public beaches in Orange County and San Diego County are open.“The amount of tar balls continue to decline and segments of beach are recommended for no further clean-up activities,” said Capt. Rebecca Ore, federal on-scene coordinator for the response. The Oiled Wildlife Care Network, in cooperation with the UC, released 10 animals after proper cleaning and rehabilitation.“Onshore seafood sampling has been conducted and offshore testing is expected to start on October 24. Data collected and subsequent analysis of those samples will be used to evaluate seafood safety for fisheries in the areas affected by the Southern California spill. The Director of California’s Department of Fish and Wildlife will reopen them upon recommendation by the CalEPA’s Office of Environmental Health Hazard Assessment,” said Lt. Christian Corbo, state on-scene coordinator for the response.Boat decontamination sites in Huntington Beach, Long Beach and Newport Beach continue to operate. For more information or to report located tar balls, visitwww.SoCalSpillResponse.com/tarballs. To report oiled wildlife, call 1-877-823-6926. The investigation regarding the cause of the spill continues:
New proposal would create California oil drilling buffers - — The Newsom administration on Thursday took the first step toward banning new oil and gas wells within 3,200 feet of homes, schools and healthcare facilities, and requiring emissions monitoring of existing wells within those buffer zones, a move urged by environmental and public health advocates who say the toxins, odors and hazards from oil fields disproportionately affect Latino and Black communities. The proposed state regulation is expected to affect more than 2 million residents who live within health and safety zones, as well as thousands of existing wells in the urban oil fields of Los Angeles County and in Kern County, the heart of California oil country. Still, the new restrictions would probably not go into effect until 2023 because of the state’s arduous process of crafting new regulations, and portions could be changed along the way. The proposal is expected to face an aggressive challenge from California’s billion-dollar oil industry. Gov. Gavin Newsom said the driving force behind the regulation is the public health risk linked to oil and gas production, with studies showing increased risks for cancer and adverse health effects for pregnant women and newborn babies, along with incidence of asthma and other ailments. “This is about public health, public safety, clean air, clean water,” Newsom said at a press conference at the Wilmington Boys & Girls Club, which neighbors one of many oil wells in Southern California. “This is about our kids and our grandkids and our future. A greener, cleaner, brighter, more resilient future is in our grasp.”
California moves to ban oil wells within 3,200 feet of homes and schools - California Gov. Gavin Newsom on Thursday proposed a statewide 3,200-foot buffer zone to separate homes, schools, hospitals and other populated areas from oil and gas wells. The draft rule, released by the state's oil regulator California Geologic Energy Management Division (CalGEM), would not ban existing wells within those areas but would require new pollution controls. California is the seventh-largest oil-producing state in the country but has no rule or standard for the distance that active wells need to be from communities. More than 2 million state residents live within 2,500 feet of an operational oil and gas well, and another 5 million, or 14% of the California's population, are within 1 mile, according to an analysis by the non-profit FracTracker Alliance. People who live near oil and gas drilling sites are at greater risk of preterm births, asthma, respiratory disease and cancer, research shows. Oil drilling disproportionately affects Black and Latino residents in major oil fields like Los Angeles County and Kern County. The new restrictions could take a couple years to go into effect and will likely face pushback from the state's oil and gas industry. The Western States Petroleum Association and the State Building and Construction Trades Council have opposed a statewide mandate to impose setbacks, arguing that buffer zones will raise fuel costs and harm workers. "Our reliance on fossil fuels has resulted in more kids getting asthma, more children born with birth defects, and more communities exposed to toxic, dangerous chemicals," Newsom said in a statement. "California is taking a significant step to protect the more than two million residents who live within a half-mile of oil drilling sites, many in low-income and communities of color." Environmental advocacy groups have long urged the governor to instate a 2,500-foot setback between fossil fuel operations and communities, as well as place an immediate moratorium on all new oil and gas permits in those zones. Legislation to ban fracking and instate a buffer zone failed this year in a state committee vote. Other oil producing states like Colorado, Pennsylvania and Texas have imposed some form of setback between properties and oil operations. If adopted, California's 3,200-foot setback would be the largest in the country. Newsom initially directed regulators to study buffer zones around oil wells in 2019, but they didn't meet the December 2020 deadline to release that information. "The largest statewide buffer zone in the country is a huge victory for frontline communities that have fought for health protections for years," Kassie Siegel, director of the Center for Biological Diversity's Climate Law Institute, said in a statement.
Enbridge fails to meet aquifer cleanup deadline - Enbridge has failed to meet the Oct. 15 deadline for cleaning up the site of an aquifer ruptured during construction of its controversial Line 3 oil pipeline, the Minnesota Department of Natural Resources (DNR) reported Friday. Meanwhile, the DNR is investigating two other sites where the company may have caused additional groundwater damage, the agency said in a statement. The DNR did not identify the locations of the other sites. State regulators will require compensation for the loss of groundwater during the additional time it takes to stop the groundwater flow, the DNR said. And Enbridge also will be held accountable for any other violations. While working on the pipeline in January, crews from the Calgary, Alberta-based Enbridge dug too deeply and punctured an artesian aquifer near Clearbrook, Minn. The damage caused the aquifer to leak at least 24 million gallons of groundwater, threatening to dry up a nearby rare and delicate wetland area called a calcareous fen. The DNR learned about the leak in June after independent construction monitors reported water pooling in the pipeline trench. On Sept. 16, the department ordered Enbridge to pay $3.32 million for failing to follow environmental laws. "Enbridge is fully cooperating with the Minnesota DNR in correcting uncontrolled groundwater flows at Clearbrook, and is working with the DNR as two other locations are being evaluated," company spokeswoman Juli Kellner said by e-mail Saturday. Kellner did not give the locations of the two other sites but stressed they are not at Clearbrook. Winona LaDuke, who heads the Honor the Earth Indigenous environmental group, called the company's failure to meet the deadline alarming. "If Enbridge can't meet basic safety requirements, they should not be allowed to operate a pipeline," she said. "This is a deep concern, that they can't fix a problem they made. It doesn't bode well for the future." Oil started flowing through the pipeline Oct. 1. Strongly opposed by environmental groups and some Ojibwe bands, the line carries a thick Canadian crude across northern Minnesota to the company's terminal in Superior, Wis. Under the DNR's order, Enbridge put $2.75 million into escrow for restoration and damage to the fen. Enbridge could recover some of the escrow deposit if remediation costs less — or pay more if costs run higher.
To Stop Line 3 Across Minnesota, an Indigenous Tribe Is Asserting the Legal Rights of Wild Rice - Late last month, Enbridge Energy announced that it had completed construction of its Line 3 oil pipeline replacement across Minnesota, despite strenuous opposition from Native American tribes and environmental activists. But a permit issued to Enbridge for construction of the pipeline is being challenged in the White Earth Nation tribal court, in an unconventional case that asserts the legal rights of Manoomin, or wild rice, to “exist, flourish, regenerate and evolve.” The plant, which “grows on water,” is the lead plaintiff in the case, joined by the White Earth Band of Ojibwe and others. The case is the first rights of nature enforcement action filed in a tribal court and is notable because the plaintiffs claim that acts taken by the state of Minnesota on non-reservation land have impinged on the rights of Manoomin, which are protected under a 2018 White Earth Nation tribal law. Rights of nature laws have taken root in more than 30 Indigenous and non-Indigenous communities across the country in, among other states, Ohio, Colorado, Pennsylvania and Minnesota. Globally, rights of nature legislation, judicial rulings and constitutional amendments have emerged in Canada, Mexico, Colombia, Bangladesh, Bolivia, India, New Zealand, Ecuador and Uganda, among other countries. Proponents of the laws argue that if non-human entities like corporations, trusts and governments have legal rights, elements of nature ought to have unique rights, too, with selected humans acting as their legal guardians. The proponents contend that current environmental protection law treats nature as human property that can be damaged and destroyed, which has resulted in an ecological crisis facing the planet. By giving nature legal rights, they say, humans can begin to change direction toward a more sustainable future. Doing so will require humans to change their relationship with the environment, the proponents say, moving away from exploiting it toward an interdependent relationship, in which humans come to see themselves as an intrinsic part of nature. Those ideas are rooted in Indigenous world views and the incorporation of rights of nature laws into western legal systems is seen by some advocates as a shift towards a more pluralistic legal system.
More oil trains will run through Minnesota, Twin Cities - A new Canadian railroad venture is sparking a significant increase of 15 to 20 oil trains that run through Minnesota each month. Canadian Pacific Railway's specialized new Canadian crude cargoes run on its main line, which bisects the Twin Cities. And the Canadian rail giant's recent deal to purchase a major U.S. railroad will likely make its new oil service even more appealing to shippers. Oil-by-rail has stoked safety concerns in Minnesota and elsewhere since 2013 when an oil train in Quebec caught fire and exploded, killing 47 people.Since then, several more oil trains in North America have derailed and spilled, some catching fire. Canadian Pacific declined to say how many of the new oil trains it's currently running. But during a conference call with analysts in July, the railroad's chief marketing officer said he expects "business to ramp up to 15 to 20 trains per month during the third quarter," which ended Sept. 30. Their destination: Port Arthur, Texas. Canadian Pacific and the company behind the new Alberta, Canada, rail venture, USD Partners, say they're using a new technology that makes shipping oil safe enough it need not be categorized as a flammable hazardous cargo. But the venture and USD's claims have some skeptics. "There are a lot of problems with this proposal and the complete lack of transparency around it," said Frank Hornstein, the Minneapolis DFLer who heads the Minnesota House's Transportation Finance and Policy Committee. Most Canadian crude bound for the United States — by far Canada's biggest oil export market — travels on pipelines, particularly Enbridge's corridor of six lines across Minnesota. Enbridge recently completed a $3 billion-plus pipeline to replace Line 3, which was corroding and able to operate only at 50% of capacity. One of Enbridge's arguments for the controversial pipeline was that without it, the number of oil trains in Minnesota would multiply, said Laura Triplett, a geology and environmental studies professor at Gustavus Adolphus College. "Now we are getting more trains anyway," she said.
