US oil supplies at a 19 year low; Strategic Petroleum Reserve at a 37½ year low after record SPR withdrawal; gasoline supplies at 42 week low; distillates demand at a 21 month low; global oil surplus at 1,630,000 barrels per day in August, even as OPEC output is 1,411,000 barrels per day short of quota..
oil prices fell for a third straight week as an elevated US inflation reading presaged a large Fed interest rate hike next week...after falling just 0.1% to $86.79 a barrel over last week as lockdowns in China and a big build of US crude inventories were offset by a modest OPEC production cut and Russian threats to oil supplies, the contract price for the benchmark US light sweet crude for October delivery moved higher in Asian trading on Monday as the U.S. dollar weakened against other currencies and traders bet that inflation was at or near its peak, then rose in New York as Iranian nuclear talks appeared to hit obstacles and as an embargo on Russian oil shipments loomed, and settled 99 cents higher at $87.78 a barrel as oil supply concerns mounted heading into winter after the EIA reported a record draw from the Strategic Petroleum Reserve...after rising early Tuesday as the dollar strengthened ahead of the US inflation report, oil prices reversed and gave back half of Monday's gain, falling 47 cents to $87.31 a barrel, as a stronger-than-expected reading on inflation strengthened the dollar and increased the likelihood of higher interest rates, which would dull the demand for oil....but oil prices steadied in late trading despite an American Petroleum Institute report of another big build of US crude inventories, as chatter that the Biden administration would buy crude at $80/bbl to refill the SPR sent prices rebounding....however, oil prices softened in early trading Wednesday after the International Energy Agency raised its global demand outlook for the remainder of the year, citing soaring oil use for power generation and gas-to-oil switching across large economies in Asia and the European Union. but rallied late to settle $1.17 higher at $88.48 a barrel, buoyed in part by a report from Bloomberg that said the Biden administration might consider refilling the nation's Strategic Petroleum Reserve when crude prices dip below $80 a barrel... oil prices edged upwards in early Asian trade on Thursday, as supply concerns and a looming rail stoppage in the US supported markets, but then tumbled $3.38 or nearly 4% to a one-week low of $85.10 a barrel on a tentative agreement to avert a rail strike, and on expectations for weaker global demand and continued U.S. dollar strength ahead of a potentially large interest rate increase...oil prices moved mixed early Friday amid persistent fears that higher interest rates from the Fed would push the U.S. economy into a recession, denting demand growth for oil and petroleum products and settled the session a penny higher at $85.11 a barrel as a spill at Iraq's Basra oil terminal appeared likely to constrain crude supply, but still finished down 1.9% from the prior week, as mounting evidence of an economic slowdown overshadowed supply-risk concerns...
Meanwhile, natural gas prices finished lower for a fourth straight week on a bearish storage report and on the belief that a railroad strike had been averted....after falling 9.0% to $7.996 per mmBTU last week on record production and on moderating weather forecasts, the contract price of US natural gas for October delivery advanced for a third consecutive session on Monday, propelled by festering worries about the inadequacy of gas stored for winter. and settled 25.3 cents higher at $8.249 per mmBTU, buoyed by technical trading and slightly lower production estimates for the week...natural gas prices edged higher again on Tuesday on worries that a possible railroad strike would disrupt coal supplies to power plants, which would force generators to burn more gas to produce electricity, and settled 3.5 cents higher at $8.284 per mmBTU...the October gas contract price rose for a fifth straight day on Wednesday, boosted by late-season heat, domestic storage concerns and a robust global demand for U.S. LNG exports, and spiked 83.0 cents or 10% on the day to settle at $9.114 per mmBTU, the highest price in two weeks...however, natural gas prices reversed course on Thursday and tumbled 79 cents, or 9%, to $8.324 per mmBTU, on a bigger-than-expected increase in inventories and on reports of a deal that would avert a rail strike....natural gas prices continued falling on Friday as gasfield output held near a record high and as global gas prices slumped and settled down 56.0 cents on the day at $7.764 per mmBTU, and thus ended 2.9% lower on the week...
The EIA's natural gas storage report for the week ending September 9th indicated that the amount of working natural gas held in underground storage in the US rose by 77 billion cubic feet to 2,771 billion cubic feet by the end of the week, which left our gas supplies 223 billion cubic feet, or 7.4% below the 2,916 billion cubic feet that were in storage on September 9th of last year, and 354 billion cubic feet, or 11.3% below the five-year average of 3,125 billion cubic feet of natural gas that were in storage as of the 9th of September over the most recent five years....the 77 billion cubic foot injection into US natural gas working storage for the cited week was on the high side of forecasts from analysts that called for an injection between 62 and 80 billion cubic feet, but was close to the 78 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, while a bit less than the average injection of 82 billion cubic feet of natural gas that had typically been added to our natural gas storage during the same week over the past 5 years....
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending September 9th showed that despite a big drop in our oil imports, a record draw of oil from our SPR meant we had unused oil left to add to our stored commercial crude supplies for the 2nd time time in 5 weeks, and for the 18th time in the past 42 weeks....Our imports of crude oil fell by an average of 988,000 barrels per day to average 5,792,000 barrels per day, after rising by an average of 824,000 barrels per day during the prior week, while our exports of crude oil rose by 82,000 barrels per day to average 3,515,000 barrels per day, which meant that the net of our trade in oil worked out to an import average of 2,277,000 barrels of oil per day during the week ending September 9th, 1,070,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly unchanged at 12,100,000 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 14,377,000 barrels per day during the September 9th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,022,000 barrels of crude per day during the week ending September 9th, an average of 94,000 more barrels per day than the amount of oil than our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net average of 853,000 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, the crude oil figures from the EIA for the week ending September 9th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 792,000 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 inserted a (+792,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error 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 oil wells, we’ll continue to report this data just as it's published, and just as it's 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)….
This week's 853,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 863,690,000 barrels at the end of the week, which is our lowest total oil inventory level since April 11th, 2003, and therefore at a new 19 year low.….Our oil inventories decreased this week as 349,000 barrels per day were being added to our commercially available stocks of crude oil while a record 1,202,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR was another installment of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising, at least up until then, and was apparently up by 864,000 barrels per day from two weeks ago because the administration is now attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 222,092,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 26 months, and as a result the 434,057,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since October 26th, 1984, or at a 37 1/2 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. Now the total 180,000,000 barrel drawdown expected during the current six month release program to November will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at today's consumption rate...
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,340,000 barrels per day last week, which was 4.6% more than the 6,064,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 12,100,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,700,000 barrels per day, while Alaska’s oil production was 4,000 barrels per day higher at 434,000 barrels per day but had no impact on the final rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 7.6% below that of our pre-pandemic production peak, but was 24.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...
US oil refineries were operating at 91.5% of their capacity while using those 16,022,000 barrels of crude per day during the week ending September 9th, up from their 90.9% utilization rate during the prior week, but a refinery utilization rate that's a bit below the normal range for the week after Labor Day. The 16,022,000 barrels per day of oil that were refined this week were 11.4% more than the 14,387,000 barrels of crude that were being processed daily during week ending September 10th of 2021 (after Hurricane Ida), but 4.1% less than the 16,707,000 barrels that were being refined during the prepandemic week ending September 13th, 2019, when our refinery utilization was at 91.2%, also on the low side of the normal range for early September...
Despite the increase in the amount of oil being refined this week, the gasoline output from our refineries was lower, decreasing by 399,000 barrels per day to 9,453,000 barrels per day during the week ending September 9th, after our gasoline output had increased by 74,000 barrels per day during the prior week. This week’s gasoline production was still 2.0% more than the 9,271,000 barrels of gasoline that were being produced daily over the same week of last year, and virtually matched the gasoline production of 9,451,000 barrels per day during the week ending September 13th, 2019, ie, during the year before the pandemic impacted US gasoline output. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 12,000 barrels per day to 5,019,000 barrels per day, after our distillates output had increased by 112,000 barrels per day during the prior week. With that increase, our distillates output was 6.7% more than the hurricane impacted 4,706,000 barrels of distillates that were being produced daily during the week ending September 10th of 2021, but 1.8% less than the 5,109,000 barrels of distillates that were being produced daily during the week ending September 13th 2019...
With the decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 6th time in 8 weeks; and for the 25th time out of the past thirty-two weeks, decreasing by 1,768,000 barrels to a 42 week low of 213,040,000 barrels during the week ending September 9th, after our gasoline inventories had increased by 333,000 barrels during the prior week. Our gasoline supplies fell this week even though the amount of gasoline supplied to US users fell by 233,000 barrels per day to 8,494,000 barrels per day, because our imports of gasoline fell by 509,000 barrels per day to 522,000 barrels per day, while our exports of gasoline fell by 106,000 barrels per day to 1,070,000 barrels per day. but even after 25 gasoline inventory drawdowns over the past 32 weeks, our gasoline supplies were just 2.3% lower than last September 10th's gasoline inventories of 218,142,000 barrels, and about only 2% below the five year average of our gasoline supplies for this time of the year…
Even after the decrease in our distillates production, our supplies of distillate fuels increased for the 11th time in 17 weeks and for the 21st time in the past year, rising by 4.219,000 barrels to 116,020,000 barrels during the week ending September 9th, after our distillates supplies had increased by 95,000 barrels during the prior week. Our distillates supplies rose by their most this year this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 492,000 barrels per day to a 21 month low of 3,132,000 barrels per day, and because our exports of distillates fell by 156,000 barrels per day to 1,409,000 barrels per day, while our imports of distillates fell by 47,000 barrels per day to 125,000 barrels per day.. But after forty-eight inventory withdrawals over the past seventy-three weeks, our distillate supplies at the end of the week were 12.0% below the 133,586,000 barrels of distillates that we had in storage on September 10th of 2021, and about 21% below the five year average of distillates inventories, for this time of the year...
Meanwhile, with the record withdrawal of crude from the SPR, our commercial supplies of crude oil in storage rose for the 11th time in 21 weeks and for the 22nd time in the past year, increasing by 2,442,000 barrels over the week, from 427,191,000 barrels on September 2nd to 429,633,000 barrels on September 9th, after our commercial crude supplies had increased by 8.845,000 barrels over the prior week. After those increases, our commercial crude oil inventories were about 2% below the most recent five-year average of crude oil supplies for this time of year, and about 28% above the average of our crude oil stocks as of the second weekend of September 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. And even though our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after last year's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this September 9th were 2.9% more than the 417,445,000 barrels of oil we had in commercial storage on September 10th of 2021, and were 13.4% less than the 496,045,000 barrels of oil that we had in storage on September 11th of 2020, and 3.0% more than the 417,126,000 barrels of oil we had in commercial storage on September 13th of 2019…
Lastly, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. With the increases we've already noted, the EIA's data shows that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 2,943,000 barrels this week, from 1,667,619,000 barrels on September 2nd to 1,664,676,000 barrels on September 9th, after our total inventories had risen by 3,680,000 barrels during the prior week. That left our total liquids inventories down by 123,757,814,000 barrels over the first 34 weeks of this year, and less than a million barrels from a 13 1/2 year low...
OPEC's Report on Global Oil for August
Tuesday of this week saw the release of OPEC's September Oil Market Report, which includes the details on OPEC's & global oil data for August, and hence it gives us a picture of the global oil supply & demand situation after China had briefly reopened their cities after their most restrictive Covid lockdowns, while oil supplies from Russia continued to be constrained by Western sanctions, and while at the same time OPEC and aligned oil producers agreed to increase their output by the usual 400,000+* barrels per day for a thirteenth consecutive month, ie the 13th such increase from the previously agreed to July 2021 level, and to also increment that increase with half of the 400,000+ bpd production increase they had originally scheduled for September...that September was the sixth production and last quota policy reset that they had made over the past twenty-eight months, all by way of responding to the pandemic-related demand slowdown and subsequent irregular recovery, and with August's production increase, the cartel's output should be back to the level it was at before the Covid production cuts began....note that with the course and impact of the Ukraine war and the future course of the Covid pandemic largely unknown, the demand projections made in this report will have a much greater degree of uncertainty than they would have during normal, more stable times..
The first table from this month's report that we'll review is from the page numbered 50 of this month's report (pdf page 60), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC has used an average of production estimates by six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures....as of the June report, the consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy were also added to OPEC's secondary sources.....
As we can see on the bottom line of the above table, OPEC's oil output increased by 618,000 barrels per day to 29,651,000 barrels per day during July, up from their revised June production total that averaged 28,482,000 barrels per day....however, that July output figure was originally reported as 28,896,000 barrels per day, which therefore means that OPEC's June production was revised 137,000 barrels per day higher with this report, and hence OPEC's July production was, in effect, 788,000 barrels per day higher than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official June OPEC output figures as reported a month ago, before this month's revision)...
According to the agreement reached between OPEC and the other oil producers at their Ministerial Meeting on July 18th, 2021, the oil producers party to that agreement were to raise their output by a total of 400,000 barrels per day each month through December 2021, (later bumped up to 432,000 bpd) which was subsequently renewed at monthly meetings to include further 400,000+ barrel per day production increases in January, February, March, April, May, & June of 2022, and which would indicate an increase of 254,000 barrels per day each month from the OPEC members listed above, (later bumped up to 286,000 barrels per day) with the rest of the current 432,000 barrel per day cartel increase to supplied by other aligned oil producers. including Russia...with the OPEC agreement reached on June 3rd, they agreed to further increase their output for July and August each by half of the 432,000 barrels per day they had scheduled as an increase in September...hence, the August production increase for the extended cartel was to expected to be 648,000 barrels per day, with 429,000 barrels of that coming from OPEC...hence, OPEC's actual August increase of 618,000 barrels per day was considerably more than the increase they had commited to....however, the 426,000 barrel per day production increase in Libya, coming after a cessation of hostilities between waring factions, was the sole reason that OPEC managed to beet their quota for the month, and several other OPEC members continued to be well short of what they were expected to produce, as we'll see in the next table...
The adjacent table was originally included as a downloadable attachment to the press release following the 30th OPEC and non-OPEC Ministerial Meeting on June 30, 2022, which set OPEC's and other aligned oil producers' production quotas for August... since war torn Libya and US sanctioned producers Iran and Venezuela were exempt from the production cuts imposed by the joint agreement that governs the output of the other OPEC producers, they are not shown in this list, and OPEC's quota excluding them is aggregated under the total listed for the 'OPEC 10', which you can see was expected to be at 26,689,000 barrels per day in August....therefore, the 25,278,000 barrels those 10 OPEC members actually produced in August were 1,411,000 barrels per day short of what they were expected to produce during the month, with Nigeria and Angola accounting for a large part of this month's shortfall, while only Kuwait and Gabon were able to produce what was expected of them...
+ + +
* Recall that the original 2020 oil producer's agreement was to jointly cut their oil production by 23%, or by 9.7 million barrels per day, from an October 2018 baseline for just two months early in the pandemic, during May and June of 2020, but that initial 9.7 million bpd production cut agreement was extended to include July 2020 at a meeting between OPEC and other producers on June 6th, 2020....then, in a subsequent meeting in early July of that year, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August 2020 and subsequent months, which thus became the agreement that governed OPEC's output for the rest of 2020...the OPEC+ agreement for their January 2021 production, which was later extended to include February and March and then April's output, was to further ease their supply cuts by 500,000 barrels per day to a reduction of 7.2 million barrels per day from that original October 2018 baseline...then, during a meeting on April 1st of last year, OPEC and the other oil producers that are aligned with them agreed to incrementally adjust their oil production higher for the following three months by a pre-set amount for each country, thus extending their joint output cut agreement through July 2021....production levels for August and the following months of last year were to be determined by a July 1st OPEC meeting, but that meeting was adjourned on July 2nd due to a dispute between the UAE and the Saudis over the 2018 reference production levels on which the cuts are based, and a subsequent attempt to restart that meeting on July 5th was called off....so it wasn't until July 18th 2021 that a tentative compromise addressing August 2021's output quotas was worked out, allowing oil producers in aggregate to increase their production by 400,000 barrels per day in August, and again by that amount in each of the following months, and also to boost reference production levels for the UAE, the Saudis, Iraq and Kuwait beginning in April 2022, and which made the cartel's effective monthly production increase 432,000 barrels per day since that time....OPEC and other producers then agreed to increase their production in January 2022 by a further 400,000 barrels per day in a meeting concluded on the 2nd of December, 2021, and reaffirmed their intention to continue that policy with another 400,000 barrel per day increase in February at a meeting concluded January 4, 2022, and then agreed to stick to that 400,000 bpd oil output increase in March, despite pressure from the US to raise output more quickly, at a meeting on February 2nd....then, at a meeting on March 2nd, OPEC and its oil-producing allies, which included Russia, decided to hold their production increase at that level thru April in an OPEC+ meeting that only lasted 13 minutes, their shortest meeting ever...then on March 31, OPEC and aligned producers agreed to reaffirm the decisions of the prior Ministerial meetings and again limit their production increase for May to the agreed 400,000 barrels per day despite the Russian shortfall, because "the current [oil market]volatility is not caused by fundamentals, but by ongoing geopolitical developments"...following that, in an OPEC and non-OPEC Ministerial Meeting held on May 5th, they again "reaffirmed, reconfirmed, and reinterated" the decision of the July 18th 2021 meeting to increase production by 432,000 barrels per day in June...however, in a meeting held on June 2nd,they agreed to bring forward the 432,000 barrel per day increase they had already scheduled for September, with that increase to be split evenly between July and August...hence, the production quota increase for both July and August was set at 648,000 barrels per day, which would then leave each member's production back at the October 2018 baseline...
Hence OPEC arrived at the production quotas for August 2021 through July & Augst of this year after repeatedly readjusting the original 23%, or 9.7 million barrel per day production cut from the October 2018 baseline that they first agreed to for May and June 2020, first to a 7.7 million barrel per day output reduction from the baseline for the remainder of 2020, then to a 7.2 million barrel per day production cut from the baseline for the first four months of this year, which was subsequently raised to an 8.2 million barrel per day oil output reduction after the Saudis unilaterally committed to cut their own production by a million barrels per day during the Covid surge of February, March, and then later during April of last year....under the agreement prior to the July 18th 2021 pact affecting the recent months since then, OPEC's production cut in April 2021 was set at 4,564,000 barrels per day below the October 2018 baseline, which was lowered to a cut of 3,650,000 barrels per day from the baseline with the subsequent comprehensive agreement, which thus set the July 2021 production quota for the "OPEC 10" at 23,033,000 barrels per day, with war torn Libya and US sanctioned producers Iran and Venezuela exempt from the production cuts imposed by that agreement....for OPEC and the other producers to increase their output by 400,000 barrels per day from that July 2021 level, each producer would be need to initially increase their production by just over 1% per month since that time...for OPEC alone, that meant a 254,000 barrel per day increase for each month from July 2021 to April 2022, at which time the incremental 32,000 barrels per day adjustment they arrived at in July 2021 kicked in....adding together those monthly quota increases since last July, when the quota was at 23,033,000 barrels per day, and then adding the 216,000 barrel per day brought forward from September's increase to July's and August's quotas, is how they arrived at the 26,689,000 barrels per day quota for OPEC for August that you see on the table above..
The next graphic from this month's report that we'll look at shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from September 2020 to August 2022, and it comes from page 51 (pdf page 51) of OPEC's September Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....
After this month's 618,000 barrel per day increase in OPEC's production from their revised production of a month earlier, OPEC's preliminary estimate is that total global liquids production increased by a rounded 1,300,000 barrels per day to average 101.3 million barrels per day in August, a reported increase which came after July's total global output figure was apparently revised down by 600,000 barrels per day from the 100.6 million barrels per day of global oil output that was estimated for July a month ago, as non-OPEC oil production rose by a rounded 700,000 barrels per day in August after that downward revision, with 500,000 barrels per day of August's production growth coming from the OECD Americas, the OECD Europe, and "Other Eurasia", while oil production in Russia and in some other countries declined...
After that 1.3 million barrel per day increase in August's global output, the 101.3 million barrels of oil per day that were produced globally during the month were 5.98 million barrels per day, or 6.3% more than the revised 95.32 million barrels per day that were being produced globally in August a year ago, which was the third month after OPEC and their allied producers began their program of monthly production increases from the 7.2 million barrels per day production cut that had governed their output over the first four months of last year (see the September 2021 OPEC report (online pdf) for the originally reported August 2021 details)...with this month's increase in OPEC's output fairly large compared to the modest global increase, their August oil production of 29,651,000 barrels per day amounted to 29.3% of what was produced globally during the month, up from their revised 29.1% share of the global total in July, which had originally been reported at 28.7%, before this month's large revisions....OPEC's August 2021 production was reported at 26,762,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 2,889,000 barrels per day, or 10.8% more barrels per day of oil this August than what they produced last August, when they accounted for 28.0% of global output...
With the increases in both OPECs and global oil output that we've seen in this report, the amount of oil being produced globally during the month was significantly more than the expected global demand, as this next table from the OPEC report will show us....
The above table came from page 27 of the August Oil Market Report (pdf page 37), and it shows regional and total oil demand estimates in millions of barrels per day for 2021 in the first column, and then OPEC's estimate of oil demand by region and globally quarterly over 2022 over the rest of the table...on the "Total world" line in the fourth column, we've circled in blue the figure that's relevant for August, which is their estimate of global oil demand during the third quarter of 2022....OPEC is estimating that during the 3rd quarter of this year, all oil consuming regions of the globe have used an average of 99.67 million barrels of oil per day, which is an downward revision of 260,000 barrels per day from their estimate 99.93 million barrels per day for 3rd quarter demand of a month ago (that revision is circled in green)...but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were producing 101.3 million barrels per day during July, which would imply that there was a surplus of around 1,630,000 barrels per day of global oil production in August, when compared to the demand estimated for the month...
In addition to figuring that September oil surplus implied by this report, the downward revision of 600,000 barrels per day to July's global oil output that's implied in this report, combined with the 260,000 barrels per day downward revision to 3rd quarter demand that we've circled in green, means that the 670,000 barrels per day global oil output surplus we had previously figured for July would now be revised to a surplus of 330,000 barrels per day....
However, note that in green we have circled an upward revision of 70,000 barrels per day to OPEC's previous estimates of second quarter demand...based on that upward revision to demand, our previous estimate that there was a surplus of 350,000 barrels per day in June would now be revised to a 280,000 barrels per day surplus, while the oil shortage of 60,000 barrels per day that we had previously figured for May would have to be revised to a shortage of 130,000 barrels per day, and finally, that the 340,000 barrels per day global oil output surplus we had previously figured for April would have to be revised to a surplus of 270,000 barrels per day...
This Week's Rig Count
The number of drilling rigs running in the US rose for the second time in seven weeks, and for the 83rd time over the past 103 weeks during the week ending September 16th, but they're still 3.8% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 4 to 763 rigs this past week, which was also 251 more rigs than the 512 rigs that were in use as of the September 10th report of 2021, but was 1,166 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 market with oil in an attempt to put US shale out of business….
The number of rigs drilling for oil increased by 8 to 599 oil rigs during the past week, after the number of rigs targeting oil had decreased by 5 during the prior week, and there are now 188 more oil rigs active now than were running a year ago, even as they amount to just 37.2% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 12.3% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 4 to 162 natural gas rigs, which was still up by 62 natural gas rigs from the 100 natural gas rigs that were drilling during the same week a year ago, even as they were only 10.1% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….other than those rigs targeting oil and natural gas, Baker Hughes reports that two "miscellaneous" rigs continued drilling this week: a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, and a vertical rig drilling more than 15,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track....a year ago, there were was only one such "miscellaneous" rig running...
The offshore rig count in the Gulf of Mexico was up by one to 14 rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana's offshore waters....that's in contrast to a year ago, when only 6 Gulf rigs had restarted in the wake of Hurricane Ida...in addition to rigs drilling in the Gulf, we still have an offshore directional rigs drilling to between 5,000 and 10,000 feet for natural gas in the Cook Inlet of Alaska, while a year ago, there were two rigs drilling offshore from Alaska...
In addition to rigs running offshore, there are now four water based rigs drilling through inland bodies of water this week; the one added this week is a directional rig drilling to between 10,000 and 15,000 feet, inland in Galveston Bay. Texas; legacy inland waters rigs include a directional rig drilling for oil to between 5,000 and 10,000 feet in Cameron Parish, Louisiana; a directional rig targeting oil at a depth greater than 15,000 feet drilling through a lake on Grand Isle, Louisiana, and a directional rig drilling for oil in Terrebonne Parish, Louisiana, also at a depth greater than 15,000 feet...a year ago, there were was just one rig drilling on inland waters...
The count of active horizontal drilling rigs was up by 3 to 695 horizontal rigs this week, which was also 229 more rigs than the 466 horizontal rigs that were in use in the US on September 17th of last year, but just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....at the same time, the directional rig count was up by 2 to 45 directional rigs this week, and those were up by 28 from the 17 directional rigs that were operating during the same week a year ago…on the other hand, the vertical rig count was down by 1 to 23 vertical rigs this week, which was also down by 6 from the 29 vertical rigs that were in use on September 17th of 2021….
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 September 16th, the second column shows the change in the number of working rigs between last week’s count (September 9th) and this week’s (September 16th) count, the third column shows last week’s September 9th 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 17th of September, 2021...
checking first the Rigs by State file at Baker Hughes for the changes in Texas Permian, we find that there were two oil rigs added in Texas Oil District 8, which covers the core Permian Delaware, and that there were three oil rigs added in Texas Oil District 8A, which covers the northernmost counties of the Permian Midland, but that there was an oil rig pulled out of Texas Oil District 7C, which includes the southernmost counties of the Permian Midland...hence, those changes indicate a 4 rig increase in the Texas Permian, and since the national Permian basin count was just up by 3 rigs, we can conclude that the rig pulled out of New Mexico had been drilling in the far west Permian Delaware....elsewhere in Texas, there was a rig added Texas Oil District 2, which would account for one of the two oil rigs added in the Eagle Ford shale, while there was a rig pulled out of Texas Oil District 4, which would account for the natural gas rig pulled out of the Eagle Ford....however, the Eagle Ford saw an increase of two oil rigs, which means a rig was pulled out of a basin not tracked by Baker Hughes in the same Texas oil district the other Eagle Ford oil rig was added in...in addition, there was a natural gas rig pulled out of the Barnett shale in Texas Oil District 5, while there was an oil rig added in the Barnett in Texas Oil District 9...note that the Texas rig count was up by 5 with the inland waters rig addition in Galveston Bay.....
in other states, the Louisiana rig count was up by one with the rig addition in the adjacent Gulf of Mexico, the North Dakota rig count was down by one with the removal of an oil rig from the Williston basin, and the Oklahoma count remained unchanged despite the addition of two oil rigs in the Cana Woodford because two rigs were concurrently pulled out of basins that Baker Hughes doesn't track at the same time...Oklahoma also saw a natural gas rig pulled out of the Arkoma Woodford, while an oil rig was added in that basin at the same time, thus leaving the Arkoma Woodford unchanged...the last natural gas rig removal we haven't accounted for came out of a basin not tracked by Baker Hughes, which could have also been one of those pulled out elsewhere in Oklahoma...
+++++++++++++++++++++++++++++++++++++
Ohio Spars With Company Over Tax Break for Fracking Equipment -Bloomberg Tax - Stingray Pressure Pumping LLC and the Ohio tax commissioner are going head to head at the state’s high court in opposing briefs over which pieces of the company’s hydraulic fracturing equipment are exempt from sales and use tax. Tax Commissioner Jeffrey A. McClain assessed over $3.6 million in tax, interest, and penalties on 60 pieces of equipment Stingray bought for its fracking operations. The commissioner later canceled half of the assessments, finding the pieces of equipment they covered fell under the state’s exemption for equipment used “directly” in the production of oil and gas.
Fracking Equipment Taxable, Ohio Agency Tells State Justices – Law360 - An Ohio-based hydraulic fracturing company owes sales and tax on equipment purchased and not used directly in oil and gas production, the state Department of Taxation told the state Supreme Court...
Utica Shale Academy Donation -This past June, the EQT Foundation, the philanthropic extension of EQT Corporation, the nation’s largest natural gas producer, awarded the Utica Shale Academy a $25,000 grant to be used for the school’s heavy equipment operator and maintenance program. The academy, located in Salineville, provides a unique and vigorous learning environment through a specialized academic program which responds to employers’ and industries’ current and emerging and changing global workforce needs and expectations through business/school partnerships. “We are impressed with the work and dedication of the students and faculty at the Utica Shale Academy as they train the next generation of employees who will help to fuel and grow the energy industry here in Appalachia,”said Ellen Rossi, president of the EQT Foundation.
30 New Shale Well Permits Issued for PA-OH-WV Sep 5-11 | Marcellus Drilling News - Last week the three states with active Marcellus/Utica drilling, Pennsylvania, Ohio, and West Virginia, issued a collective 30 new drilling permits, down from the 40 permits issued the week before. PA roared back to life by issuing 21 of the 30 permits, with OH issuing just three and WV issuing six. Armstrong County, Ascent Resources, Butler County, CNX Resources, Coterra Energy (Cabot O&G), Elk County, Guernsey County, Indiana County,INR, Jefferson County (OH), Monongalia County, Ohio County, PennEnergy Resources, Seneca Resources, Snyder Brothers, Southwestern Energy, Susquehanna County,Utica Resource Operating, XTO
The dangers of Westmoreland’s proposed method of disposing of liquid landfill waste - I’m a science journalist and four years ago, I fell down the oil-field radioactivity rabbit hole. Here in Pennsylvania, a landfill applying for a permit with the state’s Department of Environmental Protection to evaporate liquid landfill runoff — called leachate — could create airborne radioactive material over people downwind. Every day across the nation, about 2.8 billion gallons of oil field brine are produced with toxic levels of salt, heavy metals, and the radioactive element radium. In Pennsylvania, levels have been recorded at up to 5,700 times EPA’s safe drinking water limit. Sludge that forms on the bottom of tanks and trucks that hold brine can be even richer in radium and can also contain exceptional amounts of radioactive lead. And with every Marcellus well, crushed rock and dirt called drill cuttings are bored out of black shale — a type of geologic formation the U.S. Geologic Survey reported in 1960 was so rich in uranium they thought about mining it, with the oil “considered as a possibly important byproduct.” All this waste must be handled, transported, and disposed of. My reporting has documented problems at every step. Brine is pumped deep underground at facilities called injection wells, which causes earthquakes. In Ohio, these wells are leaking. Sludge and drill cuttings are taken to treatment facilities where it’s often the task of improperly trained and inappropriately protected workers to mix in materials like lime in an attempt to solidify the material and lower the radioactive signature. If the radiation levels in the sludge decrease enough, the waste can be trucked to the same local landfills that handle household trash instead of being shipped by rail to radioactive waste disposal sites out west — a more expensive but safer option. At Westmoreland Sanitary in Belle Vernon, Pa., the Department of Environmental Protection told me from 2013 through 2017, 276,416 tons of oil-field waste were disposed. The landfill has also taken more than 200 tons of oil-field waste from an Ohio facility. An investigation I published last month revealed that workers are being dangerously exposed to radioactive sludge; I also found that railcars, which were being routed across the country to a disposal facility in the Utah desert, arrived at their destination leaking material. Costs of proper disposal are high and oversight is lax. A 1980 congressional exemption labeled oil-field waste nonhazardous despite many known hazards. As a result, the industry has regularly resorted to risky disposal measures, including disposing of oil-field brine at sewage treatment plants and spreading drilling waste on farm fields, a practice common in Oklahoma and Texas. For landfills that accept oil field waste, one big problem is leachate. For years, liquid landfill waste from Westmoreland flowed through a sewer pipe and into Belle Vernon’s sewage-treatment plant. In 2019, I met the plant’s superintendent, Guy Kruppa. He told me the stuff was so toxic that it was ruining his plant’s ability to treat sewage. Not only that, but it was also sending contaminants into the Monongahela River, a drinking water source. That same year, a judge ordered the landfill to halt the practice. The Department of Environmental Protection told me about 17 truckloads of leachate a day was instead being shipped to other sewage plants, an option that the agency said, “is not a preferred situation.” Last month, the Pittsburgh Tribune-Review reported that leachate had leaked into a local stream and the landfill didn’t immediately phone the Department of Environmental Protection or emergency management officials, as required by law. Liquid landfill waste clearly remains an issue, but we have two constantly moving bodies of fluids on this planet: water and air. If you can’t use water to carry away your waste for free, why not try the air? A leachate evaporator is a gas-fired boiler that will cook away the liquid landfill waste. A pair of treatment systems will remove 99% of the radioactivity, according to Westmoreland, relying in part on a device called a mist eliminator. But the science of precisely how this will be done is not clear and was not well explained during a hearing in early September. Yet, it’s of utmost importance, because the agency admits radium is the main radioactive element “of concern in the landfill leachate proposed for evaporation” and has found radium at levels dozens of times EPA’s safe drinking water limit at similar landfills.
Pennsylvania is just the latest sacrifice zone for the plastics industry - Sierra Club - DURING THE SUMMER OF 2018, two of the largest cranes in the world towered over the Ohio River. The bright-red monoliths were brought in by the multinational oil and gas company Shell to build an approximately 800-acre petrochemical complex in Potter Township, Pennsylvania—a community of about 500 people. In the months that followed, the construction project would require remediating a brownfield, rerouting a highway, and constructing an office building, a laboratory, a fracked-gas power plant, and a rail system for more than 3,000 freight cars. Five years after construction began at the site, Shell's complex, which is one of the biggest state-of-the-art ethane cracker plants in the world, is set to open. An important component of gas and a byproduct of oil refinery operations, ethane is an odorless hydrocarbon that, when heated to an extremely high temperature to "crack" its molecules apart, produces ethylene; three reactors combine ethylene with catalysts to create polyethylene; and a 2,204-ton, 285-foot-tall "quench tower" cools down the cracked gas and removes pollutants. That final product is then turned into virgin plastic pellets. Estimates suggest that a plant the size of the Potter Township petrochemical complex would use ethane from as many as 1,000 fracking wells. It is expected to emit up to 2.25 million tons of climate-warming gases annually, equivalent to approximately 430,000 extra cars on the road. It will also emit 159 tons of particulate matter pollution, 522 tons of volatile organic compounds, and more than 40 tons of other hazardous air pollutants. Exposure to these emissions is linked to brain, liver, and kidney issues; cardiovascular and respiratory disease; miscarriages and birth defects; and childhood leukemia and cancer. Some residents fear that the plant could turn the region into a sacrifice zone: a new "Cancer Alley" in Beaver County, Pennsylvania."I'm worried about what this means for our air, which is already very polluted, and for our drinking water," said Terrie Baumgardner, a retired English professor and a member of the Beaver County Marcellus Awareness Community, the main local advocacy group that fought the plant. Baumgardner, who is also an outreach coordinator at the Philadelphia-based nonprofit environmental advocacy group Clean Air Council, lives near the ethane cracker. In addition to sharing an airshed with the plant, she is one of the approximately 5 million people whose drinking water comes from the Ohio River watershed. When Shell initially proposed the petrochemical plant in 2012, she and other community advocates tried their best to stop it. And the plant's negative impact will go far beyond Pennsylvania. Shell's ethane cracker relies on a dense network of fracking wells, pipelines, and storage hubs. It's one of the first US ethane crackers to be built outside the Gulf of Mexico, and one of five such facilities proposed throughout Appalachia's Ohio River Valley, which stretches through parts of Ohio, Indiana, Kentucky, Pennsylvania, and West Virginia. If the project is profitable, more like it will follow—dramatically expanding the global market for fossil fuels at a time when the planet is approaching the tipping point of the climate crisis. For the residents who live nearby, Shell's big bet on plastic represents a new chapter in the same story that's plagued the region for decades: An extractive industry moves in, exports natural resources at a tremendous profit—most of which flow to outsiders—and leaves poverty, pollution, and illness in its wake. First came the loggers, oil barons, and coal tycoons. Then there were the steel magnates and the fracking moguls.
PA Stubbornly Continues to Try and Grab Hydrogen Hub for Itself | Marcellus Drilling News - Pennsylvania is stubbornly continuing to pursue a $2 billion hydrogen hub (part of the Biden infrastructure bill) on its own, without partnering with other Marcellus/Utica states. As we continue to point out, doing the application process alone jeopardizes attracting the project to our region. Yesterday the Pennsylvania House Environmental Resources and Energy Committee held a public hearing on hydrogen’s potential as an energy source. The opening presenter, Richard DiClaudio, president and CEO of the Energy Innovation Center Institute in Pittsburgh, made the case that hydrogen and the hydrogen hub is important to the future of southwestern PA.
Lancaster Sisters of the Corn Still Trying to $hake Down Williams | Marcellus Drilling News - The Catholic nuns of Lancaster County’s Adorers of the Blood of Christ are still, all these years later, trying to shake down Williams for more money because of a pipeline that runs underneath a cornfield owned by the sisters (hence our nickname for them). Using lawyers from Big Green groups, the nuns are arguing their “religious beliefs” were offended by the pipeline because it flows a nasty, filthy fossil fuel that causes global warming. Even though the sisters own and operate a home heated by natural gas at the same location! Williams should be suing the nuns, not the other way around.
Manchin deal might not save Mountain Valley pipeline - The Mountain Valley pipeline may never be finished — even if Sen. Joe Manchin’s permitting revamp becomes law.Legislation from the West Virginia Democrat could give a boost to the beleaguered project by steering legal challenges to a different court. But regulatory experts caution that the proposal, as described by Manchin, won’t guarantee the project gets completed.“It doesn’t necessarily direct an outcome,” said Ted Boling, a former longtime career federal official who served as associate director at the White House Council on Environmental Quality (CEQ) under former President Donald Trump. Boling is now a partner at Perkins Coie LLP.The Mountain Valley pipeline, or MVP, is intended to carry natural gas more than 300 miles from northern West Virginia to southern Virginia. Approved in 2017, it is years behind schedule after environmental groups successfully challenged many of its federal permits in court. Manchin wants to free the project from the legal thicket. But Manchin’s initial plan didn’t appear to free it from all legal challenges.By contrast, the Republican permitting proposal rolled out Monday would direct an outcome. Announced by West Virginia Republican Sen. Shelley Moore Capito, it says Mountain Valley’s new permits would not be “subject to judicial review.”And “judicial review” is what has stymied MVP. In particular, the project has been slowed by the reviews of a three-judge panel at the 4th U.S. Circuit Court of Appeals. The delays have caused some investors to question whether the pipeline can be completed.Unlike Capito, Manchin has not released specific legislative language for his proposal. When he announced his agreement on permitting last month with Senate Majority Leader Chuck Schumer (D-N.Y.), the summary he releasedhad two basic elements related to MVP.First, his plan would direct agencies to “take all necessary actions” to issue new permits for the pipeline. And it would give all jurisdiction on any further litigation to a different court: the U.S. Court of Appeals for the District of Columbia Circuit.The order to the agencies wouldn’t ensure the permits could survive court challenges. And while the D.C. Circuit might be more favorable, analysts said directing future challenges there implies that there will be more legal battles.MVP has a poor record before three judges at the 4th Circuit who have been hearing cases on the project. They have canceled the project’s federal permits, saying the underlying federal reviews have not complied with environmental laws. Attorneys for Mountain Valley’s developers have pleaded in court filings unsuccessfully for a new slate of judges.In January, the 4th Circuit vacated approvals from the Forest Service and Bureau of Land Management that would have allowed the pipeline to cross 3.5 miles of the Jefferson National Forest (Energywire, Jan. 26). The two agencies are working together on a new environmental review. The same three judges — Chief Judge Roger Gregory, Judge James Wynn and Judge Stephanie Thacker — are expected to handle cases over the pipeline’s state water certifications. The D.C. Circuit has been more favorable at times. It upheld FERC’s 2017 approval of the project and rejected challenges to the agency’s approval for an extension of time to complete the project. But in another pipeline case, the court ruled against the Dakota Access pipeline last year, requiring a new environmental review of the project. However, in that same case, the court overturned a district judge’s order to shut down the pipeline and drain it of oil (Energywire, Feb. 23). And D.C. Circuit judges grilled FERC in April about its handling of Mountain Valley, asking why the agency had not done more to review the “profoundly changed circumstances” after state officials found numerous environmental violations.
Fatal Tetco Incident in 2019 Said Combination of Pipeline Defect, Degraded System - A manufacturing defect, a degraded coating and an ineffective corrosion prevention system contributed to a fatal explosion and fire on Enbridge Inc.’s Texas Eastern Transmission (Tetco) natural gas pipeline near Danville, KY, the National Transportation Safety Board (NTSB) said Wednesday. The August 2019 Tetco Line 15 rupture and subsequent fire caused one death and sent six people to the hospital. NTSB noted the incident burned about 30 acres of land, destroyed five homes and damaged 14 other residences. The accident also raised market concerns about potential limits on Appalachian Basin gas flows reaching the Gulf Coast. Investigators concluded “that the combination of a pre-existing manufacturing defect – known as a hard spot – together with a degraded pipeline coating and ineffective cathodic protection, led to hydrogen-induced cracking at the outer surface of the pipe.” Cathodic protection, aka CP, is an electrochemical method for controlling corrosion of pipelines and other metal surfaces. According to NTSB, Enbridge’s integrity management program contributed to the accident by failing to accurately assess the 30-inch diameter pipeline’s condition or estimating the risk from interacting threats. NTSB said its accident report concluded that “Enbridge underestimated the risk posed by hard spots because its processes and procedures were inconsistent” with Pipeline and Hazardous Materials Safety Administration (PHMSA) guidance, as well as “industry knowledge of hard spot threat interaction.” To compensate for increased external corrosion, Enbridge and previous owners of the system increased CP voltages on the affected pipeline segment, noted investigators. NTSB’s report recommended six safety measures, with three directed to Enbridge and three to PHMSA, tied to evaluating gas flow change risks, in-line inspection data analysis limitations, threat assessments and threat interactions, and training and requalification practices.
Manufacturers push regulators for more natural gas pipelines -Manufacturers told lawmakers Friday that federal agencies should have a responsibility to secure reliable and affordable access to natural gas, mainly through a dramatic growth in pipeline infrastructure.A letter released Friday envisions an industry-oriented course correction at the Federal Energy Regulatory Commission and the North American Electric Reliability Corp. — one that sees the agencies turn from slow-walking regulators to active proponents of new infrastructure.“For decades, the current system has worked well. When pipeline capacity was needed, pipeline companies filed permits to the FERC and for the most part, the pipelines were approved and built without much delay,” wrote Paul Cicio, CEO of Industrial Energy Consumers of America.“That is no longer the case.”The letter argues a transformation is necessary because of the dire energy situation U.S. manufacturers find themselves in.Manufacturers, which have long used natural gas for fuel and as a raw material, have been particularly slammed by the rising costs and have to compete with utilities and LNG export facilities for the fuel.IECA is particularly concerned over natural gas prices heading into winter, when increased demand from utilities and export facilities for heating and power generation may strain existing pipeline capacity even further and skyrocket what they see as already untenable prices.FERC and NERC, Cicio argues, have an obligation to step in and ensure adequate pipeline capacity to fulfill the national imperatives of reliable energy and electricity.“The FERC’s responsibility needs to shift from being a regulator of pipeline permits to having responsibility to ensure that the pipelines that are needed will get built to secure our nation’s reliability,” wrote Cicio.He also said FERC should coordinate with power generators to potentially keep nuclear power plants or even coal-fired power plants online until more natural gas is available to all ratepayers.U.S. manufacturers have been sounding the alarm on natural gas infrastructure since February and have also called for gas export bans to shore up domestic supply (Energywire, July 28)Senate Energy and Natural Resources Chair Joe Manchin’s yet-to-be-released permitting reform package would in theory help natural gas infrastructure projects get quick regulatory authorization and hasten construction times (E&E Daily, Sept. 9). However, there is still stringent opposition from environmentalists and some Democrats to new natural gas projects. On Thursday, activists from Indigenous and front-line communities rallied in a Capitol Hill park and called on lawmakers to oppose permitting reforms and new natural gas projects.
Revealed: rightwing US lobbyists help craft slew of anti-protest fossil fuel bills - Republican-led legislatures have passed anti-protest laws drafted by an extreme-right corporate lobbying group in a third of all American states since 2018, as part of a backlash against Indigenous communities and environmentalists opposing fossil fuel projects, new research has found.The American Legislative Exchange Council (Alec) helped draft legislation criminalizing grassroots protests against pipelines, gas terminals and other oil and gas expansion projects in 24 states, under the guise of protecting critical infrastructure.Alec, which is funded by rightwing state lawmakers, corporate sponsors and trade groups, and wealthy ideologues, creates model legislation on a range of conservative issues such as gun control, abortion, education funding and environmental regulations.The laws were passed in 17 Republican-controlled states, including Oklahoma, North and South Dakota, Kansas, West Virginia and Indiana, where protesters now face up to 10 years in prison and million-dollar fines, according to a new report from the non-profit Climate Cabinet.The anti-protest bills, which were rolled out in response to the success of mostly Indigenous-led campaigns slowing down fossil-fuel infrastructure projects, have used intentionally vague language to create a chilling effect on free speech and assembly – both constitutionally protected rights, according to the report Critical Infrastructure Laws: A Threat to Protest & the Planet.“Indigenous-led demonstrations opposing fossil-fuel projects have been one of the most successful and effective forms of climate action to date … in an affront to the protected freedoms of our constitution, state legislatures have found a new legislative mechanism to oppress frontline communities and cause further harm and destruction to our planet,” said Jonathon Borja, co-author of the report.The first so-called critical infrastructure bills originated in Oklahoma in 2018, where the Republican state representative Scott Biggs referenced North Dakota’s Dakota Access pipeline (DAPL) protests and acknowledged that some anti-pipeline demonstrations had succeeded. “[The bill] is a preventative measure … to make sure that doesn’t happen here.”Other states followed after Alec created a model bill for lawmakers to copy. So far, the bills have not passed in any states where Democrats hold a majority in at least one legislative chamber, though some Democrats have voted in favor of them.In most of the bills, protesters, like those who participated in the DAPL demonstrations, could now face felony charges, while those charged with “aiding” protests could face harsh fines.
U.S. natgas futures rebound in choppy trade despite bearish outlook - U.S. natural gas futures rose in choppy trading on Monday, buoyed by technicals and slightly lower production estimates for the week, although elevated overall output and lower consumption forecasts clouded the outlook. Front-month gas futures NGc1 for October delivery rose 28.6 cents, or 3.6%, to $8.28 per million British thermal units (mmBtu) by 11:17 a.m. EDT (1517 GMT), reversing some declines from earlier in the session. The contract fell about 9% last week, its biggest weekly loss since late June and the first time it fell for three weeks in a row since early July. Data provider Refinitiv projected average gas output in the U.S. Lower 48 states at 98.9 billion cubic feet per day (bcfd) for the current week, slightly lower than the 99.3 bcfd in the prior week. But this was well above the five-year average of 87 bcfd. However, some analysts said there did not seem to be any clear fundamental driver at this point for the current uptick, although a break above technical resistance seemed to trigger fresh buying. So far this year, gas futures were up about 124% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia’s Feb. 24 invasion of Ukraine. The rise in gas futures, meanwhile, came despite the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. Dutch wholesale gas prices, meanwhile, fell on comfortable supply and storage levels while prompt British prices rose in expectation of higher demand over the weekend. Last week, gas speculators increased net short positions by 27,316 contracts to 49,387 on the New York Mercantile and Intercontinental Exchanges, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report. .
Natural Gas Futures Extend Win Streak Amid Lingering Domestic, Global Supply Concerns - Natural gas futures on Monday advanced for a third consecutive session, propelled by festering worries about winter storage inadequacy. The October Nymex gas futures contract jumped 25.3 cents day/day and settled at $8.249/MMBtu. November rose 24.3 cents to $8.287. NGI’s Spot Gas National Avg. followed suit, gaining 18.5 cents to $7.620.“The storage situation is definitely not going away – unless we start to get a lot bigger injections over the next few weeks,” StoneX Financial Inc.’s Thomas Saal, senior vice president of energy, told NGI. The U.S. Energy Information Administration (EIA) last Thursday reported an injection of54 Bcf natural gas into storage for the week ended Sept. 2.The result fell short of the five-year average build of 65 Bcf and left stocks well below historic norms. Working gas in storage rose to 2,694 Bcf, according to EIA. However, stocks were 222 Bcf lower than a year earlier and 349 Bcf below the five-year average.Saal noted that production rose notably in recent weeks to meet both strong domestic demand and elevated calls from Europe and Asia for U.S. exports. At the same time, he said, cooling demand is fading as fall weather emerges in northern regions.“Even so, we may need to see even more production increases,” Saal said. “Overall demand is going to stay high because the growth in LNG is real and looks likely to last” into next year and beyond.