Additional pipeline capacity from Canada to the United States could displace some crude oil by rail -- On October 1, 2021, the Enbridge Inc. Line 3 replacement pipeline became fully operational, delivering crude oil from Edmonton, Alberta, to Superior, Wisconsin. The pipeline’s start comes seven years after the announcement of the Line 3 replacement project, which was designed to restore the pipeline’s capacity to 760,000 barrels per day (b/d), from about half that amount, and improve its safety. Because the Line 3 replacement project increases the capacity for U.S. crude oil imports by pipeline from Canada, it could displace some crude oil currently shipped by rail. This change could increase Western Canada Select (WCS) crude oil prices and narrow the price spread between WCS and West Texas Intermediate (WTI), which has at times widened significantly as a result of a lack of pipeline capacity. In addition, the expanded capacity could facilitate the expected growth in Canada’s crude oil production through 2022.Enbridge’s Line 3 originally became operational in 1968 but, due to corrosion, transported decreasing amounts of crude oil over time. The replacement project was proposed in 2014, but litigation over the replacement pipeline’s approval,particularly in Minnesota, delayed its opening. Line 3, which along with Lines 1, 2B, and 4 make up Enbridge’s Mainline, spans 1,097 miles, with the U.S. replacement segment running 13 miles through the northeast corner of North Dakota, 337 miles through Minnesota, and 14 miles through Wisconsin (highlighted line in Figure 1).The Wisconsin and North Dakota portions of the project were completed in 2018 and 2020, respectively.The new line will increase pipeline import capacity into the U.S. Midwest and through to the Gulf Coast. From Superior, Wisconsin, one possible path of southern flows will be down Enbridge’s Line 6 and Mustang pipelines to Patoka, Illinois, where it can connect to several pipelines (not all pictured), including Marathon’s Capline pipeline when that project is completed, expected in early 2022. The Capline pipeline previously delivered 1.2 million b/d of mostly imported crude oil from St. James, Louisiana, north to Patoka, but has been idled for several years because domestic crude oil has displaced imports of light crude oil to the U.S. Gulf Coast. The pipeline is currently undergoing a reversal that will carry light crude oil produced in the Bakken region and heavy crude oil produced in Canada from Patoka to St. James. Another way to transport crude oil from Canada to the U.S. Gulf Coast is via the Flanagan South and Spearhead pipelines that extend from Pontiac, Illinois, to Cushing, Oklahoma. From Cushing, crude oil can flow to Gulf Coast refiners via several pipelines, including TC Energy’s Marketlinkpipeline and the Seaway pipeline.
Judge sides with company in royalties dispute with state (AP) — A judge has sided with a Houston-based energy company in a dispute with North Dakota involving oil and natural gas royalties, a decision that could affect several other drillers that allegedly owe the state millions of dollars in payments, the biggest portion of which is meant to support public education. Northwest District Court Judge Robin Schmidt’s ruling Wednesday stems from a lawsuit Newfield Exploration filed against the state after the Department of Trust Lands conducted an audit in 2016 that claimed the company was underpaying royalties to the agency that leases rights for grazing and oil, coal and gravel production from state lands. The agency manages several state trust funds including a fund that benefits public schools. Schmidt’s ruling follows a trial last week in Watford City. She wrote that the state’s claim of a breach of contract with the company was in question because the state failed to provide “any contract or lease ... that allows this court to meaningfully review the contract obligations and whether a breach has occurred.” The state Supreme Court sided with the Board of University and School Lands, referred to as the Land Board, two years ago in the debate that started with the lawsuit filed by Newfield in 2018 after the state determined that companies were taking improper deductions. The case was sent back to the lower court. Land Commissioner Jodi Smith said the five-member Land Board, led by Republican Gov. Doug Burgum, may decide at its next meeting on Oct. 28 whether to appeal the recent lower court decision to the state’s high court. North Dakota Petroleum Council President Ron Ness said Schmidt’s ruling has “huge ramifications” for the energy industry, and the more than two dozen operators that are in similar situation as Newfield.
North Dakota can claim pipeline policing costs as damages (AP) — North Dakota can continue to pursue reimbursement from the federal government of the millions of dollars spent policing protests against the Dakota Access oil pipeline, a judge has ruled.U.S. District Court Judge Daniel Traynor on Tuesday denied the federal government’s motion to dismiss North Dakota’s attempt to recover more than $38 million from the monthslong pipeline protests five years ago.The federal government argued North Dakota’s emergency response expenses are not “money damages” for “injury or loss of property.” Traynor, who is based in Bismarck and nominated for the judgeship by former President Donald Trump, ruled the state’s claim of damages is permissible. The state filed a lawsuit against the U.S. Army Corps of Engineers in 2019. North Dakota Attorney General Wayne Stenehjem has long argued that the Corps allowed and sometimes encouraged protesters to illegally camp without a federal permit. The Corps has said protesters weren’t evicted due to free speech reasons.
North Dakota on brink of more radioactive oil waste disposal options - North Dakota's oil industry could soon have a second option for disposing of radioactive waste within the state, and a regulator sees potential for more facilities. The North Dakota Industrial Commission recently permitted a second well slated for McKenzie County in which oil field waste would be mixed with saltwater into a slurry and injected deep underground. State Mineral Resources Director Lynn Helms anticipates the other three core Bakken counties -- Williams, Mountrail and Dunn -- could each have a well down the road. “That would round us out pretty well and put us in a situation where much of our TENORM waste could be dealt with very economically and dealt with here in-state in an extremely safe manner,” he said, using the acronym for technologically enhanced naturally occurring radioactive material. About 100,000 tons of radioactive oil field waste is produced in the state each year. Until the first slurry well started operating near Watford City in April, it was all trucked to other states for disposal in landfills or, more rarely, dumped illegally. North Dakota did not have any options for disposal within the state. The waste stems from soil, water and rocks that naturally contain low levels of radiation underground. When those materials are brought up to the earth’s surface during oil production, radiation can become concentrated in filter socks used to strain oil field fluids, in sludge at the bottom of storage tanks and in scale that forms in well pipes. The well recently approved by regulators still needs to secure a radioactive material license from the North Dakota Department of Environmental Quality to take in such waste. It’s slated to be built north of Alexander by a company called GMJS Services.
Biden administration lets stand a judgment thwarting Willow, a ConocoPhillips drilling project in Arctic - - Conservation groups are cheering the Biden administration’s decision not to appeal a judgment that reversed approval for Willow, the ConocoPhillips’ plan to develop five drilling sites in the National Petroleum Reserve-Alaska.U.S. District Court Judge Sharon Gleason ruled in August that the Trump administration didn’t adequately consider greenhouse gas emissions or the impact on polar bears when it approved the plan.The Biden administration initially defended the Willow approval, but Tuesday was the deadline for an appeal and the government didn’t file one. Nor did ConocoPhillips.Jeremy Lieb, an attorney in the Anchorage office of Earthjustice, said Willow doesn’t fit with the Biden administration’s climate goals.“We’re pleased to see that the administration has recognized that at this point and is not continuing to defend the plan in court on appeal,” he said.Willow is a big priority for U.S. Sen. Lisa Murkowski. The Biden administration’s initial defense of the project was seen as an overture to her, as she is one of the few Senate Republicans who might vote for some of Biden’s priorities.Interior Department spokeswoman Melissa Schwartz didn’t say why the government didn’t file an appeal.“The matter has now been remanded to the BLM,” she said in an email. “In light of the court’s decision, we are reviewing to determine next steps.”If the Bureau of Land Management decides to do another environmental review to comply with the judge’s order, environmental groups hope the agency scraps the project or imposes more restrictions.A ConocoPhillips spokeswoman says the company remains committed to the project.“ConocoPhillips is not appealing the court’s earlier decision because we believe the best path forward is to engage directly with the relevant agencies to address the matters described in the decision,” she said by email Thursday.
Quebec Premier Calls for Banning Hydrocarbon Production, LNG Exports -- Foreshadowed for years, French Canada said it plans to ban fossil fuel production by rejecting exploration and production development and liquefied natural gas (LNG) exports. “The government of Quebec has taken a decision to renounce, definitively, extraction of hydrocarbons in its territory,” said Premier Fancois Legault. He announced the move in an annual State of the Province address to the province’s National Assembly. Legault described the planned production prohibition as a recipe for prosperity in an emerging age of international consensus on preventing drastic climate change by cutting fossil fuel carbon emissions blamed for global warming. The premier predicted energy transition to electricity would grow government-owned Hydro Quebec’s zero-emission power dams as a supplier of Canadian markets and exporter to New England states and New York. “It is necessary to bet on our trump cards in profoundly transforming our economy,” said Legault. Hydro Quebec will not be the only winner, he added. Hydroelectric dams “enable us to attract investment because, in future, enterprises that want to produce goods without emitting greenhouse gases are going to find in Quebec an incomparable land of opportunity,” he said. Legault’s cabinet recently rejected the proposed Energie Saguenay terminal and Gazoduq pipeline for LNG exports. Quebec also played a role in the 2017 demise of TC Energy Corp.’s C$16 billion ($12.8 billion) Energy East plan for a cross-country oil pipeline. Quebec has no oil or gas output. A 2018 ban on hydraulic fracturing used in unconventional production ruled that the Utica Shale formation, which extends into the province, was off limits. The announced exclusion would stop short of ending large-scale Quebec oil and gas refining, distribution and retailing. No interference was announced against top Quebec investor-owned enterprises. They include 525,000-customer gas distributor Énergir, Valero Energy Co. and Suncor Energy Co. refineries with capacity for 372,000 b/d of oil. Also excluded would be the , Alimentation Couche-Tard Inc. parent company’s motor fuel and convenience store chain. Would-be explorer Ressources Utica, based in Quebec City, protested the announcement. Company President Mario Levesque said allowing production would “enrich Quebec and create high quality jobs while contributing to reducing the greenhouse gases associated with importing natural gas from the United States and Western Canada.” The firm had anticipated the prohibition decision by filing a lawsuit in August to seek compensation for losing supply development prospects in exploration and production authorizations granted by previous provincial administrations. The Quebec fossil fuel production prohibition would exclude oil and gas supply developers from a 594,896 square-mile jurisdiction. The region is estimated to be 2.2 times the size of Texas and 1.4% bigger than Alaska.
Keep it in the Ground: Québec declares end to fossil fuel extraction in province - Climate campaigners are welcoming Québec Premier François Legault’s Tuesday announcement that his government has decided to put an end to any further fossil fuel extraction in the province. “This is excellent news,” said Patrick Bonin, climate and energy campaigner at Greenpeace Canada, in a statement.Legault’s announcement—that the government “decided to definitively renounce the extraction of hydrocarbons on its territory”—came during the premier’s speech to a new parliamentary session in which he covered a range of topics from the healthcare system to “national cohesion” to a Covid-19 recovery plan.Calling the development “a wise decision,” Bonin added that the government “should not compensate oil and gas companies, which are largely responsible for the current climate crisis.”“Closing the door on fossil fuel extraction is a huge victory, made possible by relentless opposition from citizens to both shale gas and conventional oil and gas exploitation,” he added. “In Canada and around the world, the pressure to end the expansion of oil and gas production will only continue to grow.”Alice-Anne Simard, director general of Nature Québec, similarly said in a statement that the announcement was “thanks to the millions of people and hundreds of groups who mobilized for decades against oil and gas drilling.” “We will now work,” she added, “to ensure that this intention leads to the passage of strong legislation by the end of the parliamentary session.”“Canada and the other countries present at COP 26 should be inspired by the audacity of Québec,” he said, “and announce measures as ambitious as this one.”The province’s recent moves to reject the fossil fuel industry have already prompted legal action.According to reporting by The Globe and Mail last month, one suit was filed in August by Utica Resources, which is seeking “an unspecified amount” for lost profits. The company, according to the paper, “alleges the government acted illegally and with political motives in refusing the company’s application for an exploratory drilling license on the Galt project near the town of Gaspé.”That “legal salvo,” The Globe and Mail added, “underscores that governments around the world planning to leave their fossil-fuel resources in the ground risk battles with stakeholders as they pursue such policy shifts.”
Environmental groups applaud Quebec's ban on fossil fuel exploration - In a groundbreaking move, Quebec Premier François Legault announced the province will “definitively renounce the extraction of hydrocarbons on its territory” during a speech outlining his government's priorities in the National Assembly on Tuesday.The news comes just two weeks before the start of the COP26 UN climate talks in Glasgow, Scotland, and is being hailed by environmental activists as a bold new step toward reducing fossil fuel production.“Excellent news,” tweeted Geneviève Paul, executive director of the Centre québécois du droit de l'environnement. “We applaud the leadership of the Quebec government, and let's remember that this can be done without compensating the companies concerned.”“The Quebec government will end the extraction of oil and gas in the province,” Environmental Defence national climate program manager Dale Marshall wrote on Twitter. “Quebec has oil and gas reserves and companies have licences, so this is a big deal. What will the feds do to stop oil and gas expansion?”“Closing the door on fossil fuel extraction is a huge victory, made possible by relentless opposition from citizens to both shale gas and conventional oil and gas exploitation,” Greenpeace Canada climate campaigner Patrick Bonin said in a release. “In Canada and around the world, the pressure to end the expansion of oil and gas production will only continue to grow.”The ban on fossil fuel extraction comes after three oil and gascompanies sued the Quebec government over environmental laws preventing them from drilling on previously approved leases.Fossil fuel companies in Quebec have received permits in previous years to drill for oil and gas in the province, though no new permits have been issued since Legault took office, the Globe and Mail reports. Quebec is not known for fossil fuel extraction, but has the second-largest oil-refining capacity in the country after Alberta, with refineries that handle 20 per cent of all gasoline produced in Canada.
Offshore oil and gas regulator lays charges against Cenovus Energy for 2018 spill off Newfoundland - - Canada's offshore oil and gas regulator has laid three charges against a Cenovus Energy Inc. subsidiary stemming from a huge oil spill off the coast of Newfoundland in 2018. The Canada-Newfoundland and Labrador Offshore Petroleum Board says the charges against Husky Oil Operations Inc. include allegations that the company, taken over by Cenovus earlier this year, didn't move fast enough to stop work that could cause pollution, that it resumed work without ensuring it could be done safely, and that it violated a law that prohibits any spills in the offshore area. The leak of 250,000 litres of oil, water and gas from the SeaRose production vessel is considered the largest in the province's history. The spill in the White Rose oilfield, which sits about 350 kilometres off the coast of St. John's, N.L., happened while the company was preparing to restart production during a fierce storm. A Husky report said that an initial leak happened during a 20-minute stretch while crews were troubleshooting a drop in flowline pressure, and a retest led to a second release lasting about 15 minutes. The first court appearance for the charges is scheduled for Nov. 23 at Provincial Court in St. John's, NL.
Husky Energy charged over 2018 oil spill - Calgary-based Husky Energy, part of Cenovus, is facing three charges for a 250,000-litre oil spill in the White Rose field in the Atlantic Ocean, about 350 km southeast of St. John’s in Newfoundland.The industry regulator, Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has laid charges against Husky for allegedly not ensuring work that was likely to cause pollution ceased without delay, resuming work before ensuring it was safe to do so without pollution, and causing or permitting a spill in the offshore area.The largest oil spill in the history of Newfoundland and Labrador took place in November 2018 after a leak in a flowline to the SeaRose floating production, storage and offloading (FPSO) unit. The incident occurred while Husky was preparing to recommence production, which had previously been suspended due to bad weather.The first appearance is scheduled for November 23, 2021, at Provincial Court in St. John’s. The C-NLOPB said it would not be commenting any further since regulatory charges have been laid.
Mexico Moves To Seize American Assets -- Under cover of darkness, according to a person familiar with the matter, Mexican National Guard troops sealed the front gates of the Monterra Energy fuel terminal in Tuxpan, Veracruz, last month. The facility was closed by order of Mexico’s energy regulator. Monterra Energy is owned by the American global investment firm KKR. Its Tuxpan terminal stores gasoline imported from refineries on the U.S. Gulf Coast. The fuel is destined for service stations in Mexico, which are owned and operated by a variety of companies. According to the Mexican newspaper Reforma, the Tuxpan terminal is part of roughly $500 million that companies have invested in gasoline and diesel storage facilities in Mexico. This includes terminals run by IEnova, a subsidiary of San Diego-based Sempra Energy, and Indiana-based Bulkmatic. Reforma reports that both companies have had storage terminals closed recently by Mexican authorities. Monterra told me it has complied with all regulations but that the energy regulator isn’t answering its calls and the terminal remains closed.There’s trouble brewing between Mexico and the U.S., and I’m not talking about immigration. President Andrés Manuel López Obrador’s desire to put the state in full control of the energy industry, as it was in the 1970s, is running head-first into treaty obligations on trade and investment. The arbitrary closing of private gasoline-storage facilities is a fraction of the problem. Constitutional amendments proposed by AMLO, as the president is known, and sent to Congress for approval in a bill last month are labeled electricity reform. Yet while “reform” normally suggests improvement, this legislation, if passed, will take Mexico, and North American integration, backward.The bill modifies Articles 25, 27 and 28 of the Mexican Constitution. Article 27 would be amended to establish “that the strategic area of electricity belongs exclusively” to the state and consists “of generating, conducting, transforming, distributing and supplying electrical energy.”Private companies would still be allowed to operate under the new law, but they would have to sell to the state-owned federal electricity company, or CFE, which would set prices as a monopsony and would run a monopoly in selling to users. The CFE would be in charge of dispatching supply and guaranteed a minimum 54% of the market.