U.S. natgas futures edges up on threat of railroad strike (Reuters) - U.S. natural gas futures edged up to a fresh a one-week high on Tuesday on worries a possible railroad strike could threaten coal supplies to power plants, which could force generators to burn more gas to produce electricity. The White House made contingency plans seeking to ensure deliveries of critical goods in the event of a shutdown of the U.S. rail system while again pressing railroads and unions to reach a deal to avoid a work stoppage affecting freight and passenger service. "Market players ... fixated on the potential for U.S. coal supplies to be threatened amid a looming strike by the U.S. railroad union workers later this week," analysts said, noting the market ignored several bearish factors. Those bearish factors included record output, forecasts for lower demand next week than previously expected and the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. Front-month gas futures rose 3.5 cents, or 0.4%, to settle at $8.284 per million British thermal units (mmBtu), their highest close since Sept. 2 for a second day in a row. That also put the contract up for a fourth day in a row for the first time since May. So far this year, gas futures are up about 123% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading around $56 per mmBtu in Europe and $53 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states have risen to 93.1 bcfd so far in September from a record 98.0 bcfd in August. With the coming of cooler autumn weather, Refinitiv projected average U.S. gas demand, including exports, would slip from 93.1 bcfd this week to 92.7 bcfd next week. The forecast for next week was lower than Refinitiv's outlook on Monday.
Natural Gas Prices Surge Wednesday Across Futures, Cash Markets - Boosted by late-season heat, domestic storage concerns and robust global demand, natural gas futures on Wednesday rallied for a fifth-straight session. The October Nymex gas futures contract spiked 83.0 cents day/day and settled at $9.114/MMBtu, marking its biggest jump in the latest bull run. November gained 83.3 cents to $9.167. NGI’s Spot Gas National Avg. rose 28.0 cents to $8.155, extending its rally to three days amid a reemergence of summer warmth in the nation’s midsection. The natural gas market has been moving “from strength to strength,” analysts at Evercore ISI said Wednesday They noted robust demand for U.S. LNG exports – hovering near capacity – as Europe scrambles to ward off an energy crisis hastened by Russia’s war in Ukraine. Russia, long a key supplier of gas to the continent, has cut off the bulk of its pipeline deliveries to countries throughout Europe. Asian countries are now ramping up calls for liquefied natural gas as they move with haste to fortify supplies ahead of winter. What’s more, the Evercore team noted, coal-to-gas switching in the power sector continues to mount as the United States steadily retires coal plants. And, of course, seemingly endless summer heat continues to scorch much of the country into mid-September. Markets as far north as the Dakotas are forecast to endure highs in the 90s this week, keeping air conditioners cranking at the level once reserved for brief bouts from July to early August. “We must acknowledge the strong support for both higher LNG send-outs” and “even more significantly a hot summer,” the Evercore analysts added. Rystad Energy’s Zongqiang Luo, senior analyst, expects both continued strong domestic gas consumption and enduring demand for LNG. He, too, noted fallout from Russia’s actions and expectations that Europe will need as much American LNG as it can get to ensure adequate supplies for the coming winter. “Months of geopolitical wrangling have left the European gas market whiplashed, with volatile prices stemming from lack of supply, potential market intervention, and wider uncertainty,” Luo said. “In the view of most experts and policymakers,” the European gas market “is broken. But how it should be supported or fixed is an ongoing conversation with no clear resolution in sight.” NatGasWeather noted that a threatened rail strike in the United States may also have boosted bullish sentiment in the market. More notably, forecasts continue to show persistent heat. “The overnight data maintained unseasonably strong upper high pressure expanding to rule much of the U.S. next week, Sept. 18-22, resulting in widespread above normal temperatures,” NatGasWeather said Wednesday.
Natural Gas Futures Plummet After Negotiators Avert Railway Strike, EIA Prints Bearish Storage Print - Natural gas futures snapped a five-day rally and plunged in Thursday trading. The October Nymex gas futures contract fell 79.0 cents day/day and settled at $8.324/MMBtu after officials said a railway strike had been avoided and the latest government inventory report proved bearish. The prompt month had jumped 83.0 cents on Wednesday, the biggest gain in the multi-day rally. The November contract also dropped Thursday, shedding 79.5 cents to $8.372. NGI’s Spot Gas National Avg. followed suit and fell 49.0 cents to $7.665. The sell-off came amid reports Thursday that an agreement had been reached to avert a rail workers strike. “Disrupted freight rail lines could have snarled supply chains and cost the U.S. economy an estimated $2 billion per day,” “In the energy sector, disrupted freight coal transportation could have further strained precariously low coal inventories, leading coal operators to conserve scarce supplies, reduce coal generation, and increase the call on power sector gas demand.” However, President Biden on Thursday announced a tentative agreement to avert a walkout, alleviating coal delivery concerns and worries about economic fallout. The U.S. Energy Information Administration’s (EIA) latest storage report, meanwhile, furthered the case for bears. EIA printed an injection of 77 Bcf natural gas into storage for the week ended Sept. 9. The build kept inventories below average levels, but analysts on the online energy platform Enelyst said it reflected mounting production levels that could help narrow deficits as the market moves into shoulder season. Production early this month reached record levels above 100 Bcf/d, according to Bloomberg estimates, and output continued to hold near that level Thursday. The print also eclipsed market expectations. Prior to the EIA report, major polls found analysts expecting a slightly bullish result relative to the five-year average, with median estimates in the low 70s Bcf. The build in the comparable week of 2021 was 78 Bcf and the five-year average was 82 Bcf, according to EIA. The 77 Bcf injection for last week lifted inventories to 2,771 Bcf, though stocks remained below the year-earlier level of 2,994 Bcf and the five-year average of 3,125 Bcf. Looking ahead, however, analysts on Enelyst were looking for a build with next week’s print as high as the low 100s, citing the production increase. If that proves to be the case, it would mark only the second triple-digit increase of the current injection season and could put the market on track for adequate supplies ahead of winter.
US natgas drops 7% to 5-wk low on record output, global price drop (Reuters) - U.S. natural gas futures dropped about 7% to a five-week low on Friday with output holding near a monthly record and as global gas prices slumped. In what has already been a volatile week, that U.S. price decline came after prices dropped about 9% on Thursday due to a tentative deal to avert a rail strike and on a bigger-than-expected storage build last week. On Wednesday, prices soared about 10% on worries about the potential rail strike. In addition to rising output, the drop in U.S. gas prices also came on expectations demand would decline when the Cove Point liquefied natural gas (LNG) plant in Maryland shuts for a couple weeks of maintenance in October. U.S. gas demand has already been reduced for months by the ongoing outage at the Freeport LNG export plant in Texas which has left more gas in the United States for utilities to inject into stockpiles for next winter. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. Front-month gas futures fell 56.0 cents, to settle at $7.764 per million British thermal units (mmBtu), their lowest close since Aug. 8. That put the front-month down about 3% for the week, marking the first time the contract fell for four weeks in a row since March. So far this year, gas futures are up about 109% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading around $55 per mmBtu in Europe and $42 in Asia. That was a 12% drop for European futures. The average amount of gas flowing to U.S. LNG export plants rose to 11.3 bcfd so far in September from 11.0 bcfd in August. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. Cove Point LNG in Maryland usually shuts in October for a couple weeks of maintenance. Separately, some traders noted Typhoon Nanmadol could cause some LNG demand destruction after it hits Japan over the weekend. The reduction in exports from Freeport has been a problem for Europe, where most U.S. LNG has gone this year as countries there wean themselves off Russian energy.
Looming rail strike sparks fear of energy chaos - Energy companies are warning that a threatened nationwide rail strike already is wreaking havoc on their supply chains and may cause severe bottlenecks across multiple industries, including coal, chemicals and oil and gas. U.S. freight railroads and unionized workers have been unable to reach a new contract over pay and benefits, and a strike could occur as early as Friday, the end of a federally-mandated cooling-off period between the two sides. Railroad companies have already begun curtailing shipments of hazardous chemicals such as chlorine and anhydrous ammonia to make sure they’re not stranded if workers walk off the job. That, in turn, is disrupting operations at refineries, chemical plants and other facilities, setting up the possibility that even a short strike could cause the shut down of some plants, companies say. In that scenario, fuel prices for consumers would spike and could also disrupt the broader economy at a time when inflation is eating into Americans’ household budgets. “A shutdown would have a tremendous impact on our supply chain,” White House press secretary Karine Jean-Pierre said Tuesday. “It would have a ripple effect into our overall economy and American families.” She added that President Joe Biden has personally been calling union workers. Biden appointed a commission in July to facilitate negotiations between companies and labor leaders that has yet to resolve the disagreement. Trade groups representing oil producers and the chemical industry have called on Congress to step in if the two sides can’t solve the dispute. But on Tuesday, when asked if congressional Democrats would support a resolution preventing a strike, Senate Majority Leader Chuck Schumer (D-N.Y.) said, “The bottom line is we are urging both sides to come together and come to an agreement —period.” Refiners and chemical manufacturers rely on railroads to bring in raw materials and transport finished products. Most crude oil is transported by pipeline, but refineries still rely on rail for supplies like isobutane used in gasoline and to carry away byproducts like sulfur, according to Rob Benedict, vice president of midstream and chemicals at the American Fuel and Petrochemical Manufacturers (AFPM). Chemicals make up the second-largest category of rail freight after coal — 55,000 carloads a week — and there aren’t enough trucks and barges to handle the volume, said Jason Miller, a professor in the department of supply chain management at Michigan State University. A prolonged strike would have a bigger impact on the economy than the shutdowns during the Covid-19 pandemic, Miller said. “At least during Covid, you able to keep [chemical] production going, oil production going,” he said. “You can’t do that with a rail strike.”
Louisiana plastics plant shot down by judge - A proposed $9.4 billion plastics plant received another body blow Wednesday, after a Louisiana state judge vacated 14 state permits and lambasted regulators for failing to live up to their "constitutional public trust duty."The ruling is a clear environmental justice win for residents of Welcome, La., a small community with a 99 percent minority population, 87 percent of whom identify as Black.That town, and the plant's impact on the land and the families living off it, was foremost in Judge Trudy White's 34 page ruling. "The blood, sweat and tears of their ancestors is tied to the land," White wrote, noting that Welcome's demographics reflect its roots as a place once dominated by plantations and now populated by descendents of slaves who worked those plantations.In the ruling, White cited Sharon Lavigne, director of RISE St. James, a local advocacy group, and winner of the 2021 Goldman Environmental Prize: "These are sacred lands. They were passed down to Black residents from their great-great-great grandparents who worked hard to buy these lands along the Mississippi to make them productive and pass them on to their families."The giant facility would have used ethane and propane as feedstock to ultimately make a variety of products used in plastics manufacturing. The project has been on hold since November 2020, when the federal government suspended a permit amid protests from local environmental groups.White agreed with those groups in her 34-page ruling, saying the state did not do enough to protect the health and well-being of its residents. Regulators technically followed the rules in issuing permits, White wrote, but "the constitutional public trust duty imposes an additional legal standard.""It demands [The Louisiana Department of Environmental Quality] go beyond its regulations if necessary to avoid potential environmental harm to the maximum extent possible" (emphasis in the original).A 2019 analysis by the nonprofit news site ProPublica estimated that the air around Formosa’s site is more toxic with cancer-causing chemicals than 99.6% of industrialized areas of the country. The plant's proposed emissions, the publication concluded, could triple levels of cancer-causing chemicals in one of the most toxic areas of the U.S.
Proposed Louisiana Petrochemical Projects Facing Hurdles from Residents, Court -Two major petrochemical projects planned for Louisiana’s St. James Parish are facing permitting obstacles following recent decisions that may affect them moving forward. A court ruling has stalled FG LA LLC’s plan to build a massive $9.4 billion plastics facility. The affiliate of global conglomerate Formosa Group has had the Sunshine Project on the drawing board since 2015. The Louisiana Department of Environmental Quality (LDEQ) had issued air permits in early 2020. However, the 19th Judicial District Court in East Baton Rouge Parish found that LDEQ erred in issuing air permits and violated the constitutional rights of petitioners. Several community and environmental groups had challenged LDEQ’s decision to issue the permits, citing, among other things, its location, which would be adjacent to the predominantly (87%) Black community of Welcome. The lawsuit was filed in 2020 by RISE St. James, Louisiana Bucket Brigade, Sierra Club, Center for Biological Diversity, Healthy Gulf, Earthworks and No Waste Louisiana. They alleged that LDEQ’s decision to issue the permits violated the federal Clean Air Act, state laws and the Louisiana constitution. In the FG case, Judge Trudy White vacated 15 state air permits that had been issued for the Sunshine Project, siding with the plaintiffs. White wrote that LDEQ was in violation of state and federal regulations. LDEQ’s reasoning for issuing the permits was “arbitrary and capricious,” the judge wrote. LDEQ issued permits under the federal Prevention of Significant Deterioration (PSD) New Source Review regulations. PSD permits authorize major sources of criteria pollutants, as well as noncriteria regulated pollutants in areas that attain federal standards. “FG LA failed to demonstrate that its emissions would not ‘cause or contribute to’ violations of the federal air standards,” White said. “LDEQ’s decision to issue the PSD permit anyway violated the Clean Air Act permitting law the agency was obligated to apply.” In addition, White wrote that the siting involved environmental justice issues, “The demographics of Welcome reflects its roots as a place once dominated by plantations, populated by the enslaved ancestors of present-day residents.” The case has been remanded to LDEQ, which has 60 days to appeal.
Natural gas pipeline fire in water SE of New Orleans - Federal agencies are investigating a natural gas pipeline explosion that started a towering blaze in a lake southeast of New Orleans. The line exploded shortly before 4 p.m. Thursday in Lake Lery and the fire was out by about 4:45 p.m. Friday, the Coast Guard said. Preliminary information indicates a barge broke loose from its mooring and hit the pipeline, according to the federal Pipeline and Hazardous Materials Safety Administration. “The pipeline has been shut down and the affected section of pipe has been isolated. Remaining gas will be allowed to burn off,” said a statement from the agency, part of the Department of Transportation. Nobody was hurt by the rupture and fire, the Coast Guard said in a news release Thursday night. There was a silver sheen Friday on the water between St. Bernard and Plaquemines parishes, Coast Guard spokesperson Riley Perkofski said in an email. It is expected to dissipate, the Coast Guard said Friday evening. Continuous monitoring by Environmental Safety & Health Consulting Services didn't find any air pollution, a news release said. The pipeline is owned by Third Coast High Point Gas Transmission, Perkofski wrote. Third Coast, which is based in Houston, did not return a call for comment.
The Oilfield That Made the Ocean Burn Last Year Is Now Spewing Methane - A huge oilfield in the Gulf of Mexico, which caused a hellish fire in the ocean last year, has been releasing massive amounts of planet-warming methane. Reuters reported last week on satellite data that shows that the Ku-Maloob-Zaap oilfield leaked 44,064 tons of methane into the atmosphere over the course of 24 days in August. That’s the equivalent of 3.7 million tons of carbon dioxide—what 653,106 homes emit by using electricity over the course of one year.Researchers with the European Space Agency found that the platform released around the same amount in another ultra-emission event in December 2021. That’s around 3% of Mexico’s average annual emissions.“In December, the flaring shut down, and they were venting gas almost constantly for 17 days,” Itziar Irakulis-Loitxate, a scientist from the Polytechnic University of Valencia and the lead author of the paper, told Reuters. “This time, however, they have been venting and flaring gas intermittently during the whole month.”If the platform’s unusual name rings any bells, it’s probably because this is the oilfield that dramatically caught fire last summer, making images of a doomsday-looking crater of flame on the ocean go viral. The fire began after an underground pipeline ruptured. The platform is owned by Pemex, Mexico’s state-owned and operated oil and gas company. While neither Reuters nor the ESA researchers could confirm the cause of either methane leak, previous reports suggest Pemex has a long history of not taking care of its aging oil and gas infrastructure, including at Ku-Maloob-Zaap. There were around 100 deaths attributable to accidents on Pemex sites between 2010 and 2017, according to research firm Statista.
Tellurian investor demands sale of LNG company, claiming nepotism - — A Tellurian Inc. investor is urging the would-be U.S. energy exporter to put itself up for sale, saying poor governance, nepotism and “misleading communications” have doomed the company’s $12.8 billion aspiration to ship shale gas overseas. Entami Corp., which specializes in event-driven and distressed-debt investing, called for a sale of the company founded six years ago by liquefied natural gas entrepreneur Charif Souki. In a letter to Souki and his management team, Entami Chief Investment Officer Achur Iskounen said Tellurian lacks the expertise, financial heft and “institutional credibility” to build and operate its proposed LNG-export complex.Although Entami’s self-declared stake in Tellurian amounts to just 1.5% of outstanding common stock, the pushback by a small investor highlights the challenges Souki’s team is facing in finding backers for the Driftwood LNG project in Louisiana. The company recently sweetened the terms of a risky debt deal that would kickstart financing, promising an eye-popping 12.5% yield and offering shale fields as collateral. Souki has “deluded and diluted shareholders,” established “unattainable” milestones and engaged in “misleading communications over the last year” while raising capital through debt and equity sales, Iskounen wrote. “A timely sale of Tellurian has become the only logical path to protect Shareholder value.”Iskounen cited “very serious questions of nepotism” and governance lapses. He singled out the chairman’s son, Tarek Souki, who as executive vice president of marketing and trading “draws a Salary larger than our CFO,” according to the letter.Tellurian didn’t respond to multiple requests for a response or make either of the Soukis available for comment. Iskounen, reached by email, declined to comment beyond the contents of his letter. In a 2013 Barron’s article, he was leading a startup called Iskounen & Co. that had $5 million under management and was shorting Apple Inc. “Tellurian is falling behind peers who are expanding capacity at their fastest pace ever,” he wrote in the letter to Tellurian. The company ought to sell itself to a major energy company with “the balance sheet and institutional credibility necessary to commission this geopolitically critical LNG project.”.
U.S. Seeks to Restore Safety Rules Sparked by Gulf Oil Spill --The Biden administration on Monday proposed offshore drilling safety measures that it said would help prevent oil spills and protect workers and the environment. The proposal aims to restore safety provisions put in place by the Obama administration in 2016 following the fatal 2010 BP Deepwater Horizon spill, the worst in United States history. The Trump administration had revised the rules in 2019 to reduce what the oil and gas industry said was a financial burden. The Interior Department, which oversees the Bureau of Safety and Environmental Enforcement (BSEE), said the changes would incorporate the latest industry technology improvements. “As our nation transitions to a clean energy economy, we will continue strengthening and modernizing offshore energy standards and oversight,” Interior Secretary Deb Haaland said on a call with reporters. “We will continue to put the lives and livelihoods of workers first, as well as the protection of our waters and marine habitat.” The rule revisions would tighten technical requirements of blowout prevention systems and mandate speedier failure investigations. They also require companies to submit failure data directly to BSEE rather than to third parties. The proposal is open to public comment until Nov. 14. Oil industry trade group the National Ocean Industries Association said it would review the proposal and work with federal regulators to ensure that the changes increase safety. Environmental group Oceana reacted to the proposal by calling for the end to offshore drilling. “While the new safety measures being proposed are a step in the right direction, no operator can promise there won’t be another disaster like BP’s Deepwater Horizon blowout,” Oceana campaign director Diane Hoskins said in an emailed statement.
Biden proposes strengthening offshore drilling safety regulations loosened by Trump - The Biden administration on Monday proposed to strengthen certain safety regulations for offshore oil and gas drilling that were loosened under the Trump administration. After the 2010 Deepwater Horizon oil spill that killed 11 workers and released 134 million gallons of fuel into the Gulf of Mexico, the Obama administration implemented new safety regulations. In 2019, the Trump administration revised those standards, making them more industry-friendly. On Monday, the Interior Department indicated that it would further tweak the rules, although the new proposal does not appear to be identical to what was put forth during the Obama years. Interior Secretary Deb Haaland told reporters on Monday that she believes that the changes will “improve conditions for offshore workers and the public.” She criticized the Trump administration’s rollback of the Obama-era rule, saying that it was done to “tip the balance of oversight of offshore activities back to the oil and gas industry.” Among the changes is the reinstatement of a requirement to send information on safety equipment failures to the federal government instead of to certain third parties that were permitted to collect data during the Trump years. Under the new rule, inspections of such failures will also need to start sooner. Under the Trump administration, inspections needed to begin 120 days after a failure; they would now need to start in 90. Under the Obama rule, inspections had to be finished within 120 days. The Biden administration estimates that the changes will cost between $2.2 million and $2.4 million over a 10-year period. The move comes after the Environmental Protection Agency similarly reinstated safety standards for chemical plants that were also loosened under Trump.
Administration awards Gulf of Mexico drilling leases to oil giants - The leases from a 2021 sale were given to oil and gas companies as part of a deal with Sen. Manchin over climate legislation. The Biden administration on Wednesday reinstated $190 million worth of leases to companies bidding to explore for oil and gas in the Gulf of Mexico, despite widespread concerns about accelerating climate change. The Bureau of Ocean Energy Management granted the 307 oil and gas leases as part of a compromise that won support last month from Sen. Joe Manchin III (D-W.Va.) for the Inflation Reduction Act and its roughly $369 billion in climate-related spending and tax credits.The Lease Sale 257, which had been held in November 2021, had been invalidated by a federal judge in February.On Wednesday, the Biden administration sought to stress that the sale would “protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential ocean user conflicts.”Gulf of Mexico federal offshore oil production accounts for 15 percent of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 5 percent of total U.S. output, according to the Energy Information Administration. And the gulf was the scene of the massive Deepwater Horizon oil spill in 2010, a rig that was operating on behalf of BP.Chevron submitted the highest sum of winning bids at $47 million. Other major successful bidders included Anadarko, BP, Shell and Exxon Mobil.The Inflation Reduction Act specifies how the administration should deal with lease sales in the Gulf of Mexico. It instructs the administration to hold another lease sale for oil and gas alone. Subsequently, the bill says, there will be sales of oil and gas leases coordinated with lease sales of renewable energy from wind turbines.Democrats have been divided over oil and gas lease sales with President Biden, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles E. Schumer (D-NY) all supporting them as part of the compromise with Manchin.
Agency OKs nearly $190M in bids from offshore oil lease sale - (AP) — The Biden administration accepted nearly $190 million Wednesday in bids from an offshore oil and gas lease sale that was held nearly a year ago but rejected by a federal judge.The Bureau of Ocean Energy Management’s action was required by the climate bill that was signed Aug. 16 — a disappointment to environmentalists who worry about the climate impacts of offshore drilling, but praised by industry as a return to longstanding practice after an 18-month delay imposed by the Biden administration.The bill had a 30-day deadline for accepting the bids. It also requires the bureau to reschedule three sales that had been put on hold by a moratorium ordered by President Joe Biden, with the first of them to be held by Dec. 31. “We are pleased that the Department of the Interior has finally offered the first offshore leases of this administration, but it is disappointing that it took 19 months and an act of Congress to get us to this point,” said Cole Ramsey, vice president of upstream policy for the American Petroleum Institute. The Bureau of Ocean Energy Management said Wednesday that it had accepted 307 valid high bids totaling just under $189.9 million from the November 2021 sale “in compliance with congressional direction.” Companies bid on about 2% of the tracts offered for sale in the Gulf of Mexico.
How oil companies could thrive under the climate law - At first glance, the Inflation Reduction Act would seem like a financial problem for the U.S. oil and gas industry. The fine print suggests otherwise.The bill, signed into law by President Joe Biden last month, imposes a new minimum tax on high-earning companies and a tax on corporations that buy back shares of their own stock. It came just weeks after top U.S. oil producers reported record earnings and billions in share purchases.A funny thing happened on the way to the president’s desk, though. Lawmakers shaved off the tax provision’s rough edges and added a couple of breaks that will allow oil producers to benefit — potentially — from one of the industry’s worst-ever years.“It gives them a gimme for one year,” said Trey Cowan, an oil and gas analyst at the Institute for Energy Economics and Financial Analysis, which aims to accelerate an energy transition.The upshot is that some companies that lost money during the oil price crash of 2020 will be able to use those losses to ease their tax liability in 2022, when the industry has reported record profits. It’s unclear how many companies will benefit because many of them will pay their taxes under the conventional tax law, rather than the Inflation Reduction Act’s minimum-tax provision.The new minimum-tax system requires corporations to pay their federal taxes based on their financial statement income, sometimes called book income. Companies that earn more than $1 billion will either have to pay their standard tax bill or 15 percent of their book income, whichever is greater, according to the text of the law.But the law allows companies to take a couple well-known tax breaks when calculating their minimum-tax payments, including one that former President Donald Trump used in his real estate business. And it also calculates the $1 billion earnings threshold based on a three-year average, which could significantly cut oil companies’ liabilities for 2022.Companies will be able to use a maneuver called the net operating loss carryover when they calculate their bills under the minimum tax. The loophole allows a company that has a loss in one year to “carry” the loss into a future year and reduce its taxable income by the same amount.Those types of carryovers have been used for decades in the energy industry and other businesses. Trump declared a net operating loss from his casinos and other businesses of $916 million for 1995, which would have been enough to offset $50 million in income for the next 18 years, The New York Times reported.The Inflation Reduction Act will allow companies to carry forward their book income losses starting at the end of 2019 and offset up to 80 percent of their company’s minimum-tax bill in any given year, said Wes Poole, Americas oil and gas tax leader at the consulting firm EY.The law also allows a couple of other important tax breaks when calculating what a company owes under the minimum-tax provision. Companies can deduct the depreciation of their assets, and certain foreign taxes, both of which are important to the oil industry.It’s unclear how much the industry could carry forward in offsets, but it’s potentially a large amount. Collectively, a sample of 36 top oil and gas producers lost $91 billion in 2020, according to research Cowan provided. Companies that wind up paying the minimum tax can also use any losses from 2020 to smooth out their tax bills for the next two years under the law’s averaging clause.