Offshore oil and gas regulator lays charges against Cenovus Energy for 2018 spill off Newfoundland - - Canada's offshore oil and gas regulator has laid three charges against a Cenovus Energy Inc. subsidiary stemming from a huge oil spill off the coast of Newfoundland in 2018. The Canada-Newfoundland and Labrador Offshore Petroleum Board says the charges against Husky Oil Operations Inc. include allegations that the company, taken over by Cenovus earlier this year, didn't move fast enough to stop work that could cause pollution, that it resumed work without ensuring it could be done safely, and that it violated a law that prohibits any spills in the offshore area. The leak of 250,000 litres of oil, water and gas from the SeaRose production vessel is considered the largest in the province's history. The spill in the White Rose oilfield, which sits about 350 kilometres off the coast of St. John's, N.L., happened while the company was preparing to restart production during a fierce storm. A Husky report said that an initial leak happened during a 20-minute stretch while crews were troubleshooting a drop in flowline pressure, and a retest led to a second release lasting about 15 minutes. The first court appearance for the charges is scheduled for Nov. 23 at Provincial Court in St. John's, NL.
Russia chooses not to raise natural gas supplies to Europe despite Putin's pledge to help - Russia has opted against sending more natural gas supplies to Europe, curbing hopes that Moscow may ease its grip on the market shortly after President Vladimir Putin said the country would be prepared to help.Highly anticipated auction results on Monday showed Russia's state gas giant Gazprom had not booked additional gas transit capacity for November either through the Ukrainian pipeline system or lines into western Europe via Poland. Gazprom booked only 30 million cubic meters per day on the Yamal-Europe route of 86.5 million cubic meters per day available for November, an amount comparable to that booked in September, and has not booked any volumes via Ukraine. The auction results are regarded as a key signal to the market of upcoming volumes because they take place two to three weeks prior to the month in which natural gas flows. Energy analysts say the results show Russia is in little hurry to boost supplies to the region and provides further evidence that the Kremlin is seeking to allow a smooth start-up of commercial flows via Nord Stream 2 — a contentious natural gas pipeline designed to deliver Russian gas directly to Germany via the Baltic Sea. It comes shortly after Putin had suggested the country could provide additional supply to Europe at a time when millions of households are facing soaring winter energy bills. Speaking to CNBC's Hadley Gamble at Russian Energy Week on Oct. 13, the Russian president also dismissed suggestions the country was using gas as a geopolitical weapon as "politically motivated blather." Offer of more gas 'conditional on Nord Stream 2' Russia is Europe's largest gas supplier, providing around 43% of the European Union's gas imports last year, according to data compiled by Eurostat. However, Russia's natural gas flows to Europe have been volatile since the end of September, adding to market anxiety and skyrocketing prices. EU lawmakers and the head of Ukraine's state energy company Naftogaz have previously accused Gazprom of deliberately withholding additional volumes of gas to Europe and deepening the region's energy crisis.
China Seeks Long-Term U.S. LNG Supply Amid Energy Crisis --Several Chinese energy giants have intensified discussions with U.S. liquefied natural gas (LNG) exporters to secure long-term supply deals in light of record spot prices in Asia, rising demand, and the specter of power shortages, Reutersreported on Friday, quoting industry sources.China and many other energy importers in Asia are scrambling to procure gas and coal supplies ahead of the winter amid a global energy crunch. The higher demand after the pandemic and the muted supply response have sent China’s coal futuresand Asia’s LNG spot prices to record highs in recent days.Threatened with power outages, China is now looking to secure long-term U.S. LNG supplies, despite the tense bilateral relations and the trade spat.Long-term deals would also protect buyers from spikes in spot LNG prices, which the market is seeing these days.According to Reuters’ sources, at least five major Chinese energy firms, including China National Offshore Oil Company (CNOOC) and Sinopec, are in advanced discussions for long-term LNG deliveries with American suppliers including Cheniere Energy and Venture Global.The talks between the Chinese and U.S. firms have intensified since the spot Asian LNG price hit $15 per million British thermal units (mmBtu) in August, setting a record for that time of the year.Spot prices have more than doubled since then as Asian buyers rush to stock up on gas ahead of the winter heating season. Last week, Asian LNG prices exceeded the psychological threshold of$50/mmBtu. The $56.326/mmBtu price of the Platts benchmark Japan Korea Marker (JKM) for November was an all-time high at which a cargo of LNG traded in the Asian market. This week, the average spot price of LNG for November delivery into Northeast Asia was at around $38.50/mmBtu, industry sources told Reuters on Friday. The average price for the week was $1.50/mmBtu higher compared to last week, amid firm demand from China.
EIA projects non-OECD Asia to become the largest importers of natural gas by 2050 --In our International Energy Outlook 2021 (IEO2021), we project that non-OECD countries in Asia will collectively become the largest importers of natural gas by 2050. In 2020, the countries of OECD Europe were collectively the largest importers of natural gas, followed by Japan and South Korea combined, and then non-OECD Asia, which includes China and India.All of these groups of countries import natural gas because their consumption exceeds their domestic supply. We project that continued economic growth in non-OECD Asia, led primarily by China and India, will more than double net imports of natural gas into the region by 2050. To meet the natural gas needs of these growing economies, we project that global natural gas production will increase steadily along with exports from the three largest natural gas producers: the United States, Russia, and the Middle East.In our IEO2021 Reference case, the United States, Russia, and the Middle East continue to expand natural gas production through 2050, and the United States remains the largest natural gas producer worldwide, producing almost 43 trillion cubic feet (Tcf) in 2050 compared with 34 Tcf in 2020. The United States, Russia, and the Middle East all have large proven reserves of both natural gas and oil as well as the processing and transportation infrastructure to support production increases. Liquefied natural gas (LNG) terminals and transportation vessels create an outlet for natural gas produced in the United States and the Middle East to reach markets in Asia and Europe.We project that Russia, in particular, will show the largest growth in net exports, more than doubling over the projection period to remain the largest net exporter of natural gas by 2050, at more than 14 Tcf. Close proximity to Europe and Asia will facilitate growth in Russia’s net natural gas exports through established pipeline infrastructure, potential future pipeline additions, and liquefied natural gas exports. During the next 10 years, we project that the United States will see its most rapid period of growth; net exports of U.S. natural gas nearly double as the United States expands its LNG infrastructure and produces natural gas at high volumes.
Nigeria's Delta attempts cleanup after decades of oil spills, gas flaring - Nigeria's Delta region was once an ecological paradise, rich with unique wildlife. But years of oil production have had a devastating impact on the area, with oil spills and gas flaring wreaking havoc on local communities and the landscape. Nigeria is Africa's largest oil producer and although it remains the country's biggest source of revenue, the biproducts of illegal oil exploration and a powerful oil industry continue to heavily impact local inhabitants. Oil spills have disfigured some of the local ecosystems and economies. Parts of the Delta region's landscape have been drenched in the ink-black slick of oil waste, which has led to the disappearance of wildlife, vegetation and fish, as well as the contamination of water bodies. Gas flares, an old and wasteful practice of burning off the natural gas associated with oil extraction, as well as the oil spills, are contributing to climate change. Both have had a highly destructive impact on the livelihoods of local communities. Fish farmer Christiana Eluozu, 68, is one of two million Nigerians living within 4km of a gas flare. She has lived in her village of Idu for over 40 years, but said for the last three years she hasn't been able to catch any fish due to the gas flare nearby. "Whenever it rains the river water becomes thick and very dark, so that when we cast our net there has been no fish these past years," Eluozo said. An area that was once populated by wildlife including elephants, antelope, leopards and buffalos, is now sparse and barren. "You can see the gas has damaged the roof of my house, everywhere is black - you can see - because of the dark rain" Eluozo said, looking up at the crater in her broken roof. In 2020, thousands of gas flares at oil production sites worldwide burned an estimated 142 billion cubic meters of gas according to the World Bank (World Bank's Global Gas Flaring Reduction Partnership). Remedial work Each cubic meter of associated gas flared results in about 2.5 kilograms of CO2 equivalent emissions, it is about 400 million tons of CO2 equivalent emissions annually. The Nigerian government has promised to end gas flaring by 2030. A cleanup operation of the region's River State was launched by the government in 2019. Despite criticism of the operation, with reports that three years on residents still do not have access to proper drinking water, Nigeria's Environmental Ministry insists that the government is making headway.
One Bank Crunches The Numbers On Oil Supply/Demand Dynamics, Reaches A Shocking Conclusion -With oil prices surging amid a broader global energy crisis, many are hoping that this particular price spike is truly transitory as incremental supply - whether from OPEC+ or shale - kicks in and resets the market lower. But maybe not so fast: as Morgan Stanley's chief commodity strategist Martijn Rats writes, on current trends, global oil supply is likely to peak even earlier than demand. And as prices search for the level at which demand erosion kicks in, he is increasing his Q1 2022 Brent forecast to $95/bbl, while also lifting his long-term forecast from $60 to $70/bbl.As hinted by the bold text above, the note from the Morgan Stanley commodity strategist (available to pro zero hedge subs in the usual place) focuses on arguably the two key drivers in the oil market: peak demand and peak supply. As Rats explains, while tThe planet puts boundaries on the amount of carbon that can safely be emitted - and therefore, oil consumption needs to peak - this is such a well-telegraphed prospect that it has solicited its own counter-response already:low investment (especially in conjunction with ESG pressures to curb fossil fuels). The question has therefore become: which will actually peak first? Supply? Or demand?According to MS, the second scenario would materialize if demand were to decline very sharply, say along the trajectory of the IEA’s ‘Net Zero by 2050’ study. This assumes that oil demand falls by ~29% between 2019 and 2030, driven by technological improvements, a change in end-user behaviour and other factors (recent event have shown just how much of a pipe dream this is). The sum of all oil future oil demand in this scenario amounts to ~700-900 bn barrels, roughly half the estimate of proved oil reserves in the BP Statistical Review of World Energy of 1.7 trillion barrels.As the window of opportunity to monetize these resources closes, this could incentivize the major producing countries to increase output quickly,unleashing competition for market share. As shown in the next chart, most OPEC countries have a much greater share of the world’s oil reserves than of the world’s oil production. Therefore, their the need to take market share could be especially strong.
Oil Prices Pull Back as U.S. Factory Data Intensifies Demand Concerns (Reuters) -Oil prices pulled back after touching multi-year highs on Monday, trading mixed as U.S. industrial output for September fell, tempering early enthusiasm about demand. Production at U.S. factories fell by the most in seven months in September as an ongoing global shortage of semiconductors depressed motor vehicle output, further evidence that supply constraints were hampering economic growth. “The oil market started off with a lot of exuberance, but weak data on U.S. industrial production caused people to lose confidence in demand, and China released data that intensified those worries,” Brent crude oil futures were down 62 cents or 0.7% at $82.26 a barrel by 2:30 p.m. EST (18:30 GMT) after hitting $86.04, their highest since October 2018. U.S. West Texas Intermediate (WTI) crude were 12 cents higher, or 0.1%, at $82.40 a barrel, after hitting $83.87, their highest since October 2014. Both contracts rose by at least 3% last week. Weaker industrial data was compounded by rising production expectations on Monday, further weighing on market sentiment. U.S. production from shale basins is expected to rise in November, according to a monthly U.S. report on Monday. Oil output from the Permian basin of Texas and New Mexico was expected to rise 62,000 barrels per day (bpd) to 4.8 million bpd next month, the Energy Information Administration said in its drilling productivity report. Total oil output from seven major shale formations was expected to rise 76,000 bpd to 8.29 million bpd in the month. The early push higher on Monday came as market participants looked to easing restrictions after the COVID-19 pandemic and a colder winter in the northern hemisphere to boost demand. “Easing restrictions around the world are likely to help the recovery in fuel consumption,” analysts at ANZ Bank said in a note, adding gas-to-oil switching for power generation alone could boost demand by as much as 450,000 barrels per day in the fourth quarter. Cold temperatures in the northern hemisphere are also expected to worsen an oil supply deficit,
Crude Up But Paired Gains After US Industrial Weakness Reported - Rigzone - Oil paired gains on Monday as U.S. industrial production fell below expectations in September. Oil eased off of multiyear highs with U.S. industrial data showing signs of weakness while traders assessed an ongoing natural gas crisis. Futures in New York closed 0.2% higher on Monday. U.S. September industrial production fell 1.3%, below estimates. Still, a shortage of natural gas is creating extra demand for oil products like fuel oil and diesel from the power generation sector, keeping oil prices propped up. Plus, the OPEC+ alliance is still only adding incremental, monthly supplies, and some members aren’t expected to meet current output targets. “If these negative trends continue, it implies that industrial demand for energy may be weaker than expected in the future,” said Bart Melek, head of commodity strategy at TD Securities. Both the U.S. and global benchmark crudes are trading above $80 a barrel as shortages of natural gas and coal have driven rising demand for alternative power generation and heating fuels in Asia and Europe ahead of the winter. Brent futures earlier hit the highest intraday level since 2018, while West Texas Intermediate crude neared a seven-year high. Meanwhile, OPEC and its allies once again failed to pump enough oil to meet their output targets, exacerbating the supply deficit as the world recovers from the pandemic. The group cut its production 15% deeper than planned in September, compared with 16% in August and 9% in July. This reflects the inability of some members -- including Angola, Nigeria and Azerbaijan -- to raise output to agreed volumes due to a lack of investment, exploration and other issues. West Texas Intermediate crude for November delivery rose 16 cents to settle at $82.44 a barrel in New York after earlier hitting $83.87 a barrel, the highest intraday level since October 2014. Brent for December settlement dropped 53 cents to end the session at $84.33 a barrel. Gazprom PSJC, Europe’s biggest natural gas supplier, doesn’t plan to send more gas via key transit routes through Ukraine next month, according to the results of several auctions on Monday. This comes after Russian President Vladamir Putin said that the country was ready to deliver all the natural gas Europe needed, using the energy crisis to capitalize on the country’s position as a natural gas supplier.
U.S. oil, natural-gas prices settle higher as traders weigh news on Russian natural-gas supplies -- U.S. crude-oil futures climbed on Tuesday to log another settlement at their highest in about seven years, and natural-gas prices finished higher, reclaiming the $5 level after losing nearly 8% on Monday. Russia indicated that it may not provide additional natural gas to European consumers amid an energy crunch in the region, unless it gets regulatory approval to start shipments through the Nord Stream 2 pipeline, Bloomberg reported Tuesday. Renewed worries about natural-gas supplies likely fed expectations that the energy market would need to boost demand for oil, analysts said. It looks like Russia may not increase natural gas shipments to Europe, said Phil Flynn, senior market analyst at The Price Futures Group. The Russians are "in no hurry whatsoever to comply" with demands from the European Union, he said. West Texas Intermediate crude for November delivery rose 52 cents, or 0.6%, to settle at $82.96 a barrel on the New York Mercantile Exchange, the highest finish for a front-month contract since Oct. 13, 2014, according to FactSet data. November natural gas added 10 cents, or 2%, to settle at $5.088 per million British thermal units after losing 7.8% on Monday.
Oil remains near multiyear highs as energy crunch continues - Oil futures rose on Tuesday and were near multiyear highs as an energy supply crunch continued across the globe, while falling temperatures in China revived concerns over whether the world’s biggest energy consumer can meet domestic heating needs. The Brent crude benchmark rose 75 cents to settle at $85.08 a barrel. U.S. West Texas Intermediate (WTI) futures rose 52 cents to settle at $82.96 a barrel. Prices have been climbing the last two months. Since the start of September, Brent has risen by about 19%, while WTI has gained around 21%. “Supply-demand balances show that the market is experiencing a supply deficit, which is spurring deep inventory draws and driving prices upwards,” said Louise Dickson, senior oil markets analyst at Rystad Energy. “This market tightness is expected to extend into most of 2022, and crude oil demand will only catch up with crude supply by the fourth quarter of next year.” With temperatures falling as the Northern Hemisphere winter approaches and heating demand increasing, prices of oil, coal and natural gas are likely to remain elevated, traders and analysts said. Colder weather already has started to grip China, with close to freezing temperatures forecast for northern areas, according to AccuWeather.com. The rising coal and natural gas prices in Asia are expected to cause some end-users to switch to lower-cost oil as an alternative. However, the power crunch that is sending prices higher is also hurting Chinese economic growth, which fell to its lowest level in a year, official data showed on Monday. China’s daily crude oil processing rate also fell last month, dropping to the lowest level since May of last year. In Brazil, state-run oil company Petrobras confirmed it will not be able to meet “atypical demand” from fuel distributors in November that has surpassed its production capacity, raising fears of supply shortages in the country.
WTI Holds Gains After 4th Straight Weekly Crude Build, Product Draws - Oil prices managed to hold on to gains today as supply concerns continued and falling temperatures in China revived concerns over whether the world's biggest energy consumer can meet domestic heating needs (and Russia suggesting that it may not provide additional natural gas to European consumers amid an energy crunch in the region didn't help the bear case across the energy complex). The global benchmark Brent closed above $85 a barrel for the first time since October 2018.“Crude price volatility is here to stay as demand uncertainty remains elevated over the short-term,” said Ed Moya, senior market analyst at Oanda Corp.“There is a lot of noise in all this morning’s headlines, but given the relentless winning streak, oil prices are ripe for significant rounds of profit-taking.”U.S. crude stockpiles likely rose last week (for the 4th straight week), while distillate and gasoline stocks were expected to fall according to Reuters' survey. API
- Crude +3.294mm (+2.25mm exp)
- Cushing -2.5mm
- Gasoline -3.5mm (-2.2mm exp)
- Distillates -3.0mm (-2.4mm exp)
Crude inventories rose for the 4th straight week (slightly more than expected)...WTI traded up to just below $83 intraday but was hovering around $82.25 ahead of the print and inched higher despite the crude build as product draws dominated.