Where the New Climate Law Means More Drilling, Not Less - The New York Times - A compromise built into the law ensures oil and gas leasing in the Gulf of Mexico for the next decade. Activists say the region has been “sacrificed” to fossil fuels. — Justin Solet planted his foot on the edge of his boat and pointed to a natural gas rig protruding from the waters ahead. A web of pipelines and rusted storage tanks jutted up from the marsh behind him as a shrimp boat floated past and markers for crab traps bobbed on the water’s surface. “We are water people,” said Mr. Solet, 37, a member of the United Houma Nation, a Native community with many shrimpers, oyster farmers and crab fishers who depend on the Gulf of Mexico’s bounty. “This is their livelihood. And it’s right next to these tanks that I don’t think have been fixed or serviced in years.” Oil and gas wells and drilling equipment are a persistent threat to the fishing industry in the Gulf. In addition to the 2010 Deepwater Horizon disaster, there have been dozens of less-noticed oil spills. Last month, on the first day of Louisiana’s inshore shrimp season, a tank platform collapsed, pouring 14,000 gallons into Terrebonne Bay and ruining the catch. Now, more drilling may be on the way. Under a new climate and tax law, the federal government will lease hundreds of millions more acres for offshore drilling in the Gulf in the next decade, even as it invests $370 billion to move the country away from fossil fuels and develop wind, solar and other renewable energy. More Gulf leasing was among the concessions that Democrats and President Biden made to Senator Joe Manchin III of West Virginia, a Democrat who champions fossil fuels and whose vote for the legislation was crucial in the evenly divided Senate. It came despite Mr. Biden’s promise as a candidate to end new drilling on public land and in federal waters “period, period, period.” And it came even though Deb Haaland, who will oversee the leasing as the interior secretary, said as a congresswoman in 2020 that “we need to act fast to counteract climate change and keep fossil fuels in the ground.” The leasing also follows a warning from the International Energy Agency that nations must stop approving new fossil fuel projects if the world has any hope of keeping the average global temperature from increasing 1.5 degrees Celsius above preindustrial levels. That’s the threshold beyond which scientists say the likelihood of catastrophic climate impacts increases considerably. The planet has already warmed 1.1 degrees Celsius. The new law condemns communities like Houma, which are already dealing with storms made more intense by climate change, to continued reliance on oil and gas drilling, even as other parts of the United States race toward renewable power, said Cynthia Sarthou, executive director of Healthy Gulf, an environmental organization based in New Orleans.
Administration awards Gulf of Mexico drilling leases to oil giants - The Washington Post - The leases from a 2021 sale were given to oil and gas companies as part of a deal with Sen. Manchin over climate legislation. The Biden administration on Wednesday reinstated $190 million worth of leases to companies bidding to explore for oil and gas in the Gulf of Mexico, despite widespread concerns about accelerating climate change. The Bureau of Ocean Energy Management granted the 307 oil and gas leases as part of a compromise that won support last month from Sen. Joe Manchin III (D-W.Va.) for the Inflation Reduction Act and its roughly $369 billion in climate-related spending and tax credits.The Lease Sale 257, which had been held in November 2021, had been invalidated by a federal judge in February.On Wednesday, the Biden administration sought to stress that the sale would “protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential ocean user conflicts.”Gulf of Mexico federal offshore oil production accounts for 15 percent of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 5 percent of total U.S. output, according to the Energy Information Administration. And the gulf was the scene of the massive Deepwater Horizon oil spill in 2010, a rig that was operating on behalf of BP.Chevron submitted the highest sum of winning bids at $47 million. Other major successful bidders included Anadarko, BP, Shell and Exxon Mobil.The Inflation Reduction Act specifies how the administration should deal with lease sales in the Gulf of Mexico. It instructs the administration to hold another lease sale for oil and gas alone. Subsequently, the bill says, there will be sales of oil and gas leases coordinated with lease sales of renewable energy from wind turbines.Democrats have been divided over oil and gas lease sales with President Biden, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles E. Schumer (D-NY) all supporting them as part of the compromise with Manchin.
Congressional Sausagemaking, or How Inflation Reduction Became Fossil Fuel Export Promotion- Steve Fazzari and Servaas Storm’s breakdowns of the Biden administration’s Inflation Reduction Act are acute and persuasive. I think they point inescapably to a striking conclusion: That this flamboyantly contradictory production only looks like a piece of legislation. Really it is a new species of mythical beast – a twenty-first-century counterpart of the ancient Greeks’ fire-breathing Chimera, which notoriously joined the head of a lion with the torso of a goat and the tail of a serpent. The crossbreeding on display in the Act is at least as eye-catching: Key parts were inspired by the Green New Deal and similar proposals pushed by advocates of strong action to limit climate change. As Storm and Fazzari lucidly explain, many of these provisions mark real advances, even if some, such as the tax credits for Carbon Capture and Storage, are unlikely to help much. Even these features, though, betray unmistakable traces of more exotic fauna. The bill selectively reorients many progressive notions away from any hint of carbon pricing and avoids strong regulatory decrees. Instead, it emphasizes a dizzying array of investment incentives and tax credits as part of a (successful) strategy to enlist wider support not only from the usual suspects – alternative energy, Silicon Valley, and parts of finance – but also Ford Motor and other manufacturers, utilities, and electrical industry interests. Plus some previously skeptical unions. But the imprint of the Democratic Party’s progressive wing is plain enough. The same holds for other provisos of the bill, including the corporate minimum tax and the very cautiously hedged opening to allow Medicare at last to bargain with pharmaceutical manufacturers over the prices of a few drugs, though this move likely drew support from some other elements of the medical-industrial complex. The tiny (1%) tax on stock buybacks, adopted at the last minute as a stopgap to plug revenue losses after Democrats close to private equity balked at raising taxes on the masters of the universe, is another instance where the influence of the Party’s progressive wing sticks out, though the rate is unlikely to deter any buybacks at all and signals which interests really won. But what elevates the new beast to legendary status are the startling features Senators Manchin and Sinema insisted upon as the price for their votes. As the bill hurtled toward final passage, Sinema held out for deletion of a revenue raising provision Manchin and Senate Majority Leader Schumer had agreed upon that would have slightly tightened up the famous “carried interest” tax loophole. By allowing private equity firms to treat income earned as capital gains instead of ordinary income this trick has long shielded the industry from billions of dollars in tax payments and has become something of a legend as an example of how big money corrupts politics. Sinema’s brazen hold-up – she was awash in campaign contributions from the sector – can easily be over-interpreted and it was, as major media narratives rushed to portray Schumer as a populist hero challenging Wall Street.[1] With Sinema and many other Democrats, including President Biden himself in the 2020 campaign, all benefitting from private equity largesse, the proposal was quickly and unceremoniously dropped.[2]Which brings us to the real question about Inflation Reduction Act. The legislation had been lying fallow for the better part of a year. Manchin’s stonewalling had opened up a black hole that threatened to suck down the entire Biden agenda into it. The late July announcement that Manchin and Schumer had suddenly agreed to add a host of generous concessions to oil, gas, and mining interests to the bill and pass a separate measure shortening the time allowed for reviews of proposals for new pipelines and utility connections took everyone’s breath away. Not just the question of why the West Virginia Senator had suddenly relented, but why Schumer and the White House had agreed. Speculation about what changed has run rife ever since.There is a plain answer: the war in Ukraine’s shattering impact on world energy markets. Few analysts expected a large-scale Russian invasion of Ukraine and almost nobody believed that Ukraine had much prospect of turning one back in the event it happened. When the guns kept booming in eastern Europe, the shock was profound. The threat to Europe’s cheap energy supply was obvious.
U.S. evaluating need for further SPR oil releases after October -Granholm - U.S. President Joe Biden’s administration is weighing the need for further releases of crude oil from the nation’s emergency stockpiles after the current program ends in October, Energy Secretary Jennifer Granholm told Reuters. A Department Of Energy official later said the White House was not considering new releases from the U.S. Strategic Petroleum Reserve (SPR) at this time beyond the 180 million barrels that the president announced months ago. The Biden administration this year has delivered about 1 million barrels of oil per day from SPR stockpiles to lower fuel prices and pare energy inflation ahead of midterm elections in November. The releases so far this year have helped knock average U.S. retail gasoline prices down to $3.75 a gallon this week from $5 a gallon in June. But they also have cut U.S. emergency stocks to below 450 million barrels, lowest since 1984. OPEC and its allies led by Russia on Monday agreed to a small oil production cut beginning next month to bolster prices that have slid on fears of an economic slowdown. It is “a little early to say to say that there is going to be more SPR releases,” said Abhiram Rajendran, head of global oil at Energy Intelligence. “But if OPEC starts getting aggressive on cutting supply, that’s a possibility.” The nation’s overall crude stocks have been declining since mid-2020 due to sales from congressional mandates and Biden’s price initiative. Without the SPR releases, U.S. commercial crude oil inventories “would be much lower than they are and they are already below average,” said Phil Flynn, an analyst at Price Futures Group. Granholm also said during a visit to Houston on Thursday that the administration and allies are still discussing a cap on prices for Russian oil purchases. A price cap would restrict revenues available to Russia amid its invasion of Ukraine. The administration has not ruled out a U.S. fuel export ban, but said it is “certainly not something on top of the list,” she said. Granholm recently wrote to U.S. refiners urging them to replenish low fuel inventories ahead of winter and to curb rising exports of gasoline and diesel. The letter warned the administration may take unspecified emergency measures if fuel stocks fell further.
Janet Yellen warns US gas prices could spike this winter as oil soars once Europe stops buying Russian crude - There's a risk US gas prices at the pump will soar again this winter as a partial European ban on Russian crude imports takes hold, Treasury Secretary Janet Yellen has warned.The average price of gas in the US has fallen steadily since hitting a record in June, providing some much-needed relief as inflation remains near 40-year highs. But American drivers could well feel an impact if crude prices rise in the wake of European sanctions kicking in, according to Yellen."It's a risk," she told CNN's "State of the Union" Sunday, having been asked whether gas prices could rise again in 2022."This winter, the European Union will cease, for the most part, buying Russian oil," she said. "And, in addition, they will ban the provision of services that enable Russia to ship oil by tanker. And it is possible that that could cause a spike in oil prices."The EU is set to end all seaborne imports of Russian crude on December 5, fulfilling a pledge its members made when agreeing asixth sanctions package against Moscow in June.Yellen expects that embargo to push up oil prices as global supply tightens, which could in turn push up prices for US gas.This summer, American drivers benefited from a slide in oil prices that has led to falling pump prices, according to the AAA. The national average price of gas has dropped for 11 weeks in a row, from a high of just above $5 a gallon in June to $3.72 on Monday, its data showed.Concerns about the hit to demand from a recession and continuing COVID-19 curbs in China have weighed on the price of oil in recent months.
Biden Officials Weigh Buying Oil at Around $80 -The US may begin refilling its emergency oil reserve when crude prices dip below $80 a barrel, according to people familiar with the matter. Biden administration officials are weighing the timing of such a move, with an eye toward protecting US oil-production growth and preventing crude prices from plummeting, said the people, who asked not to be named sharing internal deliberations. The discussions come as West Texas Intermediate, the U.S. benchmark, plunged to almost $81 a barrel last week, its lowest level since January. While President Joe Biden in March ordered the release of an historic 180 million barrels from the Strategic Petroleum Reserve -- an effort to tame skyrocketing oil and gas prices -- officials are now aiming to slow those releases to keep the market in check heading into the winter. At the same time, officials are trying to reassure oil producers that the administration won’t let prices collapse amid intense volatility that’s fueled massive daily swings. Buying crude to refill the reserve, which is now at the lowest level since 1984 after a record drawdown last week, would be supportive for the market. WTI pared losses to trade near $87 a barrel on the news on Tuesday. White House and Energy Department communication staff didn’t immediately respond to requests for comment.
Democrats shame Big Oil in hourslong hearing - Between April and June, Exxon reported almost $18 billion in earnings. Chevron and Shell reported more than $11 billion. And BP reported $8.5 billion. Printed on a large poster and placed behind the seat of House Oversight and Reform Chair Carolyn Maloney (D-N.Y.), those numbers loomed in the background for almost the entirety of the panel’s four-hour Thursday hearing on the oil and gas industry. Maloney’s message: While gas prices soared, so did oil and gas company profits. “The truth is that Americans are suffering from high energy costs in large part because of Big Oil, which is making record profits while charging high prices at the pump,” Maloney said in her opening remarks. “Fossil fuel companies could lower prices dramatically and still have billions left to invest in a transition to cleaner, and ultimately cheaper, fuels.” Democrats aimed to name and shame the oil and gas industry for the impacts of climate change, building on last year’s blockbuster hearing with top executives from Exxon Mobil Corp., Chevron Corp., Shell PLC and BP PLC (Greenwire, Oct. 28, 2021).But with no oil company board members willing to show up for this week’s follow-up, the committee turned to data, subpoenaed documents and expert testimony.Late Wednesday, committee Democrats released an initial batch of internal oil company documents that showed executives mocking climate activists and American consumers (Greenwire, Sept. 15). On Thursday, they gave a platform to climate disaster survivors, academics and advocates. Here were some notable moments from the marathon hearing:
Oil Executives Privately Contradicted Public Statements on Climate, Files Show - The New York Times - Documents obtained by congressional investigators show that oil industry executives privately downplayed their companies’ own public messages about efforts to reduce greenhouse gas emissions and weakened industry-wide commitments to push for climate policies.Internal Exxon documents show that the oil giant pressed an industry group, the Oil and Gas Climate Initiative, to remove language from a 2019 policy statement that “could create a potential commitment to advocate on the Paris Agreement goals.” The statement’s final version didn’t mention Paris.At Royal Dutch Shell, an October 2020 email sent by an employee, discussing talking points for Shell’s president for the United States, said that the company’s announcement of a pathway to “net zero” emissions — the point at which the world would no longer be pumping planet-warming gases into the atmosphere — “has nothing to do with our business plans.”These and other documents, reviewed by The New York Times, come from a cache of hundreds of thousands of pages of corporate emails, memos and other files obtained under subpoena as part of an examination by the House Committee on Oversight and Reform into the fossil fuel industry’s efforts over the decades to mislead the public about its role in climate change, dismissing evidence that the burning of fossil fuels was driving an increase in global temperatures even as their own scientists warned of a clear link.On Thursday, the House committee is expected to discuss some of its early findings. “It’s well established that these companies actively misled the American public for decades about the risks of climate change,” said Representative Ro Khanna, a Democrat from California who spearheaded the investigation with Carolyn B. Maloney, the New York Democrat who leads the House committee. “The problem is that they continue to mislead,” Mr. Khanna said.At a hearing last year, oil industry executives stressed their support for a transition to clean energy and denied that they have misled the public. They acknowledged that the burning of their products was driving climate change, although none pledged to end their financial support for efforts to block action on climate change, and they said that fossil fuels were here to stay.The committee’s subpoena has sought documents related to companies’ role in contributing to climate change, their marketing and lobbying efforts on climate, and the funding of third parties accused of spreading climate disinformation. Several of the companies and organizations subpoenaed — which include Shell, Exxon Mobil, Chevron, BP, the American Petroleum Institute and the U.S. Chamber of Commerce — have yet to produce some of the key documents that have been requested, according to committee staff members.
New Documents Unveiled in Congressional Hearings Show Oil Companies Are Slow-Rolling and Overselling Climate Initiatives, Democrats Say - Congressional Democrats presented fresh evidence Thursday which they say proves that oil companies are continuing to mislead the public on climate change and undercut global efforts to reduce greenhouse gas emissions.At a hearing held by the House Committee on Oversight and Reform, lawmakers read from newly released documents obtained from ExxonMobil, Chevron, Shell and BP as part of an ongoing investigation into the fossil fuel industry and its role driving climate change.Among the documents was an internal memo sent to ExxonMobil’s chief executive, Darren Woods, that apparently sought to weaken the climate commitments of an international oil industry group, as well as internal emails from Exxon and other companies showing employees appearing to question the speed or seriousness of their efforts to pivot their businesses to focus on cleaner products.Democrats say the documents also show that the companies’ climate pledges depend on “unproven technologies whose future success and commercialization are not assured.” The hearing came as the oil companies are sitting on some of their biggest profits ever—Exxon reported $17.9 billion in profit over just three months this year—with the war in Ukraine having sent oil and gas prices skyrocketing. Democrats accused the companies of maximizing financial returns while Americans suffer from rising costs and the increasingly damaging impacts of extreme weather, rather than using their revenue to follow through on their pledges to reduce emissions.“These companies used these windfall profits to enrich investors and boost salaries of top executives,” said Rep. Carolyn Maloney, D-New York, the committee chairwoman. “Their clean energy investments, however, were a drop in the bucket.”Republicans on the committee largely defended the oil companies and criticized the Democrats’ energy policies, saying Democrats should be trying to increase oil and gas production in the face of high prices, rather than targeting the energy industry.“This investigation is part of the Democrats’ war on America’s energy producers,” said Rep. James Comer, R-Kentucky and the committee’s ranking member.Democrats had invited directors from the major oil companies to testify, but they declined to appear. The hearing, which was originally scheduled for March but was rescheduled after Russia invaded Ukraine, was the third held by the committee as part of its investigation into efforts by oil companies to sow doubt about climate science and derail or delay efforts to address warming.At the first hearing last year, top executives from each of the four companies testified by video conference and rejected accusations that they had misled anyone about climate change. Instead, they said, their companies recognize climate change as a threat and are helping to address the problem by investing in low-carbon fuels, carbon capture technology, renewable energy and by lowering their own direct emissions. Maloney said the companies have obstructed the committee’s investigation since then, refusing to turn over some documents while releasing massive volumes of press releases and other public documents. But, she argued, the documents that they have turned over, some of which the committee released on Wednesday night, already show contradictions with the company’s public statements.
Biden 'committed' to permitting deal with Manchin - The White House said Monday that President Joe Biden is “committed” to permitting reform legislation promised to West Virginia Democratic Sen. Joe Manchin.Democratic leaders promised Manchin permitting reform in exchange for his support of the Inflation Reduction Act. Today, White House press secretary Karine Jean-Pierre said the president remained behind the accord.“Without compromise, there would be no deal,” Jean-Pierre told reporters Monday morning aboard Air Force One, according to a White House transcript. “The president is committed to the deal.”Biden is standing by his pledge to Manchin even as dozens of progressive lawmakers and environmental activists ramp up pressure on the president to jump ship from the agreement (E&E Daily, Sept. 12).Senate Democrats have voiced optimism about passing the measure by attaching it to funding legislation that must be enacted by the end of September to keep the government open (E&E Daily, Sept. 7).Jean-Pierre was tight-lipped about whether the president was as enthusiastic about that plan, simply stating, “We support that deal and that vote, and we will work with Congress to determine the best pathway.”Final text of Manchin’s permitting plan has not been released. However, an outline of the arrangement stated the proposal would include one- to two-year mandatory schedules for finishing environmental reviews and set some limits on legal challenges.Advocates are particularly worried permitting reform could result in faster permits for fossil fuel projects. Sen. Bernie Sanders (I-Vt.) recently came out in opposition and cited his fears the legislation would ultimately hamper climate progress (E&E Daily, Sept. 9).“At a time when climate change is threatening the very existence of our planet, why would anybody be talking about substantially increasing carbon emissions and expanding fossil fuel production in the United States?” Sanders asked on the Senate floor last week.Activists on Monday also voiced frustrations about how the mining sector could benefit from the package (Greenwire, Aug. 29).
‘Sleazy backroom deal’: Progressives tangle one more time with Manchin – POLITICO -After nearly two years of watching Joe Manchin tank some of their biggest priorities, House progressives finally have sway over one of his. And they have every intention of using it. Dozens of House Democrats are now threatening Manchin’s proposal to streamline energy project permits — even if it breaks a commitment that paved the way for the party’s massive climate, tax and health care victory earlier this summer. Now that President Joe Biden has signed that legislation into law, House liberals insist they have the numbers to at least force a negotiation on a Manchin side deal they see as too fossil fuel-friendly. Led by Natural Resources Committee Chair Raúl Grijalva, many of those progressives are ready to take a stand: Dozens are leaning on Speaker Nancy Pelosi to separate this month’s must-pass stopgap funding bill from the Manchin-crafted permitting measure that she and Senate Majority Leader Chuck Schumer had already agreed upon. “This is a tale of two houses,” said Rep. Jared Huffman (D-Calif.), slamming Schumer and Manchin’s agreement to take up permitting reform in exchange for his vote on the party-line bill as a “sleazy backroom deal.” It’s all shaping up as Democrats’ last big internal fight before the midterms, a rare remaining sore point for a party that’s largely and finally united on everything from abortion to the economy to same-sex marriage. And after nearly an entire Congress defined by the 50-50 Senate, the House is taking a starring role: Sen. Bernie Sanders (I-Vt.) is pledging to vote against the permitting bill if it’s linked with government funding, but lower-chamber progressives are offering the main intraparty resistance to Manchin’s plan. The Senate is planning to pass a short-term funding bill with permitting reform attached just before the Sept. 30 deadline, daring Grijalva and his allies to risk a shutdown fight over the issue, according to multiple Democrats familiar with the plan. In an interview on Monday, Manchin seemed unworried about the fate of his proposal: “I would think that common sense would have to kick in sooner or later.” The text of Manchin’s permitting bill is not yet public, but senior Democrats in both chambers are downplaying the chances of disaster. Several lawmakers and aides said they believe there is a path to an amended deal that can win over Grijalva and other House Democrats while keeping Manchin on board. One key motivator: Many clean energy advocates say a permitting deal as envisioned by Manchin’s initial framework would benefit renewable projects, including wind and solar generation, even if it would also accelerate some fossil-fuel pipelines, such as the long-stalled Mountain Valley natural gas line that originates in the senator’s home state. Permitting reform, as Manchin put it, means “we’re able to have the energy security that our country needs now.” Referring to new transmission lines for renewable energy, he added: “And as we move towards the transition [to clean energy], you’re able to do that with the infrastructure it’s going to take. ... I would like to think people are being practical and not being political.”
More than 70 House Democrats join push against Manchin’s permitting reform - More than 70 House Democrats are signing on to a letter pressing Democratic leaders to not include a side deal with Sen. Joe Manchin (D-W.Va.) on reforming the permit process for energy projects in a bill funding the government. The permitting reform language was offered to Manchin to win his vote on the massive climate, tax and health care bill known as the Inflation Reduction Act that was signed into law by President Biden last month. Manchin provided the critical support to get that bill through the evenly divided Senate after winning concessions from Democratic leaders. But in the new letter, the Democratic lawmakers are asking Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) not to include the permitting reforms championed by Manchin into a stopgap funding measure that Congress is expected to take up this month. Without a stopgap funding measure, the government will shut down on Oct. 1. “The inclusion of these provisions in a continuing resolution, or any other must-pass legislation, would silence the voices of frontline and environmental justice communities by insulating them from scrutiny,” they lawmakers wrote. “We urge you to ensure that these provisions are kept out of a continuing resolution or any other must-pass legislation this year,” they added in the letter that was spearheaded by Rep. Raúl Grijalva (D-Ariz.). The opposition from Democrats is a significant problem. If the group follows through on the letter, Democrats might not have the votes to pass a government funding bill if it includes the language backed by Manchin. And the fact that so many members signed on to the push may give them some additional leverage. Democrats have historically opposed any changes perceived as undercutting environmental reviews in the permitting process, arguing that this could hamper the consideration of climate and pollution concerns. When they announced the agreement on the major climate, tax and health care bill, Senate Majority Leader Charles Schumer (D-N.Y.) and Manchin said that they, along with Pelosi and President Biden, had reached a deal to pass permitting reform by October to secure Manchin’s vote. Schumer has already said publicly that he would include the provisions in a stopgap funding measure, known as a continuing resolution.