Oil Futures Down on Large Crude Build, Slowing Growth Outlook -- In pre-inventory trade Wednesday, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange shifted lower after preliminary data from the American Petroleum Institute showed a much larger-than-expected build in domestic crude oil inventories. Adding pressure is myriad economic indicators from major global economies suggesting sharply decelerating growth in the fourth quarter to rising commodity prices and shortages of labor. U.S. commercial crude oil inventories increased 3.294 million barrels (bbl) in the week ended Oct. 15, according to the data published by API, well above calls for an increase of 700,000 bbl. Should the build be confirmed in the U.S. Energy Information Administration report due out 10:30 a.m. ET, this would mark the fourth consecutive weekly increase in domestic crude oil inventories since mid-September. API also showed stocks at the Cushing, Oklahoma hub fell 2.5 million bbl. API reported gasoline stockpiles declined 3.5 million bbl in the week reviewed, more than three times estimates for 1.1 million bbl draw, while distillate inventories dropped 3.0 million bbl, more than three times an expected decline of 900,000 bbl. DTN Refined Fuel data for the week ended Oct. 8 showed demand for motor gasoline in the U.S. decreased 0.1% in the reviewed week and diesel consumption declined 1.0%. EIA data for the same week showed total domestic gasoline demand down 2.7% compared to the same week in 2019 and weakening seasonally after being down 1.6% from 2019 levels in the prior week. Diesel demand was up 5.2% relative to the same week in 2019, weakening after being up 5.9% compared to 2019 levels. Near 8:30 a.m. ET, NYMEX West Texas Intermediate futures for November delivery fell $0.85 to $82.11 bbl ahead of expiration Wednesday afternoon, and next-month delivery December WTI narrowed its discount to $0.56 bbl. The December ICE Brent futures dropped below $85 bbl in overnight trade to $84.29 bbl. November RBOB futures on NYMEX fell 2.45 cents to $2.4510 gallon, and front-month ULSD futures declined 2.65 cents to $2.5342 gallon. The oil complex also came under selling pressure from the International Monetary Fund's downward revision Tuesday to Asia's global growth estimate. IMF trimmed its Asia's outlook by 1.1% this year to 6.5%, citing supply chain issues and growing tally in new COVID-19 infections.
Oil Prices Dip As China Considers Market Intervention - Oil prices dropped early on Wednesday after China said it was considering an intervention on the domestic coal market to reduce the record prices down to a “reasonable range.” As of 7:56 a.m. EDT on Wednesday, before the weekly EIA inventory report, WTI Crude prices were down 1.11% at $82.04, and Brent Crude was trading down by 0.96% to $84.26. Oil prices continued to fall from the multi-year highs reached early this past Monday, when WTI Crude hit the highest level since October 2014 at $83.73, and theinternational benchmark briefly jumped above $86 per barrel at $86.04, which was the highest price since October 2018.The key trigger of the price retreat early on Wednesday came from China, where the National Development and Reform Commission (NDRC) said that the government wasconsidering an intervention to reduce the price of coal whose recent “increase has completely deviated from the fundamentals of supply and demand.“The heating season is approaching and the price is still showing a further irrational upward trend,” Reuters quoted the commission as saying.The possible Chinese intervention sent the key Chinese coal futures plunging early on Wednesday. On Tuesday, the most actively traded coal futures in China had hit a fresh record-high after the energy crisis worsened because of colder weather in recent days.A Chinese intervention to bring coal prices down could “reverse the fuel switch to oil,” analysts at Commerzbank told Reuters.Oil prices were also weighed down by profit-taking and a fourth straight week ofU.S. crude oilinventory builds as estimated on Tuesday by the American Petroleum Institute (API). The build last week was estimated at 3.294 million barrels, above analyst expectations of a 2.233-million-barrel build. Still, the API report was not entirely bearish for market sentiment because gasoline and distillate inventories, as well as crude stocks at the Cushing hub, were estimated to have dropped last week.
WTI Spikes Into Green After Across-The-Board Inventory Draws - Oil prices are lower this morning after API reported a bigger than expected crude build (admittedly offset by considerable draws at Cushing and in products) and China reportedly readies itself to unleash measures aimed at stabilizing its power supplies for the winter.“The heating season is approaching and the price is still showing a further irrational upward trend,” Reuters quoted the commission as saying. A Chinese intervention to bring coal prices down could “reverse the fuel switch to oil,” analysts at Commerzbank told Reuters.“Crude price volatility is here to stay as demand uncertainty remains elevated over the short-term,” said Ed Moya, senior market analyst at Oanda Corp.“There is a lot of noise in all this morning’s headlines, but given the relentless winning streak, oil prices are ripe for significant rounds of profit-taking.”But all algo eyes will be on crude stocks to see if the official data confirms the big build from API. DOE
- Crude -431k (+2.25mm exp)
- Cushing -2.32mm
- Gasoline -5.368mm (-2.2mm exp)
- Distillates -3.913mm (-2.4mm exp) - biggest draw since March 2021
Despite a notable build reported by API, official data confirms a modest crude draw of 431k barrels last week with major draws at Cushing and in gasoline and distillates...
Oil prices hit seven-year high on surprise drop in U.S. stockpiles -- Oil reversed its early course to settle higher after an EIA report showed a decline in US crude inventories. Oil hit a fresh high after a U.S. government report showed an unexpected drop in crude stockpiles, allaying concerns that higher prices would blunt demand. Futures in New York rose 1.3% to a fresh seven-year high, after earlier falling as much as 1.2% on Wednesday. Domestic crude inventories fell 431,000 barrels last week, according to an Energy Information Administration report. The industry-funded American Petroleum Institute reported a 3.29 million-barrel weekly gain on Tuesday. “This is just a sign of an economic recovery that continues and the essential nature of crude oil-related products and the role they play in this recovery,” said Rob Thummel, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “The concerns about demand destruction really aren’t evident.” Oil has rallied as an energy crunch -- prompted by coal and natural gas shortages -- coincided with rebounding demand from economies recovering from the pandemic. Wall Street has been steadily upping its estimates for oil prices in recent weeks. BNP Paribas was the latest bank to do so, raising its forecast by $8 a barrel to $80.50 a barrel. The U.S. report also showed strong draws from refined-product inventories with distillate and gasoline demand rising despite higher consumer prices. Gasoline inventories fell 5.37 million barrels to the lowest since November 2019. Measured by the four-week average, gasoline demand is at the highest since 2007 for this time of year. Prices: West Texas Intermediate for November delivery, which expires Wednesday, rose 91 cents to $83.87 a barrel in New York. The more active December contract rose 98 cents to $83.42 a barrel. Brent for December settlement rose 74 cents to $85.82 a barrel. Elsewhere, China is studying ways to intervene in the coal market to reign in rising prices that are threatening energy security and economic growth. The nation’s energy watchdog hosted a Tuesday meeting with refiners after oil prices soared.
Oil dives, forecast of mild US winter spurs retreat from multi-year highs - Oil tumbled on Thursday as a forecast for a warm U.S. winter put the brakes on a rally that drove prices to a three-year high above US$86 a barrel early in the session on tight supply and a global energy crunch. Winter weather in much of the United States is expected to be warmer than average, according to a National Oceanic and Atmospheric Administration released Thursday morning. "The report, indicating drier and warmer conditions across the southern and eastern U.S., is putting pressure on the complex," said Bob Yawger, director of energy futures at Mizuho. Brent crude fell US$1.21 to US$84.61, after reaching a session high of US$86.10, highest since October 2018. U.S. West Texas Intermediate crude settled down 92 cents to US$82.50. Prices had rallied on Wednesday when the U.S. Energy Information Administration reported tighter crude and fuel inventories, with crude stocks at the Cushing, Oklahoma storage hub falling to a three-year low. [EIA/S] "Traders who had set US$86 as their selling threshold took the opportunity to already pocket some profit," said Louise Dickson of Rystad Energy. "Oil prices took a dive as a result." The price of Brent has risen over 60per cent this year, supported by a slow ramp-up in supply by the Organization of the Petroleum Exporting Countries and allies known collectively as OPEC+, and a global coal and gas crunch that has driven power generators to switch to oil. Oil also came under pressure from a drop in coal and natural gas prices. In China, coal fell 11per cent, extending losses this week since Beijing signalled it might intervene to cool the market. "With coal and gas prices easing and with the relative strength index technical indicators still in overbought territory, the odds of a sharp, but material fall in oil prices are rising," said Jeffrey Halley, analyst at brokerage OANDA. Still, some analysts are calling for oil to rally further as OPEC+ is likely to stick to its plan for gradual output increases while demand is expected to reach pre-pandemic levels. Rystad said the outlook was bullish for the rest of the year and Giovanni Staunovo of Swiss bank UBS said in a report he expected Brent to trade at US$90 in December and March.7:32 PM
Oil Down as Consumers Fight Back, Putin Says OPEC+ to Produce More - Crude markets settled with their biggest loss in two weeks on Thursday after Russian President Vladimir Putin said the OPEC+ cartel which includes Moscow might put out more barrels than it has announced.Oil prices were also down as China, India and other consumers fought back against high energy prices which they said could ruin their economies with runaway inflation.Adding to the pressure on energy markets were expectations that much of the United States will have a warmer-than-average winter, following a downgrade to cold conditions by the National Oceanic and Atmospheric Administration. Natural gas prices fell almost 1% on the day after weekly storage levels rose slightly more than expected, another indication of warmer weather and less use for heating this fall.In Putin’s case, he surprised markets by announcing that the OPEC+ was increasing oil output “a bit more than agreed”. That was in contrast to what most in the 23-nation oil producing alliance, led by Saudi Arabia, have been saying.Officially, at its meeting in early October, OPEC+ said it will not add more than the 400,000 barrels per day increase it had committed to previously, despite a global supply squeeze that has sent prices to seven-year highs.“Not all countries are able to significantly raise oil production,” Putin said, implying that Russia might be the exception. Besides him, Iraq's Oil Minister has also said that Baghdad has the capacity to pump more.The OPEC+ arrangement, in place since 2015, has worked largely due to the cooperation between Russia and Saudi Arabia — the world’s largest oil producers, aside from the United States, which has lost its number one ranking since the onset of the coronavirus pandemic in March 2020.The Moscow-Riyadh pact has not been without its problems, however. A disagreement between the two on production led to a brief collapse of OPEC+’s working order before the pandemic, sparking a global supply glut that sent U.S. crude prices into negative territory the first time ever.In Thursday’s session, U.S. crude’s West Texas Intermediate benchmark settled down 92 cents, or 1.1%, at $82.50 per barrel — its biggest one-day drop since Oct. 6. WTI fell to as low as $80.81 earlier. On Wednesday, it hit a high of $84.25, marking a seven-year peak.London-traded Brent crude, the global benchmark for oil, settled down $1.21, or 1.4%, at $84.61. Brent hit a three-year high of $86.09 on Tuesday.