What’s in Joe Manchin’s proposed permitting reform and could it cause a government shutdown? – Vox --Whether the government is forced to shut down at the end of the month may hinge onDemocrats’ approach to permitting reform, an issue that has divided the party in recent weeks.Permitting is the process for getting federal approval for energy projects, including oil and gas pipelines, which often undergo extensive review for their environmental impact. It can be a long and expensive process, and while Republicans and Democrats agree that the experience could be improved, they differ on what those reforms should entail.Sen. Joe Manchin (D-WV), a chair of the Senate Energy and Natural Resources committeewho has deep ties to the coal industry, has long taken issue with the current permitting process, arguing that it’s too convoluted. This summer, he struck a deal with Senate Majority Leader Chuck Schumer: In exchange for Manchin’s backing on the Inflation Reduction Act, Schumer guaranteed a vote on permitting reforms that would streamline approval of fossil fuel and renewable energy projects.Last week, Schumer announced that he plans to attach these permitting reforms to the short-term spending bill that’s expected to fund the government through mid-December, also known as a continuing resolution (CR). The decision has prompted pushback from more than 70 House members, including many progressives, and Sen. Bernie Sanders (I-VT).In a letter sent to both Schumer and House Speaker Nancy Pelosi last week, House lawmakers argue Manchin’s reforms would make it easier to greenlight harmful oil and gas projects, and reduce constituents’ abilities to oppose such endeavors. Additionally, they claim that attaching the policies to a must-pass bill would force lawmakers to choose between “protecting … communities from further pollution or funding the government.”Sanders, in a fiery floor speech last week, echoed many of these concerns, and later said that he would not vote for a CR that includes permitting reforms. For now, it’s uncertain if Democratic opposition to the permitting reforms would be sufficient to sink a CR altogether. Although 76 House members have expressed their opposition, they have not indicated whether they would block the bill if it was put on the floor. Depending on how many lawmakers are willing to vote down the bill in the lower chamber, there could be enough Republican support to make up for those losses. Similarly in the Senate, Republican support could neutralize Sanders’s vote in opposition. It’s also possible that progressive pressure affects the final legislative text of the permitting reform, which has yet to be released.
GOP expresses hostility to Manchin permitting reform campaign - Some Republicans are expressing hostility to Sen. Joe Manchin’s (D-W.Va.) campaign to use a government funding bill to advance permitting reform, adding to doubts about the effort’s future. Republicans have long lamented the length of time it takes to advance fossil fuel and other energy projects. And Manchin’s efforts could be the best shot they’ve had in years to speed up the environmental review process for energy projects. But Republicans are also upset over the party-line passage of the sweeping climate, tax and health care bill passed under budget reconciliation rules that sidestepped the filibuster — an effort made possible by Manchin. And they have no interest in making things easier ahead of the midterms for fractious Democrats already struggling to unify behind the plan. Many liberals strongly oppose the Manchin permitting reform deal, and nearly 80 House Democrats have come out against the plan. “If you’re now looking for Republicans to support and give you more cover than you have right now, you’re not going to find it with us,” Sen. John Barrasso (Wyo.), No. 3 Senate Republican, told reporters this week. Manchin struck a deal to pass permitting reform with Senate Majority Leader Charles Schumer (D-N.Y.) along with President Biden and Speaker Nancy Pelosi (D-Calif.) last month, according to the senators. Schumer said the agreement was part of an overall deal to advance the climate, tax and health care bill formally titled the Inflation Reduction Act. As part of the deal, Manchin and top Democrats agreed to advance permitting reform by Oct. 1, the start of fiscal 2023. They did not specifically name a vehicle, but a stopgap government funding bill is the only must-pass legislation on the docket before that date. The permitting reforms, which are expected to include truncated environmental reviews in the process of planning energy projects, have turned off a large group of House Democrats and drawn swift backlash from hundreds of advocacy groups. To pass the stopgap funding bill, known as a continuing resolution (CR), senators would need at least 60 votes to bypass a filibuster. Manchin has expressed hope that his proposal will attract sufficient GOP support to secure its passage, telling The Hill this week that the Senate is “going to have CR with permitting.” But that increasingly looks like wishful thinking on the part of the West Virginia senator, as a number of Republicans say they want to go further “So far what Joe’s put out is a one-page template — I haven’t seen anything else — and like I said, it’s not very ambitious in my view. It’s not enough for me to get to ‘yes,’ because frankly I don’t know why I would want to facilitate mediocrity,” said Sen. Kevin Cramer (R-N.D.).
Senate Republicans introduce separate permitting-reform bill - Sen. Shelley Moore Capito (R-W.Va.) has introduced separate legislation to overhaul the permitting process for energy projects, as Democrats debate a similar proposal agreed on by Senate Majority Leader Charles Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.). Capito, the ranking member on the Senate Environment and Public Works Committee, presented the bill as necessary to give industry “regulatory certainty.” She also said the proposal would expedite the completion of the Mountain Valley Pipeline, a project set to run through West Virginia. Manchin has made the completion of the pipeline a major priority, and the summary of the side deal reached with Schumer includes removing several obstacles to the goal. The West Virginia Republican also framed her separate introduction of a bill as in response to the lack of public text from Manchin, who has thus far released a summary of the proposal. “Since our calls for action and offers to see legislative text from the permitting ‘deal’ remain unheeded, Republicans are introducing this legislation today to deliver solutions to the roadblocks, delays, and postponements of key infrastructure projects across the country,” Capito said in a statement. Thirty-eight Senate Republicans co-sponsored the measure, including Minority Leader Mitch McConnell (Ky.), Minority Whip John Thune (S.D.) and Energy Committee ranking member Sen. John Barrasso (Wyo.). After over a year of negotiations, Manchin struck a deal with Schumer to support a sweeping Democratic climate and infrastructure bill in exchange for agreeing to introduce the separate permitting reform bill. The side bill has sparked fierce backlash from climate hawks in the Democratic caucus, and it remains unclear if Republican support for the measure exists to offset any Democrats who decline to support it. Last week, House Natural Resources Committee Chairman Raúl Grijalva (D-Ariz.) led more than 70 House Democrats in a letter asking House leadership not to include Manchin’s measure in stopgap funding that will prevent a government shutdown. “The inclusion of these provisions in a continuing resolution, or any other must-pass legislation, would silence the voices of frontline and environmental justice communities by insulating them from scrutiny,” they wrote. “As Senator Manchin’s said, there has always been bipartisan support for comprehensive permitting reform and this introduction reaffirms that,” a Manchin spokesperson told The Hill. “He looks forward to getting it passed by the end of the month.”
House Dem leaders scramble permitting reform effort - House Democratic leaders threw the permitting reform effort into doubt on Wednesday, saying the overhaul did not necessarily need to be attached to a stopgap government funding bill. That declaration flies in the face of repeated pledges from Senate Democrats, who have said that a deal between Sen. Joe Manchin (D-W.Va.) and Majority Leader Chuck Schumer (D-N.Y.) would tie together permitting and the stopgap funding bill, otherwise known as a continuing resolution. House Speaker Nancy Pelosi (D-Calif.) told reporters, “We have agreed to bring up a vote, yes. We never agreed on how it would be brought up, whether it be on the CR, or independently or part of something else. So, we’ll just wait and see what the Senate does.” She added, “And I’m not worried about it.” Manchin, the chair of Energy and Natural Resources Committee, has argued the deal requires moving the proposal with the continuing resolution, the latter of which Congress must pass before Oct. 1 to avert a partial government shutdown. The split between the House and Senate is another blow to the permitting overhaul effort, which would ease environmental reviews of major energy projects. In recent weeks, dozens of House Democrats have pressured leaders, saying they would resist voting for a funding bill that includes permitting language. House Republicans could scramble the effort as well — a top GOP lawmaker said that her party might be willing to vote for the bill if it went far enough on reforms. The must-pass CR likely would be the best chance for passage before the midterm elections and what’s likely to be an unpredictable lame duck session. House Majority Leader Steny Hoyer (D-Md.) said House Democrats have agreed to “nothing” regarding the permitting bill, including how it moves. He suggested he favored the House approving a CR this week, a move that would preclude the permitting legislation that is still being negotiated in the Senate. For their part, the chief Senate negotiators on the legislation said the public release of the bill language could come as soon as the end of the week. The Senate plans to act first on the CR, likely next week. “They are going through the edits now, so we are hoping to get it cleared up,” Manchin told reporters.
Sanders blasts permitting reform as Democrats' divide grows - Sen. Bernie Sanders said Thursday he would oppose a stopgap government spending measure that includes forthcoming permitting legislation, underscoring progressive resistance to the bill amid protests by environmental groups. Sanders, a Vermont independent who caucuses with Democrats, called the permitting proposal a “disastrous side deal” that would make it easier for fossil fuel companies to “pollute the environment and destroy our planet.. “At a time when climate change is threatening the very existence of our planet, why would anybody be talking about substantially increasing carbon emissions and expanding fossil fuel production in the United States?” Sanders asked on the Senate floor.Senate Majority Leader Chuck Schumer (D-N.Y.) struck a deal with Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) in July to pass the permitting overhaul in exchange for Manchin’s vote on the Inflation Reduction Act, Democrats’ sprawling climate, health care and tax law. Their plan is to attach it to the continuing resolution, the must-pass stopgap spending measure to keep the government open when the fiscal year ends Sept. 30.It will need 60 votes to pass the Senate, but most Democrats are rallying to support Manchin’s deal, and Republicans are beginning to soften their tone. Sanders’ opposition may not directly impact the bill’s fate in the upper chamber, but it’s part of a larger intraparty battle that could derail it.Manchin said Thursday he had been expecting Sanders to oppose it and reiterated that he expects permitting reform to ride on the CR.“We’re talking about small nuclear reactors, we’re talking about solar farms and wind farms, but we have to have the fossil horsepower that we need right now to run the country,” Manchin said.Other Senate climate hawks see potential benefits for clean energy projects they’re hoping to get off the ground with billions of dollars from the Inflation Reduction Act and a path to clearing backlogs for the transmission projects needed to escort renewable power around the country (E&E Daily, Sept. 8).Despite Sanders’ vocal opposition, fellow progressive Sen. Elizabeth Warren (D-Mass.) was noncommittal on the bill Thursday.“There’s no language out there right now,” Warren said. “I need to see what has been agreed to.”There’s a brewing battle, however, in the House, where progressives are publicly pressuring leadership to drop permitting from the CR or any other must-pass bill. House Natural Resources Chair Raúl Grijalva (D-Ariz.) is circulating a letter making that demand, and it now has signatures from more than 50 House Democrats, enough to derail the bill if Republicans do not end up supporting permitting reform (E&E Daily, Sept. 6). Sanders entered the letter into the congressional record during his floor speech.
W.Va. vs. Va.: Permitting overhaul a backyard brawl - - Sen. Joe Manchin (D-W.Va.) wants a contested natural gas pipeline in his state to be part of his permitting reform effort. But Virginia lawmakers who might typically support a permitting overhaul are balking at the deal, in part because of the pipeline that would run between the two states.At issue is the path of the 303-mile Mountain Valley pipeline. Virginia’s two Democratic senators have been circumspect on permitting reform, with one saying Thursday that congressional action could unfairly wade into the complicated political battle over the pipeline in his state.“For years, I have taken the position to both pipeline opponents and proponents that Congress should not be making pipeline decisions,” Sen. Tim Kaine (D-Va.) told reporters. “We should be setting up a permitting process that works and then have any project go through them.” Kaine added that when a deal is eventually released, “I would not like something that would have Congress doing this.”The West Virginia-Virginia split is a crucial part of the permitting debate roiling Capitol Hill. Democratic leaders in the Senate are looking to shore up support for permitting reform as they seek to pass the measure along with a stopgap government funding bill. But Democrats across the political spectrum are balking at the agreement.According to legislative frameworks and statements from Manchin, the yet-to-be-released permitting measure, which would streamline environmental reviews of energy projects, would also direct federal agencies to prioritize finalizing permit approvals for the Mountain Valley pipeline. The agreement would make changes to the arena where legal challenges to the pipeline would be filed.As proposed, the project would move West Virginia natural gas to a compressor endpoint in Pittsylvania County, Va., after crossing six other county lines.The developer behind the project claims the project is nearly 95 percent complete. Opponents, however, claim that the figure fails to recognize the complexity of the remaining work and the intense land restoration efforts pending.Despite earning approval in 2017 from the Federal Energy Regulatory Commission, the pipeline has been mired in setbacks and slowdowns as legal challenges to permits and environmental reviews have stymied progress.Many of those legal decisions have come from the 4th U.S. Circuit Court of Appeals, located in Richmond, Va. Manchin’s proposal would move those permit legal challenges to the U.S. Court of Appeals for the District of Columbia Circuit, although future decisions remain far from certain for that court (Energywire, Sept. 15).A shift away from the venue is among the issues Virginia lawmakers are worried about.“I don’t know exactly what the final outcome of that is going to be, but I would have deep concern about stripping jurisdiction away from the 4th Circuit on this or any other manner,” Kaine added.Kaine said he was scheduled to receive a briefing Thursday afternoon to get a better feel for what is contained in the actual language of the proposed permitting reform bill. He also said he’s discussed his concerns with Schumer and wants to talk with Manchin in the future.As Kaine has balked at the pipeline, Virginia’s Republican Gov. Glenn Youngkin has backed it. According to a July 29 letter he sent to FERC, the governor argued the increased availability of natural gas would go a long way toward helping the state shore up its electric generation supply and act as a bridge fuel.“I do not believe it is in the best interest of Virginians to condemn this project in the spirit of reducing carbon emissions when this project is in fact central to continue meeting emission reduction goals in the commonwealth,” Youngkin wrote.
Markey opposes Manchin push to include permitting reform in stopgap funding bill -Sen. Ed Markey (D-Mass.) is joining a group of liberal House members in opposing Sen. Joe Manchin’s (D-W.Va.) push to pass changes to the environmental review process in a stopgap funding bill. Markey became the second Democratic-caucusing senator to call for the issues to be separated. Sen. Bernie Sanders (I-Vt.) has previously expressed opposition to the West Virginia senator’s reforms. Democratic leadership promised Manchin they would pass changes to the country’s permitting system to expedite the approval of both fossil and renewable energy projects in exchange for his vote on their climate, tax and health care bill. Senate Majority Leader Charles Schumer (D-N.Y.) has said he would include such changes in a temporary funding measure that would prevent a government shutdown. But Markey said in a written statement on Friday that the two should not be tied, citing concerns about possible impacts on communities that are already overburdened by pollution. “As a way forward is discussed, and especially as new anti-environment proposals are being brought to the permitting discussions, we should not attach the permitting overhaul package to the must-pass government funding legislation,” Markey said in a statement on Friday. However, Markey also acknowledged the importance of the deal with Manchin and said he would speak with colleagues about “whether this package can reflect the values of environmental justice.” Any funding measure, with or without permitting reforms, would require 60 votes to pass the Senate. If both Markey and Sanders are not on board, at least 12 Republicans will have to vote with the rest of the Democrats to get it across the finish line. Republicans have long-sought changes similar to those that Manchin is pushing, but some have said that his changes may not go far enough, and that they don’t want to reward him for going along with Democrats’ climate and tax bill. On the House side, a lot of the opposition has come from Democrats, with nearly 80 of them opposing the idea of tying the funding measure to the permitting changes. Neither Manchin’s office nor Democratic leaders have released text on the permitting legislation. But, a summary from Manchin’s office says that it would limit how long environmental reviews can take, something liberal opponents warn could restrict community involvement and expedite fossil fuel projects.
Michigan's abandoned oil and gas wells to get plugged up with $25 million federal grant - Michigan has been plugging away at plugging abandoned oil and gas wells for decades. A new grant from the U.S. Department of Interior will help boost the state’s efforts. Michigan has 447 documented orphan wells, which can leach harmful chemicals into waterways and release toxic vapors. The state typically works with a million-dollar annual budget to plug up wells and has closed 400 wells over the last 30 years. But a new $25 million federal grant should ramp up progress. Scott Dean with the Michigan Department of Environment, Great Lakes, and Energy said the state can now hire additional staff and start more cleanup projects. “We're really pleased to have this infrastructure funding, and we're committed to cleaning up as many of these oil and gas wells, allowing these lands to go back into productive use," Dean said. "We're quite excited about this project, it's really gonna help jumpstart our program.” Dean said no goals or timeline have been developed yet. He said the state hopes to close “as many wells as possible.”
Wisconsin Line 5 trespass ruling may influence Michigan legal fight - Legal observers closely watch a suit between the Bad River Band tribe and Enbridge over its Line 5 pipeline in Wisconsin for any implications in a Michigan case. A federal judge said Enbridge has been trespassing for years with its Line 5 pipeline on sovereign tribal lands in Wisconsin… · In Michigan, state officials are fighting to evict a nearly 70-year-old section of Line 5 from a revoked Great Lakes bottomlands easement...
Kinetik and WaterBridge to join the Permian Strategic Partnership - The Permian Strategic Partnership (PSP) announced today the addition of two new companies, Kinetik and WaterBridge Resources, bringing its member company count to 19."We are thrilled to welcome Kinetik, WaterBridge and their respective board members Matt Wall and Jason Long to our team,” said Tracee Bentley, President and CEO of the PSP. “These companies bring tremendous talent and passion for the Permian Basin to the table. They are joining the PSP at a time when we have seen transformational initiatives in our three short years. We look forward to maintaining our momentum and making lasting impacts across the Permian Basin together." Adding these two new members will help PSP continue its vital work to improve the quality of education, workforce development, healthcare, and road safety in the Permian Basin. Since its inception, PSP has helped to transform $106 million in member contributions into $950 million in community-led investments. This is a significant achievement, and it would not have been possible without the support of PSP members. By pooling their resources, PSP members have leveraged their investment power to create real and lasting change in their communities.
As EPA Fails to Fine Oil and Gas Polluters, New Mexico Officials Demand Answers - New Mexico officials are asking the federal government to explain why it decided not to impose fines on oil and gas producers it caught violating the Clean Air Act in the state. In May, Capital & Main reported that the Environmental Protection Agency (EPA) found that 24 companies had 111 leaks from wells and other equipment, following an airborne monitoring program over New Mexico’s portion of the Permian Basin in 2019. However, only 11 companies were given violation notices, and only one received a fine for Clean Air Act (CAA) violations. Another company was fined for a permitting violation.Now, James Kenney, secretary of the New Mexico Environment Department (NMED), and U.S. Senator Martin Heinrich have asked the regional EPA office to explain the paltry number of violation notices and fines. “Within a week [of the Capital & Main story], I was on the phone with EPA leadership, both in Dallas and D.C.,” said Kenney. He was concerned that New Mexico’s ability to enforce its own clean air rules would be “put in jeopardy by EPA’s ‘no penalty’ settlements.” Whitney Potter, deputy chief of staff to Sen. Heinrich, said that he has taken a strong interest in the case as well. “The senator’s office is following this really closely,” Potter said, “at the highest levels.”For the story published in May, an EPA spokesperson explained the lack of fines by saying that “an administrative settlement is based on several factors, including the number and type of violations as well as a facility’s compliance history.” But Kenney shared an email exchange between the senator’s office and the EPA Region 6 office, which covers New Mexico. In it, the senator’s office asked the EPA to “explain why a penalty was not assessed” for most of the violations. The EPA regional office responded, “Our enforcement efforts specific to the 2019 flyovers focused on returning facilities to compliance quickly through the issuance of nonpenalty administrative compliance orders. Such orders are for compliance and only consist of corrective action and do not include penalty authority.”But Kenney, who worked for years at the EPA before heading NMED, said, “There’s penalty authority that EPA has, in and of itself, on its own — period. EPA can do that.”
New Mexico set to get $43 million to clean up abandoned oil wells -New Mexico will receive $25 million next month to clean up abandoned oil wells and another $18.7 million later for its portion of $560 million the Department of the Interior is divvying to 24 states to tackle a widespread hazard. The distributions are part of $4.7 billion total the agency will dispense through the federal infrastructure law to clean up orphaned wells on state and private lands nationwide. Orphaned wells can leak methane, a potent greenhouse gas, into the air and contaminate groundwater.M
Zephyr Acquires Assets Around Its Paradox Project In Utah - Zephyr Energy has put pen to paper on a binding agreement to purchase oil and gas assets on and around its Paradox project in Utah, the United States. The agreement will see Zephyr acquire 21 miles of natural gas gathering lines, the Powerline Road gas processing plant, rights of way for additional gathering lines, active permits, five existing wellbores and additional acreage which is partly contiguous to the company’s operated White Sands Unit. The consideration for the acquisition is $750,000 and will be satisfied by a payment from Zephyr's existing cash resources and as the new owner, Zephyr will assume responsibility for all eventual decommissioning and plugging and abandonment liabilities for the assets acquired (estimated to be approximately $2.5 million in today’s terms). Once the acquisition is completed, which is expected by 7 October 2022, Zephyr will operate approximately 45,000 gross acres in the Paradox Basin, the majority in which the company holds a 75 percent or greater working interest. The asset package will allow Zephyr to substantially reduce the capital required to build the necessary gas export infrastructure for its forecast gas production from the Paradox project. Given Zephyr’s potential significant gas resource, strong current pricing and increasing demand for U.S. domestic natural gas, the Board is delighted to have secured this opportunity ahead of commencing its further development of the Paradox project. The plant acquired under the agreement, is not currently in operation, bit it is well suited for brownfield redevelopment and contains useable pre-existing infrastructure and related permits. It has an estimated replacement cost value of $1.8 million. "We’ve often compared our Paradox project development to a jigsaw puzzle with a number of requisite pieces to be assembled prior to the commencement of commercial production - and today’s announcement is another substantial piece now in place. By acquiring this package of surface infrastructure, we are moving rapidly from a program of value delineation to a tangible development program which is expected to facilitate cashflows from the project in a more rapid timeframe,” said Colin Harrington, Zephyr's Chief Executive. Harrington went on to say that the acquired wellbores provide the company with multiple re-use options over the short to medium term. “Along with the wells comes a proprietary well database from the Cane Creek and overlying reservoirs (including wells with notable hydrocarbon shows and prior production). Wellbores that do not become work over candidates have potential as water supply and/or salt water disposal wells, which can substantially reduce our future operating and completion costs as the development progresses,” concluded Harrington.
Black Hills announces 2035 net-zero goal for gas distribution system - Black Hills Corp. will seek to achieve net-zero greenhouse gas emissions by 2035 across its natural gas distribution systems that span six states in the Central and Western U.S. The Sept. 13 announcement showed the growth of Black Hills' ambitions. Nearly two years ago, the company said it would aim to reduce its gas grid emissions intensity by 50% from 2005 levels by 2035. To go beyond this goal, Black Hills plans to further drive down emissions by refining its leak detection and damage prevention programs, and it expects to reach net-zero status through renewable fuel blending, carbon offsets and technological innovation. "Our net-zero target by 2035 builds on our natural gas system safety and integrity initiatives and expands upon strategies underway to strengthen our system," Black Hills President and CEO Linn Evans said in a press release announcing a sustainability report. The new target encompasses all Scope 1 methane emissions sources across the company's distribution system, including mains and service lines, transfer stations, meters and pressure relief valves, and damage to this equipment. As defined by the U.S. Environmental Protection Agency, the Scope 1 category covers direct greenhouse gas emissions from sources controlled or owned by the company, including emissions from infrastructure and vehicles. Scope 2 emissions are indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat, or cooling, and Scope 3 emissions come from activities or assets not owned or controlled by the company but that impact the company's value chain, including customers' use of the company's products. Scope 3 by definition is the most difficult emissions category for a company to manage, and many companies in the U.S. gas industry have said this category is not their responsibility. By 2035, Black Hills will try to replace all unprotected steel pipe with less leak-prone protected steel and plastic pipe. These materials already make up nearly 99% of the company's roughly 42,200 miles of gas distribution mains and service lines, according to the sustainability report. The company plans to expand its leak surveys and pursue advanced leak detection methods. Paired with aerial mapping, the advanced methods would allow Black Hills to prioritize large leaks and identify trends across its systems, the company said.
North Dakota oil output unexpectedly dips in July --North Dakota's oil production unexpectedly fell 2.5% in July due to a dearth of new wells coming online. "It was a surprise to myself and to my staff," Lynn Helms, North Dakota's mineral resources director, told reporters Thursday. "We were anticipating a slight increase." North Dakota, the nation's third largest oil-producing state, pumped out 1.07 million barrels per day in July, down from 1.1 million the previous month. Natural gas production, however, increased 1.3% to 3.1 million MCF. (An MCF is 1,000 cubic feet of natural gas.) Helms said the oil decline stemmed from "very low well completions" in June. The number of completed wells jumped in late July, but not enough to bring production up to expected levels, he said. The number of drilling rigs in North Dakota — a harbinger of future production — currently stands at 45, down one from August and even with July. "Rig count has pretty much stalled out in the mid-40s," Helms said. "We are just not able to attract the skilled labor we need to drill more wells and deploy more frack crews." Fracking entails blasting a torrent of water, sand and chemicals underground to free up oil in shale rock. North Dakota's gas production rose — even though oil fell — as the gas-to-oil ratio from wells continues to increase. As oil fields age, that ratio climbs. The state set a volume record in July for natural gas that was "captured" and sold. Gas that isn't captured is burned off, a process that wastes resources and emits carbon dioxide. North Dakota oilfield operators captured 94% of all gas produced during July; only 6% was flared. The state has had a historically high gas capture rate of 93% to 94% for the past 10 months.
California Removes Incentive to Use Natural Gas in New Buildings - California regulators on Thursday took away a key incentive for builders to use natural gas in new homes and commercial buildings as the state seeks to reduce greenhouse gasses and reach its climate goals. Utilities won’t be allowed to bill customers for part of the cost of extending a natural gas line to a new residential or commercial building starting in July, according to a decision by the California Public Utilities Commission. The regulation is designed to discourage the use of gas in buildings, which accounts for 10% of the state’s overall emissions.
D.C. Circuit leans toward FERC in NEPA dispute - Federal judges Wednesday pressed energy regulators for an update on their plans to use a contested metric to evaluate the costs of spewing planet-warming emissions from natural gas projects. During oral arguments over the Federal Energy Regulatory Commission’s assessment of the climate risks of a liquefied natural gas export facility in Alaska, three judges of the U.S. Court of Appeals for the District of Columbia Circuit appeared skeptical of green groups’ argument that the agency should have explained its views on the social cost of greenhouse gas estimates in its National Environmental Policy Act review. “There is a lurking question here, and that is: whose estimate?” said Senior Judge A. Raymond Randolph. “The Obama administration was the first to introduce the concept, and they estimated $43 per ton.” Meanwhile, he said, the Trump administration set the social cost estimate — which assigns a dollar value to the damage caused by a metric ton of emissions — at $3 per ton, and the Biden administration set the cost at $51 per ton. “Which social cost of carbon should prevail?” asked Randolph, a George H.W. Bush appointee. Environmental advocates have called for FERC in recent D.C. Circuit cases to adopt the metric, or a similar approach, as part of the agency’s plans to evaluate projects deemed to have significant climate impact. The Biden administration’s use of an interim social cost value is embroiled in separate litigation as the federal government works to finalize a new estimate. In the Alaska LNG case, the Center for Biological Diversity and the Sierra Club argued that a prior D.C. Circuit ruling required FERC to at least offer an explanation of why it was not using the metric to assess the project. The groups also raised other concerns about the agency’s NEPA analysis of the proposed Alaska Gasline Development Corp. project, which the environmental challengers say is the largest natural gas facility ever approved by FERC. The project would transport 3.9 billion cubic feet of natural gas per day produced in Alaska’s North Slope via an 800-mile pipeline to liquefaction facilities in the Kenai Peninsula. Altogether, the facility could export up to 20 million metric tons of LNG per year. FERC attorney Matthew Glover told the D.C. Circuit that there was “no quantifiable number” for FERC to use for a social cost of carbon estimate. He noted that the agency had previously stated that it did not think the metric would be helpful for addressing specific project impacts. “By quantifying the social cost of carbon, we don’t think the social cost of carbon, at a project level, will impact global warming or sea-level rise,” Glover said.
Chinese Study Looks at Heating Shale Rock to Produce More O&G - Marcellus Drilling News -This one is a “learn from your enemies” lesson. It has long been known that heating shale rock can free up oil and gas–something called in situupgrading (ISU). But such a practice has not been economic, at least that was the thinking. A new study published by researchers from (get this) Northeast Petroleum University in China (no way an American university would ever name itself after fossil energy!) looked at the different techniques that can be used to heat shale rock–the most economical ways–and published their findings in a paper for the world to read. It is just Chinese Communist propaganda? We don’t think so. The Chicoms know the West is so thoroughly brainwashed against using fossil energy that our own scientists and citizens won’t even pay attention to this important new study that discusses how to get more mileage from existing shale deposits.
Natural Gas Futures in Europe Plunge 44% from Peak - By Wolf Richter - The prices of natural gas futures in Europe, after increasing 20-fold since March 2021, have plunged amid falling demand, above-target gas-storage increases, a growing list of floating LNG import terminals, and surging imports of LNG from the US and other parts of the world.The front-month October TTF contract in the Netherlands – a benchmark for northwest Europe – plunged by 8% on Monday from Friday, and by 44% from the peak on August 26, to €191.02 per megawatt-hour (MWh) at the close today (data via Investing.com). The spike in futures prices was driven by speculation following Russia’s threats to cut, and then by its actual cuts, of gas deliveries to Europe. But those sky-high prices caused large shifts, not only lowering demand but also lining up new supply. And with this type of huge spike, and then plunge, there may well be some big energy speculators and assorted hedge funds that ended up on the wrong side with massively leveraged positions. On Thursday, two floating liquefied natural gas (LNG) import and storage terminals entered operations in the port of Eemshaven in the Netherlands, when they received their commissioning shipment of LNG from the US. The EemsEnergyTerminal, as the two vessels are called, will receive its first commercial shipment this week.These floating storage and regasification units (FSRU) receive the LNG, store it, re-gasify it, and then send the natural gas via pipeline into the land-based distribution network in the Netherlands, from where it can also be distributed to other countries.The capacity of an FSRU is much smaller than that of a large land-based import terminal, but it’s a start. The terminal at Eemshaven is expected to receive about 18 LNG cargoes by December 31, according to Bloomberg.Germany, which had become recklessly dependent on cheap natural gas from Russia and had failed to build a single LNG import terminal as alternative, is now getting the drift. It takes years to build a large LNG import terminal, so that won’t resolve today’s crisis. But the German government has chartered five FSRUs, three of which will start operating this winter. Private entities will charter an additional two FSRUs.Germany has embarked on drastic efforts to cut natural gas consumption by 20%, which includes just about anything, from asking people to forgo showers altogether, or take cold showers, to closing indoor heated pools, to production cuts by industrial users. Europe overall is aiming for a 15% cut in natural gas consumption.In Germany, gas storage facilities have been filling at record pace and are 87.9% full, according to data from Gas Infrastructure Europe. For the EU overall, storage facilities are 83.6% full, well above the 80% target set out by the European Union.
Imports of crude oil to Spain grow 22.1% between January and July - Crude oil imports to Spain increased by 22.1% between January and July compared to the same period in 2021, reaching 38,221 kilotonnes (kt), according to data from the Strategic Resource Reserves Corporation Petroleum (Cores). In July, imports of crude oil in Spain increased by 27% compared to the same month of the previous year and stood at 6,132 kt, while in the moving year, from August 2021 to July 2022, the registered growth was 17 ,3 %. In July, Spain imported 34 types of crude from 19 countries, with Brazil as the main supplier with 1,075 kt, 701.7% more than a year earlier and 17.5% of the total; Next comes crude oil from the United States, whose shipments have increased by 27.5% since the same month of 2021 and have reached 699 kt, equivalent to 11.4% of the total. In third position is Nigeria, whose imports have decreased by 57.4% to 565 kt, 9.2% of the total. Crude oil imports from OPEC member countries grew by 22.3% in July and represent 48.8% of the total, 18,704 kt; The increase in shipments from Algeria stands out, which increased by 228.9%, while those from Saudi Arabia grew by 83.9%. Likewise, imports of crude oil from countries that are not part of OPEC increased, which grew by 31.8%. In the annual accumulated, by geographical areas, in the first seven months of the year Spain received 12,900 kt of oil from Africa, of which 5,538 came from Nigeria; 9,327 kt were received from North America, of which 4,718 came from the United States, 3,106 from Mexico, and 1,504 from Canada.
Germany’s Jan-June oil imports rose 15.5%, bill more than doubled --German crude oil import volumes rose 15.5% in the first six months of 2022 year-on-year as the economy recovered from the COVID-19 pandemic and the bill more than doubled due to higher prices, official data showed on Thursday. Russia remained the top supplier, holding a 31.8% share of Germany’s oil imports in the period, monthly statistics from the BAFA foreign trade office showed. This was followed by 23.4% from the British and Norwegian North Sea, while imports from members of the Organization of the Petroleum Exporting Countries (OPEC) contributed 16.6%. The rest was shared among other sources including Kazakhstan and the United States. BAFA releases import data with a two-month delay. The impact of Russia’s invasion of Ukraine on Feb. 24, which has led to economic sanctions on Russia and counter actions in energy flows, is therefore showing only gradually. Oil imports in January through June from all origins increased to 43.5 million tonnes from 37.7 million in the same months of 2021, BAFA said. Germany spent 30.0 billion euros ($29.85 billion) on crude imports in the six months, 105% more than a year earlier. The average price paid per tonne on the border rose by 77.5% over the same period a year earlier, standing at 688.51 euros, BAFA said. Brent oil prices rose on Thursday after Russia threatened to halt supplies to some buyers, although weighing on the market were concerns that China’s extension of COVID-19 lockdowns would slow global economic activity and hit fuel demand.
Germany's neighbors are avoiding committing to a gas-sharing deal as Europe's energy crisis deepens - Energy-strapped Germany is struggling to persuade neighboring countries to sign off on a gas-sharing agreement as Europe heads toward the winter months scrambling to fill its store of energy supplies. Denmark and Austria are the only EU countries to jump on board, with Belgium, Poland, Luxembourg, and the Netherlands refusing to sign agreements to share their natural gas supplies ahead of winter to prevent supply interruptions, according to Germany's economy minister Robert Habeck in a report shared with Bloomberg.Habeck said the four countries have avoided "constructive negotiations" about the agreement, largely because they do not want to compensate their suppliers for redirecting natural gas to Germany.Germany is also in negotiations with Italy and the Czech Republic, but Italy is postponing talks until after September elections, and the Czech Republic has said they would only agree to share supplies if there was a cap on the compensation its government would have to provide gas suppliers."There is currently no progress to be expected from negotiations about bilateral solidarity agreements," Habeck added. Fatih Birol, the leader of the International Energy Agency, previously emphasized that the 27-country bloc would need to come togetherand coordinate in order to get past the energy crisis safely, especially if Russia completely cuts off Europe from its gas supplies.Although Germany reached its 80% gas storage goal nearly two months ahead of schedule, it's still suffering from soaring energy prices, which have the potential to inflict serious pain on households and plunge the German economy into a recession. With few alternatives, the country is turning to coal and nuclear power, but even those have yet to provide households with relief from sky-high energy bills. Shortly after Russia indefinitely halted flows on the Nord Stream 1 pipeline, German baseload year-ahead power, the European benchmark, jumped 23% to 625 euros per megawatt hour, more than three times what households were paying for electricity in January and 12 times what they were paying in January 2021.
Germany's Power Grid Faces Collapse As Millions Stock Up On Inefficient Electric Heaters For The Winter - A few weeks after we reported that google searches for "firewood" exploded in Germany, ground zero of what is sure to be a very cold winter... ... the country whose electric grid will be crippled for the foreseeable future after Russia's decision to halt nat gas supplies via the Nord Stream 1 pipeline, is now facing another crisis. According to Reuters, Germans could overload their power grid as they switch to inefficient electric heaters in an attempt to avoid gas shortages this winter, utilities warned in an article published on Sunday. Fearing the worst, German households have been stocking up on electric fan heaters, including portable devices, sales figures show, amid fears that Russia could cut or further limit gas supplies in the wake of its war in Ukraine. The managing director of the German association of energy and water utilities, BDEW, told daily Handelsblatt that customers could be left with even heftier power bills if they do not use the devices sparingly. "And they can overburden the power grids, for instance when many households switch on their fan heaters in one part of town at the same time on a cold winter's night," BDEW director Kerstin Andreae was quoted as saying. She said she understood people's fears of cold homes, but some of the coping mechanisms could backfire.
Germany Weighs Nationalizing Uniper The German government may increase its stake in Uniper SE above 50% and is open to taking the historic step of fully nationalizing the country’s biggest gas importer to prevent a collapse of the energy system. Dusseldorf-based Uniper needs more help from the state after already tapping into a support package that could be worth as much as 20 billion euros ($20 billion), according to people familiar with the matter. A surge in natural-gas prices and Russian supply cuts have triggered millions in daily losses, prompting the government to step in with a rescue package in July which included a 30% stake. Chancellor Olaf Scholz’s administration is ready to inject more capital and increase its stake above the 50% threshold, said one of the people, who asked not to be identified because the information is confidential. A full nationalization is also under discussion, and Uniper’s Finnish parent company Fortum Oyj would have a say in that decision, the person said. Talks with the Finnish government -- Fortum’s majority owner -- are ongoing, and Germany has previously said it isn’t willing to buy out the Finnish stake. Uniper confirmed on Wednesday that one of the options being discussed is the German government taking a “significant majority” stake. Beate Baron, a spokeswoman for Germany’s economy ministry, declined to comment. Uniper shares were down 9.6% as of 12:19 p.m. in Frankfurt after earlier surging as much as 10.6%, while Fortum shares were down 0.9% after rising as much as 7.1%. Fortum said in a statement Wednesday that no decisions have been made “beyond what was agreed in the stabilization package in July” but added that “alternative solutions” are being considered. “The deteriorating operating environment and Uniper’s financial situation have to be taken into account while Fortum, the German government and Uniper continue their discussions on a long-term solution,” Fortum said, adding that it would “update the market as and if necessary.” Germany is determined to ensure Uniper’s survival in coming months, when the energy crunch could worsen as temperatures fall heading into winter. Russian supply curtailments have forced the company to buy gas in the expensive spot market to fulfill contracts, pushing it to the edge of insolvency. Gas futures are about three times higher than a year ago as Russia retaliates for sanctions over its war in Ukraine. Rising energy prices have rocked energy companies, with margin calls -- the collateral required to back trades -- surging to unsustainable levels.
Europe's energy crisis needs immediate action or else the economy will come to a 'full stop,' says Belgian Prime Minister - The European Union must take immediate action to address the energy crisis or else face dire economic consequences, according to Belgian Prime Minister Alexander De Croo. "A few weeks like this and the European economy will just go into a full stop," he told Bloomberg on Thursday. "Recovering from that is going to be much more complicated than intervening in gas markets today. The risk of that is de-industrialization and severe risk of fundamental social unrest."In his view, the EU would benefit from imposing a price cap on gas trading, and it should be implemented as soon as possible in order to stave off catastrophe. De Croo's idea comes as Europe's top energy ministers convene in Brussels on Friday to discuss potential government responses in the energy market.A price cap will be on the table, along with other possibilities such as mandated reductions of electricity use and new taxes on fossil fuel companies. De Croo said he sees no other option than to impose such market interventions. What you are seeing today is a massive drainage of prosperity out of the European Union," he said.Since Russia began cutting supplies to Europe, natural gas prices have soared, and are trading at 10 times the price of the five-year average, according to Bloomberg data. That demands extreme urgency from government officials, the prime minister noted, and it's not something that officials can take a long time to deliberate before taking action.
The Energy Weapon Will Backfire - The rout of Russia’s army in northeast Ukraine over the past few days has many hoping momentum has shifted decisively away from Moscow. In the energy war, Vladimir Putin’s brigades actually look in better shape. Europe is paying many times more than normal for gas supplies, putting its currency on the skids and the economy on the verge of recession. But look beyond this winter and it’s possible to see how Putin’s energy weapon will backfire. It’s easy to forget now, but the biggest beneficiaries of the oil embargoes of the 1970s weren’t Riyadh or Tehran. Oil production from Middle Eastern countries fell by about 4.6 million daily barrels between 1972 and 1982. Ironically, Moscow was the biggest winner: Soviet production rose by 4.3 million barrels. By cutting off almost all gas supply to Europe, Putin all but guarantees a similar outcome to the Gulf five decades ago — losing market share to alternative suppliers and new energy sources. The ways Putin is squandering his energy dominance are the subject of a fascinating two-part interview between Georgetown University energy expert Thane Gustafson and my colleague Liam Denning. In the longer run, commodity consumers always have the option of substitution, a fact that hydrocarbon states perennially underestimate in trying to extract leverage. Moscow doesn’t just face rivals in the form of giant gas exporters from Qatar to the US — supplies that will flow even faster once new import terminals start opening — it’s also challenged by affordable alternatives. Take hydrogen. The availability of Russia’s dirt-cheap pipeline gas was one reason why green hydrogen seemed unlikely to displace methane in Europe’s energy system — even at a targeted 1.80 euros ($1.82) per kilogram by 2030, or a bit less than 17 euros a megawatt-hour. Today, it’s been about 18 months since we’ve seen benchmark gas futures so cheap. The Middle East paid for using energy as a weapon in the 1970s with punishing recessions in the early 1980s, followed by a multidecade struggle to regain the upper hand. Russia faces the eventual prospect of an even more resounding economic defeat.
Why The EU Is Struggling To Bring Its Energy Crisis Under Control - Last Friday, the energy ministers of the 27 EU members met for an emergency discussion of the energy supply situation in the bloc. The one thing they agreed on was implementing a ceiling on the revenues of power utilities that do not use gas to generate power. What they did not agree on was everything else the Commission suggested last week, including a price cap on Russian gas, a cap on final energy prices, and a direct intervention in EU electricity markets. It’s hard to get 27 countries to agree on so many things without any compromise. This is why the EU’s survival plans for the winter may never work as intended.Last week, the European Commission, headed by Ursula von der Leyen, proposed that EU member states impose a price cap on Russian natural gas imports, a mandatory cut in energy consumption across the bloc, and a cap on the revenues of power utilities that do not use gas. The Russian gas price cap was one of the items that divided the EU at the Friday discussions after Russia’s President, Vladimir Putin, warned that any country imposing a price cap on Russian oil or gas would stop receiving them. Some EU members argued in favor of a gas price cap for all gas imports into the bloc, following a similar suggestion made by Poland earlier this month. Some 15 members of the EU were in favor of such a move, but others were skeptical. And they were right to be skeptical: Norway, the EU’s gas savior, has signaled it would not accept a cap on the price it gets for its gas. “That’s not a solution we’d propose, we don’t think it answers the EU’s challenges,” Prime Minister Jonas Gahr Stoere said, adding, “I tell my European colleagues that I’m not the one who sells the gas.” The problem is that the European Union does not have all the time in the world to discuss how to go about saving its economy and its citizens from blackouts this winter. And as Bloomberg pointed out in a recent analysis of the situation ahead of the energy ministers’ meeting, speed is not among the things the European Union is known for. Belgium’s Prime Minister put it bluntly. “A few weeks like this and the European economy will just go into a full stop. Recovering from that is going to be much more complicated than intervening in gas markets today,” he told Bloomberg last week. “The risk of that is de-industrialization and severe risk of fundamental social unrest.”Protests are already a fact. Tens of thousands took to the streets in the Czech Republic earlier this month to protest the energy and foreign policy of the government. Thousands are protesting against high energy prices in Germany and Italy, too. In France, police broke up an illegal protest this weekend, arresting several dozen people.As the weather begins to get colder, these protests might grow and multiply, too. This makes the task of the EU governments all the more urgent. Yet there are already internal differences that would be difficult to resolve in a short time.Croatia, for instance, plans to ban natural gas exports, which has set its neighbor – and gas client – Hungary on edge. Germany’s neighbors are not happy, either, after Berlin declared it would not change its mind about its remaining nuclear reactors and will retire them as planned.“I want to make sure that we can provide everything to pass the winter,” the EU’s internal markets commissioner Thierry Breton said last week. “I think it’s important that every country, which has a capacity to do it for this very period, that they do whatever they can. And that’s also a matter of solidarity.”Germany clearly does not see things the same way, and it seems the only one currently seeing things the way Germany does is its neighbor France: the two sealed a deal that will see France send Germany gas and Germany send electricity back. The rest of Germany’s neighbors, however, remain reluctant to ink solidarity deals with the EU’s largest – and currently most vulnerable – economy.Even at the best of times, decision-making in the European Union takes quite a while. This is perfectly understandable: getting 27 states with their own national interests to agree on one course of action is often a challenge, and compromises need to be made.This time, there is little space for compromise and even less time to settle on a course of action. Agreement on a gas price cap appears to be off the table if the EU wants to move fast. The only thing left that can be agreed upon quickly would be an intervention into energy markets to cap prices because consumption caps would be a challenge to negotiate.
Russia's Gazprom Doubled Oil & Gas Revenue This Year (Despite Volume Dropping In Half) --This year, Gazprom supplied 43 percent less gas to Europe than last year, but raised prices by three times on average. This translated to the company’s European export revenue increasing from $53 billion dollars to $100 billion dollars, wrote Olivér Hortay, head of the energy and climate policy research at Hungarian think tank Századvég Konjunktúrakutató, in his Facebook post in response to an article published in the Financial Times. According to the paper, the higher gas prices will help the Russian natural gas extraction company Gazprom offset the decrease in supply. In an article published on Friday, the Financial Times reported that the company Gazprom is keeping its revenues from gas sales stable, as rising prices have compensated for its decision to reduce deliveries to Europe. The Kremlin said this week that it would keep the Nord Stream 1 gas pipeline, which carries gas to Europe across the Baltic Sea, closed as long as the West maintains its economic sanctions. This means that Gazprom is now delivering approximately 84 million cubic meters of gas to Europe via Ukraine and Turkey per day, compared to last year’s average of 480 million cubic meters per day, the British newspaper pointed out. However, the drop in supplies is expected to push prices this year to an average of three times that of 2021, which BCS Global Markets oil and gas industry analyst Ron Smith said would help Gazprom increase its total revenue by 85 percent to $100 billion.
A new Gazprom plant is shipping its first liquefied natural gas cargo to Greece just 6 months after the EU vowed to drastically reduce Russian gas imports -- - Following Russia's invasion of Ukraine, the European Union pledged to reduce the bloc's reliance on natural gas from Russia. But it appears new deals are still pushing through.The first cargo from Russia's Portovaya liquefied natural gas, or LNG, plant, which is near the shut Nord Stream 1 pipeline, will be going to EU nation Greece, Bloomberg reported on Saturday, citing a person with direct knowledge of the situation.The identity of the buyer and size of the cargo was not reported, but Greece has only one LNG facility that supplies the domestic market, as well as Bulgaria — also an EU country — and North Macedonia.This is at odds with EU plans, rolled out in March, that aim to cut the bloc's dependency on Russian gas by two-thirds by the end of 2022 and end its reliance on Russian supplies of the fuel "well before 2030."Europe depends on Russia for 40% of its natural-gas needs, such as cooking in homes and firing up power stations. It's fretting over a winter energy crisis, as Russia has reduced natural-gas flows to the continent, citing sanctions-related challenges.Challenges abound, particularly in the short-term after Russiahalted natural-gas supply via the key Nord Stream 1 pipeline. Europe is busy setting up LNG terminals to counter the energy crisis, as these facilities will turn the super-cooled fuel to gas.Sweden, another EU nation, is also still importing Russian LNG. Last week, activists from Greenpeace Nordic protested Russian imports by blocking an LNG tanker from unloading Russian fuel in Sweden."The fact that Russian fossil gas is still allowed to flow into Sweden, more than six months after Putin began his invasion of Ukraine, is unacceptable," Karolina Carlsson, a campaign leader at Greenpeace Nordic, said in a statement on September 8.