Oil climbs on tight U.S. supply even as coal, gas crunch eases - Oil prices resumed their climb on Friday on continued tightness in U.S. supply, but were headed for a flat finish on the week as coal and gas prices eased, curbing fuel-switching which had stoked demand for oil products for power.U.S. West Texas Intermediate (WTI) crude futures settled $1.26, or 1.5%, higher at $83.76 per barrel.Brent crude futures climbed 92 cents, or 1.09%, to settle at $85.53 per barrel, recouping some of the previous session's $1.21 slump. Brent touched a three-year high of $86.10 on Thursday but was on track to end the week unchanged.The market hit multi-year highs earlier in the week on worries about coal and gas shortages in China, India and Europe, which spurred fuel-switching to diesel and fuel oil for power."Weaker natural gas and coal prices would have taken away some of the support for the oil market," ING commodities strategists said in a note.U.S. crude was headed for a 0.5% rise for the week, holding not far off a seven-year high hit earlier in the week as investors eye low crude stocks at the major Cushing storage location in Oklahoma."There are clear concerns over the inventory drain that we are seeing at the WTI delivery hub, Cushing," ING analysts said.U.S. Energy Information Administration data on Wednesday showed crude stocks at Cushing fell to 31.2 million barrels, their lowest level since October 2018, despite refinery crude runs having fallen in the week to Oct. 15.Royal Bank of Canada analysts said some steam had come out of the market as investors were shifting their focus away from soaring front month crude prices. "Some investors are also trimming risk across various energies, with the rationale being that energy crisis euphoria has peaked," RBC analyst Michael Tran said in a note, adding "these are not necessarily our views."
NYMEX WTI Tops $83 on Tight Cushing Stocks, Lower Rig Count (DTN) -- Bolstered by a weakening U.S. Dollar Index, nearby delivery month West Texas Intermediate crude futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange rallied in market-on-close trade Friday. Both benchmarks rose 1.5% after industry data from Baker Hughes reported the first decline in the number of operating oil rigs in the United States since the week ended Sept. 10, underscoring a laggard recovery in domestic production despite elevated price levels. U.S. crude oil production remained about 200,000 barrels per day (bpd) below pre-Hurricane Ida levels in the most recent week, according to the U.S. Energy Information Administration, with domestic operators unexpectedly reducing output once again almost two months after Ida's landfall along the Louisiana coastline. The unexpected drop in domestic production coincides with the decline in the number of oil-targeted rigs in the U.S., often seen as a proxy for future output. Baker Hughes reported domestic operators decommissioned two oil rigs during the week ended Oct. 22, bringing the total number of operating rigs to 443, well below pre-pandemic rig counts of nearly 700. Meanwhile, crude oil stored at the Cushing, Oklahoma, hub, the delivery point for WTI, fell by another 2.3 million barrels (bbl) through Oct. 15 to 31.2 million bbl, the lowest since October 2018, according to EIA's latest weekly report. Given the current supply deficit, the result is likely one where U.S. crude inventories will continue to grind lower in coming weeks, supporting WTI futures. Goldman Sachs estimates the fourth quarter supply deficit on the global oil market could be as high as 4.5 million bpd or 5% of the worldwide consumption. "This is a big hole to fill even with the production increases that we have penciled in going from now to the end of this year," said Jeff Currie, head of Goldman Sachs's Commodity Research and Global Investment Research Division. "Maybe we can get that deficit whittled down to 2 million bpd, but we will be at a critical operating level of inventory by the year end" he added. On the session, NYMEX WTI futures for December delivery rallied $1.26 to $83.76 bbl, while the December ICE Brent futures gained $0.92 to $85.53 bbl. November RBOB futures on NYMEX gained 0.20 cents to $2.4821 gallon, and front-month ULSD futures declined 1.02 cents to $2.5389 gallon. Friday's gains in the crude complex came on the back of a softer U.S. Dollar Index that declined 0.17% against the basket of foreign currencies to finish the session at 93.595. Federal Reserve Chairman Jerome Powell said Friday during virtual press conference that he is now somewhat more concerned about higher inflation and the central bank would watch carefully for signs that households and businesses were expecting sustained price pressures to continue. "Supply-side constraints have gotten worse. The risks are clearly now to longer and more-persistent bottlenecks, and thus to higher inflation." 7:32 PM
U.S. oil futures score the longest weekly winning streak on record - Oil futures climbed on Friday, with U.S. prices tallying a record streak of weekly gains, up nine weeks in a row, on the back of easing travel restrictions, a slow recovery in U.S. crude production and expectations for higher energy demand for the holidays. West Texas Intermediate crude for December delivery rose $1.26, or 1.5%, to settle at $83.76 a barrel on the New York Mercantile Exchange. Prices for the front-month contract saw a 2.6% weekly rise. That marked a ninth weekly climb in a row for the U.S. crude benchmark, the longest-ever weekly winning streak for front-month WTI contracts, based on records going back to April 1983, according to Dow Jones Market Data. December Brent crude, the global benchmark, rose 92 cents, or 1.1%, at $85.53 a barrel on ICE Futures Europe, for a 0.9% weekly advance. WTI earlier this week closed at a seven-year high, while Brent has traded at its highest in three years. “Oil continued its three-month rally of almost 30% as COVID peaked and the U.S. opened up travel to vaccinated travelers,” “We expect oil to continue its rally as we head into November and colder weather triggers more demand for heating oil, and the holidays drive incremental gasoline demand.” They expect oil to trade in the $80-$100 range in 2022, citing “incremental demand related to international travel and incremental demand from fuel switching, as global natural-gas prices trade at the energy equivalent rate of $180 barrel,” Crude pulled back Thursday as natural-gas prices retreated following weekly U.S. data that showed a larger-than-expected climb in domestic storage of the fuel. News that China would make moves to roll back record coal prices also put some pressure on oil in early Wednesday dealings, before data showing a surprise fall in U.S. crude stockpiles lifted prices for that session. Global oil inventory levels “remain tight as demand growth remains firm but production growth lags,” said Marshall Steeves, energy markets analyst at IHS Markit, told MarketWatch. The Organization of the Petroleum Exporting countries and their allies are “sticking with planned monthly increases of 400,000 [barrels per day] while U.S. production actually fell last week and has only been recovering from the pandemic at a slow pace.” Data from Baker Hughes on Friday also suggested a potential decline in oil production, with the number of active U.S. rigs drilling for oil posting their first weekly decline in seven weeks, down two at 443 this week. The wide price spread between the current front-month WTI December contract and the December 2022 indicates a supply shortage.
Climate policies could spark an 'even worse' energy crisis, Saudi finance minister says - Saudi Arabia's finance minister has told CNBC that an "even worse" energy crisis could be triggered if the world is not careful with its climate policies. "If we are not careful about what we are doing to achieve our targets, we may end up having [a] very serious energy crisis like what we are seeing now, and it could be even worse in the future," said Mohammed al-Jadaan, though he noted that climate policies are "very important." Gas prices across Europe and elsewhere have surged because of a number of factors including increased demand, low inventories and a lack of wind power generation. Speaking to CNBC's Hadley Gamble Wednesday in an exclusive interview, Finance Minister al-Jadaan called for balance, saying he would like to see developments in new technologies for capturing, reusing and recycling carbon alongside investment in renewable energy sources. "I think we will be a lot safer in both climate change and energy security" if the right balance is struck, said al-Jadaan. It comes as Saudi Arabia attempts to diversify its economy away from reliance on hydrocarbons, although the majority of its revenues still come from oil. Brent and U.S. crude benchmarks have both risen more than 65% this year, and are hovering around multi-year highs. Al-Jadaan said the kingdom doesn't want oil prices too high or low. "I don't want a price that is too low, which then will cripple investments and cause a serious energy crisis," he said. He added that "unintended consequences" of policies focusing on renewables in places like Europe had helped cause gas prices to soar. A "balanced" oil price is one that is good for producers and allows them to continue investing in supply, but does not derail the world's recovery from a "very devastating Covid-19 crisis," he said.