Nigeria-Morocco pipeline approaches ability to provide gas to Europe — Nigeria and Morocco signed an agreement that inches a long-standing proposal for a gas pipeline between the two countries closer to reality, raising the possibility of a new energy-supply route for West Africa and Europe.The Nigerian National Petroleum Co. and Morocco’s National Office of Hydrocarbons and Mines signed a memorandum of understanding in Rabat on Thursday, Nigeria’s state oil company said in a statement. While the project could take decades to complete and cost billions of dollars if it goes ahead, the ceremony comes with European nations increasingly hungry for new sources of gas following Russia’s invasion of Ukraine.The 5,600-kilometer (3,840-mile) conduit along West Africa’s coast would provide gas to the 15-country Economic Community of West African States, which also signed the agreement, and permit fuel to be shipped to Spain and the rest of Europe. The Saudi Arabia-based Islamic Development Bank and the OPEC Fund for International Development have committed nearly $60 million to finance feasibility and engineering studies for what would be one of the longest pipelines ever built.Nigeria possesses Africa’s largest proven gas reserves at about 200 trillion cubic feet, most of which is untapped, flared or reinjected into oil wells. The government says it wants to monetize much more of that resource to replace crude as the country’s key commodity. Nigeria’s oil production is in sharp decline, hampered by massive theft from pipelines and a lack of investment in new capacity.If the Nigeria-Morocco pipeline advances, it will be many years before it delivers any gas. Signing a previous agreement in 2018, the two government said the project could take 25 years to finish. It’s projected to cost billions of dollars, though it’s unclear where that investment will come from. Nigeria’s deputy oil minister said in June that the final price tag will not be determined until the project is designed.
Israeli natural gas revenues boom - The Israeli government is seeing record income from natural gas sale royalties. Data released recently by the Royalties Department at the Ministry of Energy shows that in the first half of 2022, a significant jump of about 48% was recorded in the total royalties collected from natural gas. Between January and June 2022, royalties reached NIS 824 million (roughly $250 million), compared to about NIS 557 million ($165 million) during the first half of 2021. This increase comes thanks to record production of natural gas from the Leviathan and Tamar reservoirs, which amounted to 10.85 billion cubic meters (BCM), compared to production of 8.9 BCM in the first half of 2021, an increase of 21.9%; 6.26 BCM have been directed for the domestic market and 4.59 BCM for export. In addition to the production increase, the dollar exchange rate hike has also contributed to a significant increase in Israel's total royalties. According to the Ministry of Energy, royalties collected from the Leviathan reservoir, Israel's largest natural gas reservoir, amounted to NIS 453 million ($137 million) and production reached 5.62 BCM, a 27.5% jump compared to the same period last year. The volume of exports constituted about 68% of total production from the Leviathan reservoir, while the value of royalties originating from exports constituted 77.4% of the total royalties. The growing activity is well reflected in the latest results for the quarter ending in June, reported by NewMed Energy (formerly known as Delek Drillings), which holds 45.34% of the Leviathan reservoir. According to the company, exports to Egypt and Jordan continue to constitute the main growth engine. The net revenues (minus royalties paid to the state) from the sale of natural gas in the second quarter jumped by about 32% and amounted to $249 million, compared to $189 million in the corresponding quarter last year. Net revenues in the first half of 2022 reached approximately $460 million, compared to $373 million in the corresponding period last year, an increase of 23%. Meanwhile, production from the Tamar reservoir, located 90 kilometers west of Haifa, amounted in the first half of 2022 to 5.23 BCM with total royalties collected reaching NIS 366 million ($111 million), an 85% leap compared to the figure recorded in the same period last year. The increase in revenues was mainly due to a significant increase of 53.8% in production quantities. One of the main controversial issues surrounding the Israeli gas sector after the discovery of the reservoir was the value of taxes that will be collected by the state from the producers. After in-depth discussions, the taxation on the gas sector was divided into three layers: income tax on owners of the reservoirs, royalties, and an additional special tax on oil and gas. All in all, the total revenue from royalties from the natural gas reservoirs collected by the Ministry of Energy came to NIS 9.8 billion (nearly $3 billion) from 2004 to June 30, 2022. In fact, Amir Foster, executive director of the Israeli Natural Gas Trade Association, asserted that Israel's revenues from natural gas are much higher. Speaking to Al-Monitor, he estimated that to date, NIS 17 billion ($5 billion) has entered the state coffers from all three types of tax. According to Foster, the future is also promising. “Depending on gas prices, my estimate is that within five years the state's revenues from gas will reach a value of between NIS 700 million and NIS 800 million ($207-237 million) per month.”
Abundant Middle East supplies drag Asia LPG prices lower ahead of winter -Rising Middle East supply since May, along with steady exports from the US and Africa ahead of winter, have dragged Asia LPG prices down from 18-year highs in March, shipping and trade data showed. LPG inventory with Middle Eastern producers has been building amid higher OPEC crude production, although this could change as OPEC and allies have decided to cut output quotas by 100,000 b/d for October at the Sept. 5 meeting. Other than term supply, Middle East producers have been selling spot cargoes. Producers have been accepting largely in line with lifters' monthly term cargo nominations this year, while Qatar Petroleum and Abu Dhabi National Oil Co., or ADNOC, have been advancing loading dates to clear swelling inventory, traders said. In its October-loading term nomination acceptances, ADNOC did not announce cuts or delays, but loadings were advanced by five to 10 days. ADNOC also advanced loadings for September, August, and July cargoes. Qatar's acceptances of October-loading nominations had most lifting dates advanced too, traders said. Qatar was heard to have offered up to three October-loading spot cargoes, one of which was sold at a $30/mt discount to Saudi Contract Prices to China Gas, traders said, underscoring recent deep discounts of FOB Middle East cargoes. Kuwait Petroleum Corp., or KPC, has regularly offered via spot tenders in recent months and in early-August sold 44,000 mt of evenly split LPG for Oct. 7-8 loading, at around $15/mt discount to October CPs, after selling a similar cargo for Sept. 11-12 loading. In its previous tenders, KPC sold similar lots for Sept. 2-3, Aug. 7-8 and June 19-20 loadings, sources said. Other than moving term cargoes at earlier-than-nominated dates, Middle East producers can offer spot cargoes on CFR basis, traders said. Saudi Aramco's trading arm, Aramco Trading Co., or ATC has been offering CFR spot LPG, which could be up to seven cargoes, on top of baseload volumes, traders said. For September-loading, ATC was heard offering three to four cargoes, traders added.
Russia continues to export oil products to Europe, evading EU ban – Skhemy -- Russian oil tankers are continuing to export oil products to Europe, despite a ban on them entering EU ports, journalists from Ukrainian television’s Skhemy investigative program reported. According to Skhemy’s investigation, Russia uses two schemes to circumvent the ban. In the first case, loaded Russian tankers leaving Russian ports stop in the Black Sea off the coast of Romania, where their cargo is transshipped onto vessels flying the flags of EU countries. After that, these vessels deliver Russian oil products to the ports of other countries, including European ones. The second scheme uses the Liberian-flagged large capacity tanker New Legend, which has been at sea near the port city of Constanta, Romania, for five months. Russian tankers have been regularly loading it since June, and New Legend then transships the oil and oil products to other vessels, which then enter a European port or “continue the relay” until a fourth vessel in the chain enters a EU port. The journalists revealed that Russian tankers in these schemes belong to the Volga Shipping company owned by businessman Vladimir Lisin, who, according to Russian Forbes, topped the list of the richest people in Russia in 2022. In April 2022, the European Union announced a fifth package of sanctions against Russia over its full-scale war against Ukraine. Among other things, the sanctions include a ban on Russian and Russian operated vessels from accessing EU ports.
The G7’s price cap on Russian oil begins to take shape - Officials in G7 countries, including U.S. Treasury Secretary Janet Yellen, say the unprecedented measure, set to begin Dec. 5, will cut the price Russia receives for oil without reducing its petroleum exports to world consumers. Russian President Vladimir Putin could push back, causing stress in oil markets even as the plan comes together. The G7 wealthy nations — the United States, Japan, Germany, Britain, France, Italy and Canada — and the EU are hammering out details of the plan. The G7 wants to enlist other countries, including India and China, which have been snapping up heavily-discounted oil from Russia since its Feb. 24 invasion of Ukraine. Moscow has managed to maintain its revenues through those increased crude sales to India and China. But even if India and China don’t join, a cap could help force down prices for Asia and other consumers. U.S. Treasury Assistant Secretary for Economic Policy Ben Harris said on Sept. 9 that if China negotiates a separate 30%-40% discount on Russian oil because of the price cap “we consider that a win.” The consensus on the price cap level will be reached with the aid of a “rotating lead coordinator,” the U.S. Treasury Department said in guidance issued on Friday suggesting that countries in the coalition will have a temporary leadership role as the plan proceeds. It will likely be weeks before the price of Russian crude oil and two oil products will be decided, Harris said. Washington-based ClearView Energy Partners has said officials have been talking about a $40-$60 per barrel range for crude. The upper end of that range is consistent with historical prices for Russian crude, while the lower end is closer to Russia’s marginal production cost, analysts say. Coalition members with long economic and military relations with Russia could push for a higher cap, while a limit too low could take market share away from Saudi Arabia and other oil producers. “The level will be determined by both quantitative and qualitative reasons,” said Bob McNally, president of Rapidan Energy Group. Russian crude is priced at a discount to the international Brent benchmark and the G7 wants to keep that spread wide, to keep down Russian oil revenue. However, achieving a wide spread could mean higher prices for Western consumers as Russia is the world’s second largest crude exporter, after Saudi Arabia. The plan agreed by the G7 calls for participating countries to deny Western-dominated services including insurance, finance, brokering and navigation to oil cargoes priced above the cap. To secure those services, petroleum buyers would make “attestations” to providers saying they bought Russian petroleum at or below the cap. Maritime services providers will not be held liable for false pricing information provided by buyers and sellers of Russian petroleum, the U.S. Treasury said. G7 officials believe the plan will work because the London-based International Group of Protection & Indemnity Clubs provides marine liability cover for about 95% of the global oil shipping fleet. Traders point to parallel fleets that can handle Russian oil using Russian and other non-Western insurance that could be used to sidestep enforcement efforts. It remains uncertain how many ports around the world will accept Russian-insured ships. Craig Kennedy, an associate at Harvard University’s Davis Center for Eurasian and Russian Studies, said the G7 has long term leverage because Moscow is constrained by a small tanker fleet versus the vast scale of exports it needs to get out. If Russia doesn’t want to sell at the cap, it may have to shut in production, which could impose long-term costs on its oilfields. Putin has said Russia will withhold exports to countries that enforce the cap, and fears about the threat could cause petroleum markets to rise before December. Higher prices could also be risky for U.S. President Joe Biden ahead of midterm elections in November when his fellow Democrats hope to keep control of Congress. Some analysts worry Moscow could respond by taking actions beyond Russia’s borders before the cap takes effect. “My biggest concern is I think Putin is going to make it very, very painful on the way to Dec. 5,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told a Brookings Institution event on Sept. 9. “They also have assets in other producing countries, whether it be Libya, whether it be Iraq, and they have an ability to cause some problems in other producer states.” HOW WILL THE CAP BE ENFORCED? The U.S. Treasury warned service companies to be vigilant about red flags indicating potential evasion or fraud by Russian oil buyers. Those could include evidence of deceptive shipping practices, refusal to provide requested price information, or excessively high services costs. Deputy U.S. Treasury Secretary Wally Adeyemo said on Friday that those who falsify documentation or otherwise hide the true origin or price of Russian oil would face consequences under the domestic law of jurisdictions implementing the price cap.
Countering G7 price cap proposal, Russia offers discounted oil to India - In a bid to counter the growing clamour among the G7 nations to enforce a price cap on Russian oil, Moscow has told New Delhi it is willing to provide petroleum at even lower rates than before to India, officials said. “In principle, the ask in return is that India should not support the G7 (Group of Seven) proposal. A decision on this issue will be taken later following talks with all the partners,” an official with the Ministry of External Affairs (MEA) said. These “substantial discounts” will be steeper than those offered by Iraq in the past two months, officials said. In May, Russian crude oil was cheaper by $16 a barrel for India as compared to the average Indian crude import basket price of $110 a barrel. The discount was reduced to $14 a barrel in June, when the Indian crude basket averaged $116 a barrel. As of August, Russian crude oil costs $6 less than the average crude import basket price, officials said. India’s biggest oil supplier Iraq undercut Russia beginning in late June, by supplying a range of crudes that on average cost $9 a barrel less than Russian oil. The extremely price-sensitive market, therefore, has shifted heavily back in favour of Iraq. As a result, Russia slid to the third position in the list of nations from which the bulk of India’s oil originates, meeting 18.2 percent of all the country’s oil needs. Saudi Arabia (20.8 per cent), and Iraq (20.6 per cent) are the top two suppliers. Even without the price argument, officials feel a stable supply of crude oil should be established from outside the West Asian region. “While oil imports from Iraq have remained a mainstay of our purchases, given global complications and Iraq’s volatile internal situation, India needs to create alternative mechanisms,” another official said. Price cap push The G7 nations, namely Canada, France, Germany, Italy, Japan, the UK, and the US, along with the European Union are currently pushing to institute a cap on the price of Russian oil. The Western allies hope to financially squeeze out Moscow, which has continued to benefit from soaring energy prices, and cut off its means of financing the invasion of Ukraine. Media reports suggest the oil cap plan will be implemented at the same time as the EU embargo takes effect. There will be two price caps — one for crude and the other for refined products. The crude oil cap shall apply from December 5, 2022; that on refined products shall apply from February 5, 2023. India, being the second-largest oil importer globally, has been requested multiple times to join the price cap. “Any artificial changes to the established global price mechanism may have unintended consequences later. India will continue to weigh its options,” another official said. Russian oil here to stay The share of Russian crude oil, which was less than 1 per cent of India’s crude oil import volume, prior to Russia’s invasion of Ukraine in February, rose to 8 per cent in April, 14 per cent in May and 18 per cent in June, according to industry estimates and official Commerce Department data.In August, India imported 7,38,024 barrels per day from Russia, 18 per cent lower than in July, estimates made by London-based commodity data analytics provider Vortexa, which tracks ship movements to estimate imports, shows. Since July, India’s crude oil imports from Russia have declined. But, the overall import of crude oil has also fallen.
Using the Payments System to Enforce an Russian Oil Price Cap Likely to Cause Supply Shock --The G7-led idea of putting a price cap on Russian oil may look brilliant in theory, but it would likely be very messy in practice, potentially sending oil prices soaring. Surging oil prices are exactly what the price cap is meant to avoid, as it aims to keep Russian oil flowing but at a lower price.For weeks now, the G7 has been discussing exempting Russian oil from the maritime insurance and financing ban only if that oil is sold at or below a certain price that the group has yet to agree to.This would require a lot of coordination with EU, UK, and U.S.-based providers of maritime insurance and financing. But it would be the easiest part of implementing the price cap. Russia could intensify its already ongoing efforts to have non-Western tankers and insurers agree to ship Russian oil and products. Or Putin can simply make good on hispromise to halt all energy supply – including crude, fuels, natural gas, and coal – to the countries that sign up to cap the price of Russian oil.In any case, oil prices will likely go much higher as the EU embargo on Russian oil – which excludes oil sold at or below the price cap – enters into force at the end of this year.Russia will continue selling its oil to Asian buyers such as India and China using non-Western fleets of tankers and maritime services while choking supply to the West. Russia is also expected to increase its covert oil exports, taking a leaf out of Iran’s playbook of below-the-radar exports by switching off transponders and/or hiding the origin of the oil, analysts say.Still, the non-Western fleet of tankers that Russia can rely on is not enough, Energy Intelligence’s John van Schaik and Emily Meredith write.If Russia refuses to use any maritime services associated with G7 countries, “Russian oil will have to sail on non-Western tankers – and there aren’t enough vessels to handle Russia’s millions of barrels,” they argue.“The result: less oil, higher prices, and less pain for Russia.”According to Energy Intelligence, Russian oil going to Asia from Russia’s Far East is already shipped there on Russian or Asian tankers. But Russia is estimated to be exporting 4.45 million barrels per day (bpd) from its ports in the Arctic, the Baltic Sea, and the Black Sea – and this is done mostly on EU-linked vessels. Finding tankers and insurance coverage not linked to the EU, the G7, or other countries that may join the price cap mechanism for that amount of oil could be next to impossible.The G7 reiterated in early September that they would finalize and implement “a comprehensive prohibition of services which enable maritime transportation of Russian-origin crude oil and petroleum products globally – the provision of such services would only be allowed if the oil and petroleum products are purchased at or below a price (‘the price cap’) determined by the broad coalition of countries adhering to and implementing the price cap.”In guidance on the upcoming price cap, the U.S. Department of the Treasury said last week that the price cap policy has three objectives: “maintain a reliable supply of seaborne Russian oil to the global market; reduce upward pressure on energy prices; and reduce the revenues the Russian Federation earns from oil after its own war of choice in Ukraine has inflated global energy prices.”While clever in theory, the price cap plan could actually lead to much higher oil prices because trade flows will be upended again, tankers are in short supply, and Russian oil exports – still remarkably resilient – would plunge, analysts say.The global oil market will have to prepare itself for a loss of 2.4 million bpd supply when the EU embargo kicks in, the International Energy Agency (IEA) said in its Oil Market Report this week. An additional 1 million bpd of products and 1.4 million bpd of crude will have to find new homes, which could result in deeper declines in Russian oil exports and production. The IEA expects oil production in Russia to fall to 9.5 million bpd by February 2023, which would be a plunge of 1.9 million bpd compared to February 2022. Then there is the very real threat from Putin to simply stop selling oil – and all other energy products – to countries that join the price cap on Russian oil.
Russia could find new markets for half the oil the EU won’t buy — Russia could find new markets for about half of the crude exports that will be banned by the European Union from December, according to energy-data firm Kpler. Indonesia, Pakistan, Brazil, South Africa, Sri Lanka and some countries in the Middle East could together buy as much as 1 million barrels a day of crude from Russia in the coming winter, Kpler said in a research note. Russia’s oil industry, which accounts for roughly 10% of the global production and is a key source of revenue for the Kremlin, already faces significant sanctions after its invasion of Ukraine. EU members are still buying some of the country’s oil, but in December will ban most imports of Urals crude, followed by a prohibition on oil products in February. That could slash Russia’s oil output by nearly 2 million barrels a day compared with the pre-invasion levels, unless the flows are distributed elsewhere, the International Energy Agency estimates. Russian companies have already been redirecting their cargoes to Asia, mainly to India and China, as some European buyers voluntarily shun their oil. This has come at a cost, with Urals trading at deep discounts to global benchmarks. A redistribution of global crude flows could partially displace exports from other OPEC+ members. In Indonesia, “one of the prime candidates to be supplanted is Nigeria,” while in Pakistan “we would not be surprised to see lower Arab Light flows” from Saudi Arabia, Kpler said. The Middle East, which, could take as much as 500,000 barrels per day of Russian crude this winter, could redirect oil previously used domestically to export markets, according to Kpler. “The temptation might be to feed Urals into the refineries and let the likes of Arab Light flow freely in Asia,” it said.
India to source most crude supplies from Gulf in near future: Hardeep Puri - Most of India’s crude oil supplies will come from Gulf countries, including Saudi Arabia, Iraq and the UAE, in the near future the world’s third largest oil importer seeks a secure and affordable energy base, India’s minister of petroleum and natural gas, Hardeep Singh Puri, said. Crude oil imports from Saudi Arabia by the world’s third consumer nation rose in July by more than 25 per cent after Saudi Arabia lowered the official selling price in June and July compared with May. Saudi Arabia stayed at the third spot among India’s suppliers. “As far as India is concerned, I see for the foreseeable future much of our crude oil supplies will be coming from Saudi Arabia, Iraq, Abu Dhabi, Kuwait, among others,” Puri was quoted in an interview on the sidelines of the Gastech conference in Milan. India consumes around 5 million barrels of oil per day and this largely comes from Iraq, Saudi Arabia, Kuwait and the UAE. Although oil imports from Russia declined by 7.3 per cent in July from the June levels, Moscow remained the country’s second biggest oil supplier after Iraq. Even as the European Union is mulling over a ban on Russian oil, India is gaining from the discounts offered by the country. As of August, India is receiving oil from Russia at a discount of $5-6 per barrel. In August, Russia was India’s third-largest oil supplier, meeting 18.2 per cent of all the country’s oil needs. Saudi Arabia was India’s largest oil supplier at 20.8 per cent and Iraq at 20.6 per cent. Supplies from Iraq fell 18 per cent in August, as compared to July. Puri said that by the end of the fiscal year on March 31, 2022, India’s purchases from Russia represented only 0.2 per cent, but rose later as the global situation became problematic. “We started to buy a little more, but we still buy a fraction of what Europe buys from Russia. A democratically elected government like what we have in India will make sure that the consumers are provided with energy (not only) on a secure basis, but also on an affordable basis,” he said. Indian refiners have been snapping up relatively cheap Russian oil, shunned by Western companies and countries since sanctions were imposed against Moscow for what it calls a “special military operation” in Ukraine. India’s imports from Russia oil rose by 4.7 times, or more than 400,000 barrels per day, in April-May, but fell in July. During the June quarter, crude imports from Russia valued at $3.02 billion contributed 71 per cent of the total imports from the country ($4.2 billion). China and India have increased their purchases of Russian oil following the Kremlin’s attack on Ukraine, benefiting from discounted rates.
Diesel Margins Tank -The cost of diesel is plunging around the world as traders weigh the impact of a potential new quota for Chinese fuel exports. Europe’s ICE gasoil crack, which measures the price of diesel futures relative to crude oil contracts, plummeted to its lowest in more than a month earlier on Wednesday. Margins for diesel-type fuel also fell sharply in the US and Singapore. China’s Ministry of Commerce may issue a fuel export quota of 1.5 million tons in a fourth batch allocation, industry consultant OilChem said earlier. It’s unclear how much of this fuel quota would be diesel. While the volume is relatively small compared with overall China fuel exports, the extra quota signals a weakening outlook for oil demand in Asia’s largest economy, said traders. Beijing’s strict Covid Zero policy means the threat of more virus lockdowns is ever-present. Diesel is regularly shipped around the world on oil tankers, so higher supply and any subsequently weaker prices in one region affects other markets. Even though margins have tumbled, they remain elevated by historical standards. In Europe, the ICE gasoil crack stood at about $35 a barrel around 11.45 am Singapore time -- roughly triple the five-year seasonal average. The Singapore 10ppm gasoil crack over Dubai crude was near $33 a barrel. A potential export quota of 1.5 million tons would equate to about 11.2 million barrels, if it were all diesel. This year, the world’s daily demand for diesel-type fuel is pegged at a little over 28 million barrels a day by the International Energy Agency. China’s gross exports of diesel, gasoline and kerosene have trailed year-ago levels by about 580,000 barrels a day so far this year, the IEA said. The agency revised down its expectation for this year’s Chinese refinery runs in its monthly oil market report on Wednesday, and also expects an annual drop in the country’s overall demand. The predicted annual decline in refinery throughputs is “unprecedented,” and the consequent lack of supply was expected to be made up by lower product exports. Along with potential Chinese supplies, the diesel market is also facing demand-side pressures. “In Europe there is the potential for energy rationing in the winter which will also impact commuting and industry, key demand sectors for diesel,” said Jonathan Leitch, an oil analyst at Turner, Mason & Co. “There are also worries that high inflation with rising interest rates will be recessionary, cutting industrial output and therefore the demand.”
42 US gallons of crude leaked into Guyana’s waters- ExxonMobil – -- The ExxonMobil-controlled Esso Exploration Production and Guyana Limited (EEPGL) on Saturday said at least one barrel (42 US gallons) of crude oil leaked into Guyana’s Atlantic Ocean waters, but sought to downplay the severity of the incident. “On Friday, September 9, 2022, the team on the Liza Unity FPSO observed a sheen on the water in the vicinity of the vessel. Initial investigations indicate that approximately one barrel of crude oil was released during a maintenance activity on the vessel. The activity was immediately stopped and the leak isolated,” ExxonMobil said. The company suggested that its latest visual observation shows that there is no sign of oil in the water. “Earlier today, additional surveillance by helicopter confirmed that there was no sheen in the area; only a light sheen was perceptible approximately 20 km (13 miles) North West of the vessel. By midday on September 10th, a support vessel in the area confirmed no further sign of a sheen,” Exxon said. The first indication that something had gone wrong at one of ExxonMobil’s operations offshore Guyana came some time Friday when most of the technical staff began returning to shore. The company, according to well-placed sources, has since flown in experts to address the first reported oil spill. While ExxonMobil said “we notified all relevant government agencies including the Environmental Protection Agency,” none of the government agencies such as the Ministry of Natural Resources, Environmental Protection Agency and the Civil Defence Commission said anything about the incident. The Civil Defence Commission has received several training sessions and material support to prepare its oil spill response capacity.