How Much Oil Can OPEC Realistically Add? –** Two weeks ago, in a short and terse affair that did nothing to address the spill-over from overheating gas markets, OPEC+ confirmed that it would stick to its July agreement to boost output by 400,000 barrels per day (bpd) each month until at least April 2022 to phase out 5.8 million bpd of existing production cuts.The group 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 lower compared to the huge curbs that were in place during the worst of the pandemic.The organization has lately come under pressure to ramp up production at a faster clip from several quarters, including the Biden administration so as to ease supply shortages and rein in spiraling oil prices. OPEC+ is scared of spoiling the oil price party by making any sudden or big moves with last year's oil price collapse still fresh on its mind.But maybe we have been overestimating how much power the cartel has to jack up production on the fly.According to a recent report, at the moment, just a handful of OPEC members are capable of meeting higher production quotas compared to their current clips.Amrita Sen of Energy Aspects has told Reuters that only Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Azerbaijan are in a position to boost their production to meet set OPEC quotas, while the other eight members are likely to struggle due to sharp declines in production and years of underinvestment.According to the report, Africa's oil giants Nigeria and Angola are the hardest hit, with the pair having pumped an average of 276kbpd below their quotas for more than a year now.The two nations have a combined OPEC quota of 2.83 million bpd according to Refinitiv data, but Nigeria has failed to meet its quota since July last year and Angola since September 2020. In Nigeria, five onshore export terminals run by oil majors with an average production clip of 900,000 bpd handled 20% less oil in July than the same time last year despite relaxed quotas. The declines are due to lower production from all the onshore fields that feed the five terminals.Indeed, it could take at least two quarters before most companies can work through their maintenance backlogs which covers everything from servicing wells to replacing valves, pumps, and pipeline sections. Many companies have also fallen behind on plans to do supplementary drilling to keep production stable.
Israel Approves $1.5 Billion Budget For Potential Attack On Iran -- According to a report from Israel’s Channel 12, the Israeli government approved a $1.5 billion budget to prepare for a potential attack on Iran.The extra funds would be used to purchase additional aircraft, surveillance drones, and the munitions needed to strike Iran’s underground nuclear facilities. The report said about $620 million would come from the 2022 military budget, and the rest of the funds would come from this year’s budget.For years, Israel has been seeking bunker-busting bombs that could penetrate Iran’s underground facilities. If they did acquire the munitions, Israel would also need bombers capable of carrying them, something it currently doesn’t have.The US tested a new 5,000-pound bunker buster earlier this month, which Israeli media interpreted as a possible message to Iran.In July, it was reported that the Israeli Defense Forces (IDF) requested additional funds for next year’s budget to prepare for operations against Iran. Throughout the year, IDF Chief of Staff Aviv Kohavi has repeatedly said the IDF is"accelerating" plans to strike Iran, and Israeli politicians have constantly been threatening the Islamic Republic.Israel frequently carries out covert attacks against Iran’s civilian nuclear program, but the IDF planning suggests an overt operation could happen in the future. The US has joined Israel in issuing threats against Iran.Last week, Secretary of State Antony Blinken hinted at military action against Iran alongside Israeli Foreign Minister Yair Lapid. Blinken said if diplomacy with Iran fails, the US will turn to "other options."Lapid made clear that one of Blinken’s "options" was military action. "I would like to start by repeating what the Secretary of State just said. Yes, other options are going to be on the table if diplomacy fails. And by saying other options, I think everybody understands here … what is it that we mean," Lapid said.
US Base In Eastern Syria Comes Under Rare Drone & Ground Attack - Late into the evening local time on Wednesday, a remote American military outpost in eastern Syria came under attack by unknown militants. So far the Pentagon is indicating that there are no American casualties or injuries during what appears to have been a sophisticated assault, given the presence of foreign drones overhead along with reported ground fire.It happened at the al-Tanf base in Syria's far eastern desert along the Iraqi border, which has had a significant US presence since at least 2016. Tanf is the furthermost southerly US garrison in that region, given that most American forward operating bases are in Syria's northeast. The Associated Press has cited a US defense official who gave the following sparse details:The official said the attack appeared to include at least one drone strike and possibly groundfire. It was not yet clear who carried out the attack.US and coalition troops are based at the al-Tanf garrison to train local Syrian opposition forces on patrols to counter Islamic State militants.Additionally, "The official said there was no information on whether local forces were injured or killed in the attack." Reports suggest the UAV may have been a suicide drone.
Syria secretly stole $100 million from UN donations by manipulating currency exchange rates, report says - The Syrian government has diverted $100 million worth of UN aid donations by manipulating the value of its currency, according to a new analysis.President Bashar al-Assad's oppressive regime has been subject to harsh sanctions for years, meaning the government can't generate revenue through trade with the likes of the US, UK, and EU. Millions of dollars in Syrian government assets have been frozen in banks located in Lebanon and elsewhere in the Middle East. As a result, the Syrian central bank has turned to illicit means to generate capital, researchers from the Center for Strategic and International Studies said as part of a study conducted with the Operations & Policy Center and the Center for Operational Analysis and Research.The UN funnels millions in aid to Syria each year for poverty relief, but according to an analysis of 779 public UN contracts, Syria has since 2019 made the UN use the central bank's official exchange rate of between 2,500 and 1,500 Syrian pounds to one US dollar, CSIS said.The unofficial — and less lucrative — rate, used by traders and on the black market, is 3,500 Syrian pounds to the dollar.This means that 50% of foreign aid sent to Syria by the UN in 2020 was lost to the government, the researchers said.According to the report, the Syrian government has made a total of $100 million from this scheme since 2019. The bodies targeted by the Syrian regime included the UN's office for the coordination of humanitarian affairs, the World Food Programme, the UN Development Programme, and UNICEF, according to to the Guardian.
Afghanistan's economy could shrink by 30% following Taliban takeover, IMF says - Afghanistan's gross domestic product could see a contraction of up to 30% following the Taliban takeover, the IMF said in its latest regional economic report. Jihad Azour, director of the IMF's Middle East and Central Asia department, said the country's situation was deteriorating, even before Kabul fell. "They were facing more than one shock — drought, Covid," he told CNBC's Hadley Gamble. "Therefore, what we foresee and fear is a sharp contraction." The report also noted that non-humanitarian aid has been halted, foreign assets mostly frozen and Afghan banks have been crippled by cash shortages after the Taliban returned to power. "These shocks could cause a 20–30 percent output contraction, with falling imports, a depreciating Afghani, and accelerating inflation," the report said. "The resulting drop in living standards threatens to push millions into poverty and could lead to a humanitarian crisis." Additionally, "the turmoil is fueling a surge in Afghan refugees" that could burden public resources in refugee-hosting countries, pressure the labor market and create social tensions, the IMF said, highlighting the need for assistance from the international community. The G-20 last week pledged to help tackle the crisis in Afghanistan. Azour said the IMF welcomes the international community's scaled-up humanitarian aid, and said there should be a focus on education and health services. The International Monetary Fund also incrementally raised its outlook for the Middle East and North Africa region. It expects real GDP to grow 4.1% in 2021 and 2022, up 0.1 percentage points and 0.4 percentage points respectively from its April projection. In the Caucasus and Central Asia, real GDP is expected to grow 4.3% in 2021 and 4.1% in 2022. But the recoveries remain "divergent" and will be shaped by several factors including Covid-19 vaccination rates and high oil prices, the IMF predicts.
Taliban beheaded Afghanistan volleyball player: coach - An Afghan volleyball player on the girls’ national team was beheaded by the Taliban — with gruesome photos of her severed head posted on social media, according to her coach. Mahjabin Hakimi, one of the best players in the Kabul Municipality Volleyball Club, was slaughtered in the capital city of Kabul as troops searched for female sports players, her coach told the Persian Independent. She was killed earlier this month, but her death remained mostly hidden because her family had been threatened not to talk, claimed the coach, using a pseudonym, Suraya Afzali, due to safety fears. Images of Hakimi’s severed neck were published on Afghan social media, according to the paper, which did not say how old she was. Mahjabin Hakimi was slaughtered in capital Kabul as Taliban troops searched for female sports players. Conflicting reports online suggested that happened earlier, with an apparent death certificate suggesting she was killed Aug. 13 — the final days of the Taliban’s insurgency before seizing Kabul. However, the Payk Investigative Journalism Center said its sources also confirmed that Hakimi “was ‘beheaded’ by the Taliban in Kabul.” The governing group has yet to comment, Payk Media said. Afzali told the Persian Independent that she was speaking out to highlight the risk that female sports players face, with only two of the women’s national volleyball team having managed to flee the country. “All the players of the volleyball team and the rest of the women athletes are in a bad situation and in despair and fear,” she told the paper. “Everyone has been forced to flee and live in unknown places.” One of the players who escaped, Zahra Fayazi, told the BBC last month that at least one of the players had been killed. “We don’t want this to repeat for our other players,” she told the broadcaster from her new home in the UK. “Many of our players who are from provinces were threatened many times by their relatives who are Taliban and Taliban followers.
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