FG loses 13.21m-barrels oil worth N603.64bn in 2022 - Nigeria lost about 13.21 million barrels of crude oil with an estimated worth of N603.64bn between January and August this year, an analysis of the monthly reports of the country’s crude oil and condensate production showed. Figures contained in the reports, obtained from the Nigeria Upstream and Downstream Petroleum Regulatory Commission in Abuja on Sunday, indicated that the country’s oil production only increased in two months, but crashed in others. Total crude oil production (without condensates) in January, for instance, was 43.35 million barrels, but this dropped to 35.22 million barrels in February, indicating a loss of 8.13 million barrels. It moved up in March, increasing by 3.14 million barrels to close at 38.36 million barrels in the third month of 2022. This, however, was not sustained, as production dropped to 36.58 million barrels in April and the country lost 1.78 million barrels in that month. The losses continued in May after oil production crashed to 31.76 million barrels, representing a loss of 4.82 million barrels when compared to what was produced the preceding month. It increased in June to 34.75 million barrels, representing an oil production gain of 2.99 million barrels, but that was short-lived, as output fell again in July to 33.6 million barrels, meaning the country lost 1.15 million barrels in July. The oil production losses persisted in August, crashing further to 30.14 million barrels, representing a loss of 3.46 million barrels. It was observed that the total losses stood at 19.34 million barrels, while what was gained was 6.13 million barrels, leaving a cumulative loss of 13.21 million barrels during the review period.
Oil spill from SPDC's facility in Bayelsa caused by equipment failure, says NOSDRA --The National Oil Spills Detection and Response Agency (NOSDRA) has traced an oil spill from a Shell Petroleum Development Company of Nigeria (SPDC) facility at Peremabiri community, Bayelsa state, to equipment failure. A JIV is carried out by oil company representatives, community representatives, and appropriate government agencies to agree on the cause, impact, and scale of spill incidents. According to Thisday, this is contained in a field report of the joint investigation visit (JIV) by NOSDRA. According to NOSDRA, the JIV showed that the incident, which occurred on August 24, was due to an operational mishap that discharged crude oil within SPDC’s operational area with no impact on the third party area. Return Koma, who represented the Peremabiri community on the JIV, on Tuesday, said officials of SPDC, as well as regulators, were unanimous that the incident was traced to equipment failure. “We have conducted the JIV, and they accepted responsibility for the leak incident at the flow station and another one at nearby Well 6, both were due to equipment failure,” he said. “We were unable to agree on the volume of spilled crude and so did not sign the report.”
Nigeria’s oil output plummets amid theft and export terminal issues— Nigeria’s crude oil production fell below 1-million barrels per day in August, figures from its regulator show, as the nation grappled with rampant theft from its pipelines and years of underinvestment. The decline is a further threat to strained finances in Africa’s most populous nation and cuts global oil supply amid soaring energy costs due to the war in Ukraine. Nigeria’s total oil and condensates output dropped to an annual low of 1.18-million barrels per day in August, data from the Nigerian Upstream Petroleum Regulatory Commission showed. Richard Bronze, head of geopolitics for consultancy Energy Aspects, said exports were the lowest since at least 1990 as issues at the Forcados export terminal worsened already weak supply. Data from oil cartel Opec showed that output never fell below 1.4-million barrels per day, even amid what were considered at the time to be crippling militant attacks in the Niger Delta. Industrial-scale oil theft poses an “existential” threat to what is typically Africa’s largest oil exporter, a Shell executive said in July, while President Muhammadu Buhari has said the problem is affecting state finances “enormously”. Nigeria slipped behind Angola as Africa’s largest exporter in July, according to Opec figures. Both countries are also dealing with years of low investment that impinged production. Its highest crude and condensate output this year, recorded in January, was 1.68-million barrels per day, though the country has the capability to export close to 2-million. Last month, the head of Nigerian National Petroleum Company said 700,0000 barrels per day were missing from its exports as thieves stole some oil and companies shut operations in other fields to avoid the thieves.
Kazakhstan's oil output fell 13% in August vs July – sources --Kazakhstan’s oil output, excluding condensate, fell by 13% to 1.196 million barrels per day (bpd) (5.077 million tonnes) in August from 1.378 million bpd (5.850 million tonnes) in July, two sources citing daily output data said on Monday. The fall in output was due to a sharp decline in production in the giant Kashagan oil field after a gas leak early in August, as well as planned output curbs in the Tengiz field due to regular maintenance. Kazakhstan’s Energy Ministry did not immediately respond to a Reuters’ request for comment. Kazakhstan uses a conversion rate of 7.3 barrels for 1 tonne of crude oil.
Libyan oil production rises to 1.205 million bpd - Libya’s production of crude oil has climbed to one million and 205 thousand barrels per day during the last 24 hours, the state-owned National Oil Corporation (NOC) announced on Sunday.The NOC also reported that the total domestic consumption of natural gas has reached one billion and 103 million cubic feet during the past 24 hours.The General Electricity Company of Libya (GECOL) is the biggest consumer of natural gas in the country followed by the NOC and the Libyan Iron and Steel Company, according to the oil company’s data.
Angola, Libya overtake Nigeria in crude production – OPEC - Nigeria’s oil production plunged to 972,000 barrels per day in August 2022, as Angola and Libya overtook Nigeria by producing higher volumes of crude during the review month, the Organisation of Petroleum Exporting Countries has said.OPEC disclosed this in its September 2022 report, confirming the figures released recently by the Nigeria Upstream Petroleum Regulatory Commission.The PUNCH had reported last week that Nigeria’s crude oil production slumped below one million barrels per day in August 2022, the lowest ever in several years.The report revealed that oil production in Nigeria dropped in August 2022, crashing below one million barrels per day to 972,394 bpd, the lowest ever recorded in years. It stated that figures from the NUPRC indicated that the country’s oil production dropped from 1,083,899 bpd in July to 972,394 bpd in August.Confirming this in its September 2022 oil sector report released on Tuesday, OPEC stated that the drop in Nigeria’s oil production made Angola and Libya to overtake Nigeria in oil output.The report stated that Angola was Africa’s highest crude oil producer for the month under review with an average production of 1.187mb/d.It said Libya’s crude oil production averaged also 1.123mb/d for the month of August.“According to secondary sources, total OPEC-13 crude oil production averaged 29.65 mb/d in August, higher by 618,000 month-on-month,” it stated.The report added, “Crude oil output increased mainly in Libya and Saudi Arabia, while production in Nigeria declined.”
N.Asian refiners to get full allocation of Saudi crude in October - Saudi Aramco has notified at least three North Asian buyers that it will supply full contractual volumes of crude in October, sources with knowledge of the matter said on Monday. The world’s top oil exporter has slashed its official selling prices (OSPs) to Asian buyers for the month, the first reduction in four months. The price cut was overall in line with the market expectation as the spot premiums for the Middle Eastern crude dipped since mid-August amid an increasing number of arbitrage cargoes flowing into Asia. “The market (in Asia) is still holding up. The pressure is now more on Europe instead of Asia,” said a Singapore-based trader. Spot premium for Dubai rebounded from as low as $3.53 a barrel over the Dubai quotes on Aug.23 to stand at an average of $5.6 a barrel in September. The major oil producers last week has agreed to lower oil production by 100,000 barrels per day, or 0.1% of global demand, from October to bolster oil prices which have slid on fears of an economic slowdown.
BlackRock courts investors ahead of Aramco gas pipelines bond sale –sources (Reuters) – BlackRock Inc has held meetings with investors in London to drum up interest in a bond sale to begin refinancing a $13.4 billion loan that backed the asset manager’s deal to buy a stake in Saudi Aramco’s gas pipelines network, two sources said on Tuesday. A consortium led by BlackRock agreed to a $15.5 billion lease-and-leaseback agreement with Aramco last year which gives the investors a 49% stake in newly formed subsidiary Aramco Gas Pipelines Co, which will lease usage rights in Aramco’s gas pipelines network and lease them back to Aramco for 20 years. BlackRock held meetings with investors in London, both sources, who are familiar with the matter, said. The world’s biggest asset manager also held meetings in Dubai and New York, one of the sources said. BlackRock ran the investor meetings itself, without the help of a bank, the second source said. BlackRock and Aramco did not immediately respond to Reuters’ requests for comment. A debut bond sale – expected to be the first of several – is anticipated before the end of the year, the sources said. In a similar deal last year, Aramco agreed a $12.4 billion deal to sell a 49% stake in its oil pipelines company to a consortium led by U.S.-based EIG Global Energy Partners. The EIG-led investors in Aramco Oil Pipelines Co sold bonds in January to begin refinancing the $10.8 billion loan that backed the deal. They raised $2.5 billion, falling short of a self-set target of $3.5-4.4 billion amid choppy markets. Both consortia are now expected to refinance the loans over longer timelines than previously envisioned. They may also explore other refinancing options, such as extending the existing loans or taking new bank debt, the sources said.
Iran Increases Oil Production From Joint Field With Saudi Arabia – The CEO of Petropars Oil Company Shamsuddin Mousavi announced on Monday that drilling of the second oil well of Forouzan Oilfield is being completed, and Iran increases oil extraction from the oilfield as joint field with Saudi Arabia. Mousavi said that the oil well number 12-03 has been drilled and oil production from this oil well is started. He added that his operation has been completed and according to the Seabed conditions, 950 meters of its 3,379 meters length is being horizontally drilled. The CEO said that based on the initial capacity of the oil well, 1,000 barrels of oil will be extracted per day. Forouzan Oilfield is located 100 kilometers Southeast of Khark Island at the Persian Gulf region and joint Marjan Oilfield of Saudi Arabia. The Saudi Arabian portion of the field is known as the Marjan Field, which is being expanded by Saudi Aramco. More than 80 percent of the hydrocarbon reserves of the field lie in the Saudi Arabian waters.
Iran Probes $170 Million Fraud In Petrochemical Firm - A $170 million apparent embezzlement case has left one of Iran’s natural gas producers in serious trouble and might reduce production at the onset of winter. The issue of possible fraud or some sort of corruption is not straightforward as one might expect in a typical Western company. There are Iranian nuances in the case that makes it a bit different. Mehr Petrochemicals produces the highest-grade polyethylene in the Middle East but it stands at the verge of bankruptcy, according to Eghtesad Online (Economy Online) a recognized website in Iran reporting on economic issue. The firm belongs to Persian Gulf Holding, a large Iranian quasi-governmental company that claims to be an independent entity, with 15 subsidiaries. Mehr Petrochemicals, as an Iranian company is supposed to repatriate its foreign currency earnings according to law, as it exports products and receives government dollars at preferential rates when it for importing equipment or chemicals. The problem is that it has failed to bring back $170 million to the country and apparently the money has simply vanished. The Iranian Inspector General’s office has issued a report saying that Mehr owes close to $100 million locally and its export revenues are missing. The danger in the company going bankrupt and shutting down is loss of gas output in the South Pars fields in the Persian Gulf, Iranian media say. Mehr plays a role in gas production because it needs it for producing petrochemicals.
China Mulling U-Turn for More Fuel Exports -China is considering allowing its oil refiners to export more fuel in an attempt to help revive its economy, which would be a reversal from a focus on minimizing emissions. Refiners and traders have applied for an extra 15 million tons of fuel export quota that includes gasoline and diesel, according to people familiar with the matter. If approved, that would increase the allocations so far this year to a similar level for the whole of 2021. Beijing maintains strict control over how much both its state-owned and private refiners can export. It’s been curbing shipments recently to reduce pollution and help consolidate the sector, with the amount of quota allocated so far in 2022 about 40% less than last year. China’s desire to boost economic activity could be behind the possible increase in quota, said the people who asked not to be identified as the discussions are private. The Covid Zero policy and a property crisis have weighed on Asia’s largest economy this year, with several major banks forecasting growth will be less than 3%. The Ministry of Commerce didn’t immediately reply to a fax seeking comment. The application for the additional export allocations comes as a batch of 1.5 million tons of quota is expected to be granted to Chinese refiners later this week. If the 15 million tons are approved that would take this year’s total to 39 million tons, compared with about 38.6 million tons last year. Increased fuel exports and more efficient use of refining capacity are ways to support the economic recovery, Fu Xiangsheng, an official from the China Petroleum and Chemical Industry Federation, said at an industry conference last month. The country’s state-owned refiners were running at 75.3% of capacity in the week through Sept. 10, according to CITIC Futures Co., a much lower level than in the US. China has exported a monthly average of 1.95 million tons of diesel, gasoline and kerosene in first seven months of this year, according to customs data. That compares with at least 5 million tons a month of exports that would be possible in the last three months of the year under the potential new quota, if it is confirmed. The nation exported an average 3.4 million tons of the fuels in 2021 on a monthly basis.
IEA Cuts Oil Demand Forecast As China's COVID Crisis Continues - Global oil demand is set to grow by 2 million barrels per day (bpd) this year, the International Energy Agency (IEA) said on Wednesday, revising down its growth estimate by 110,000 bpd from last month as it expects China’s oil demand to fall for the first time in more than three decades. “Growth in global oil demand continues to decelerate, weighed down by renewed Chinese lockdowns and an ongoing slowdown in the OECD,” the Paris-based agency said in its closely-watched Oil Market Report on Wednesday. The slowdown in China will be partly offset by “large-scale switching from gas to oil,” which is estimated to average 700,000 bpd in the fourth quarter of 2022 and the first quarter of 2023, double the level from a year ago, according to the IEA. Oil demand in China is expected to fall by 2.7%, or by 420,000 bpd, this year compared to last year, per IEA estimates. If the estimates are correct, this could be the first yearly decline in Chinese oil demand since 1990 and only the second such drop in IEA records since 1984.The IEA’s new estimate is now in line with several analyst forecasts that anticipate sudden Covid lockdowns will weigh on China’s oil demand this year as people avoid mass travel around holidays, dragging fuel consumption in the world’s top crude importer down for 2022 for the first time in two decades.Elsewhere in the IEA report today, figures show still very resilient Russian oil exports. Russian total oil exports actually rose by 220,000 bpd in August to 7.6 million bpd, which is down by just 390,000 bpd from pre-war levels. Estimated export revenues for Russia fell by $1.2 billion from July to $17.7 billion in August. However, the EU embargo on Russian crude oil and product imports that comes into effect in December 2022 and February 2023, respectively, is expected to result in deeper declines as an additional 1 million bpd of products and 1.4 million bpd of crude will have to find new homes, the IEA said.
World oil demand to reach 100.6m bpd in Q3: OAPEC | Arab News - The global oil demand is expected to increase over the third quarter to approximately 100.6 million barrels per day, according to a report on petroleum developments in global markets issued by the Organization of Arab Petroleum Exporting Countries. This is in line with expectations that the Organisation for Economic Co-operation and Development group's demand would rise to about 47 million bpd, and the rest of the world’s demand would rise to about 53.6 million bpd. This is also despite the fact that preliminary estimates indicate global oil demand fell to about 98.3 million bpd during the second quarter, down by 1 percent from the same period last year. The report also revealed that OECD demand fell 0.7 percent during the second quarter to about 45.5 million bpd, whereas the remainder of the world’s demand fell 1.2 percent to about 52.8 million bpd. The monthly average price of OPEC crude oil fell to $108.32 per barrel in July 2022, about 8 percent below the previous month. OPEC has projected that in 2022 the common annual value of a basket of crude oil will rise to $105.71, an increase of 51.3 percent over the previous year. The report indicated that the common value of an OPEC crude oil basket reached $117.7 per barrel in June 2022, up 3.3 percent compared with May 2022. This is primarily due to strong fundamentals in the oil market, high refiner demand, high profit margins, as well as supply disruptions in several key production areas, such as Libya and Ecuador.
Oil Gains as Traders Assess G7 Plan to Cap Russian Price -- Oil futures advanced in starting the new trading week, as investors refocused on the risk of supply disruption from Russia amid G7 talks aimed at capping the price on Russian crude and refined products exports in a move that could prompt the government of Vladimir Putin to throttle back oil output. More details for a G7 plan to cap the price of Russian oil exports began to emerge and the industry appears to be on edge over the possible risks the novel measure could entail. U.S. Treasury Department on Sunday issued an early guidance of compliance that bars financial institutions and shipping companies in G7 countries from providing tankers, insurance, and other critical financial services for seaborne shipments of Russian oil unless the sales fall under a set price cap. The measure will offer three different price controls, one for crude oil and two for refined petroleum products. The exact level of the price cap has yet to be finalized, but it has been stressed that it must be set above the breakeven costs for Russian producers and shipping and insurance costs. For reference, an average cost for Russian oil production varies between $30 and $40 barrel (bbl), although remote basins in Eastern Siberia and Arctic have a much higher price tag due to harsh climate and infrastructure challenges. The measure is likely to override the European Union ban on purchases of Russian oil and refined products that is set to take place on Dec. 5 and Feb. 5, 2023, respectively, which should in theory allow for more Russian oil available on the global market. The risk, however, is that Putin could retaliate by cutting oil production, tearing down export contracts that would send global oil prices higher. Such a decision by the Russian president would be catastrophic for the country's oil industry that might never recover from such a heavy blow but highlights the enormous uncertainty for global oil markets. According to International Energy Agency, Russia currently is the world's third largest oil producer, pumping around 10.9 million barrels per day (bpd), behind only Saudi Arabia with 11 million bpd and the United States with 12.1 million bpd. In the first half of 2022, Russia supplied over 8.2 million bpd of crude and refined products to the global market. A complete shutdown of Russian oil exports makes it extremely difficult to calculate the associated risks to the global economy, markets and geopolitics. Near 7:30 AM ET, NYMEX October West Texas Intermediate futures advanced $0.68 to $87.46 bbl, while Brent for November delivery climbed to $93.74, up $0.91. NYMEX October RBOB futures rallied 1.86 cents to $2.4525 gallon, and NYMEX October ULSD futures gained 4.75 cents to $3.6262 gallon. Liubov Georges can be reached at
Oil prices rise as supply uncertainty mounts -- Oil prices rose on Monday as Iranian nuclear talks appeared to hit obstacles and an embargo on Russian oil shipments loomed, with tight supply struggling to meet still robust demand. Brent crude futures ended the day at $94 per barrel, for a gain of 1.25%. U.S. West Texas Intermediate crude settled 99 cents, or 1.1%, higher at $87.78 per barrel. Prices were little changed last week as gains from a nominal supply cut by the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, were offset by lockdowns in China, the world's top crude importer. France, Britain and Germany on Saturday said they had "serious doubts" about Iran's intentions to revive a nuclear deal, in a development which might keep Iranian oil off the market and keep global supply tight, Global oil prices may rebound towards the end of the year as supply is expected to tighten further when a European Union embargo on Russian oil take effect on Dec. 5. The G7 will implement a price cap on Russian oil to limit Russia's lucrative oil export revenue following its invasion of Ukraine in February, and plans to take measures to ensure that the oil could still flow to emerging nations. In more bearish news for markets, China's oil demand could contract for the first time in two decades this year as Beijing's zero-COVID policy keeps people at home during holidays and reduces fuel consumption. "The lingering presence of headwinds from China's renewed virus restrictions and further moderation in global economic activities could still draw some reservations over a more sustained upside," Also, the European Central Bank and the Federal Reserve are prepared to increase interest rates further to tackle inflation, which could lift the value of U.S. dollar against currencies and make dollar-denominated oil more expensive for investors.
Oil Prices Climb As Dollar Weakens Ahead Of US Inflation Report -- Oil prices rose on Tuesday as focus shifted to U.S. inflation data and the OPEC's monthly outlook report both due later in the day. Rising speculation about the impact of Ukraine's offensive around Kharkiv on supply of Russian oil and uncertainty about revival of the Iranian nuclear deal also supported prices. Benchmark Brent crude futures rose 1.1 percent to $95.02 per barrel, while WTI crude futures were up 1.2 percent at $88.81. The dollar was on the backfoot ahead of U.S. inflation data due later in the day that could show some signs of softening in August. The U.S. inflation report is expected to show a continued slowdown in the annual rate of consumer price growth to 8.1 percent in August from 8.5 percent in July. German harmonized inflation released earlier in the day was confirmed at 8.8 percent in August, unrevised from the preliminary reading. Traders await the OPEC's monthly outlook report for cues on global demand. The oil producer group surprised markets with a small production cut last week while many expected the cartel to stay the course with its production policy.
Oil dips, reversing gains after bearish U.S. economic data - Oil prices fell on Tuesday in choppy trading, reversing earlier gains as U.S. consumer prices unexpectedly rose in August, giving cover for the U.S. Federal Reserve to deliver another hefty interest rate increase next week. Brent futures for November ended the day at $93.17 per barrel, for a loss of 0.88%. U.S. crude settled 47 cents, or 0.5%, lower at $87.31 per barrel. The consumer price index gained 0.1% last month after being unchanged in July, the U.S. Labor Department said. Economists polled by Reuters had forecast a 0.1% fall. Fed officials are set to meet next Tuesday and Wednesday, with inflation way above the U.S. central bank's 2% target. "The Fed may have to raise rates quicker than expected which could cause a 'risk back off' sentiment in crude and further strength to the dollar," Oil is generally priced in U.S. dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies. Renewed COVID-19 curbs in China, the world's second-largest oil consumer, also weighed on crude prices. The number of trips taken over China's three-day Mid-Autumn Festival holiday shrank, with tourism revenue also falling, official data showed, as COVID-linked restrictions discouraged people from travelling. Both contracts rose by more than $1.50 a barrel earlier in the session, supported by concerns over tighter inventories. "The oil market's structural outlook remains one of tightness, but for now, this is offset by cyclical demand headwinds," Morgan Stanley said in a note. The U.S. Strategic Petroleum Reserve (SPR) fell 8.4 million barrels to 434.1 million barrels last week, the lowest since October 1984, according to government data on Monday. The United States may begin refilling the SPR when crude prices fall below $80 per barrel, a Bloomberg reporter said on Twitter. U.S. commercial oil stocks were forecast to have risen 800,000 barrels last week, analysts forecast in a Reuters poll. Prospects for a revival of the West's nuclear deal with Iran remained dim. Germany expressed regret on Monday that Tehran had not responded positively to European proposals to revive the 2015 agreement. U.S. Secretary of State Antony Blinken said that an agreement would be unlikely in the near term. The Organization of the Petroleum Exporting Countries on Tuesday stuck to its forecasts for robust global oil demand growth in 2022 and 2023, citing signs that major economies were faring better than expected despite headwinds such as surging inflation.
WTI Steady Above 'Biden Floor' Despite Another Big Crude Build - Oil prices ended modestly lower on the day - about the only asset that didn't get destroyed - as chatter that the Biden admin will bid crude at $80/bbl to refill the SPR sent prices rebounding higher after they were crushed by the hawkish shift from hot CPI.“It may not be a catalyst for $100 crude but does offer a buffer to the downside risk that the market is worrying about,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.Separately, US Secretary of State Antony Blinken said it was “unlikely” the US and Iran would reach a new nuclear deal anytime soon, echoing recent comments from France, Germany and the UK, and pushing back the likelihood of any substantial increase in Iranian oil shipments in the near term.But for now, any hints that last week's unexpectedly large build in crude stocks continues has all eyes focused on API tonight ahead of tomorrow's official data. API
- Crude +6.035mm (-200k exp)
- Cushing +101k
- Gasoline -3.23mm
- Distillates +1.75mm
For the second week in a row, if API data is confirmed tomorrow, US Crude inventories built dramatically... WTI was hovering around $87.50 ahead of the API print and remained stable after the crude build...
Oil Wobbles After IEA Lifts 2022 Demand Outlook, USD Slips - In early trading Wednesday, ULSD futures accelerated a sell-off on concern higher interest rates would push the U.S. economy into recession, while West Texas Intermediate softened in pre-inventory trade after the International Energy Agency raised its global demand outlook for the remainder of the year, citing soaring oil use for power generation and gas-to-oil switching across large economies in Asia and the European Union. In its closely watched monthly Oil Market Report released Wednesday morning, IEA raised its global demand forecast by 380,000 barrels per day (bpd) this year for annualized growth of 2.1 million bpd. World oil demand is now seen at 99.7 million bpd in 2022 and 101.8 million bpd in 2023. "With several regions experiencing blazing heatwaves, the latest data confirm increased oil burn in power generation, especially in Europe and Asia. Fuel switching is also taking place in European industry, including refining," said IEA. Relative gains in global oil demand come despite weakness in other areas of the global economy and sharp slowdown in China's fuel consumption where COVID-19 restrictions shaved 400,000 bpd from oil demand this year and 300,000 bpd in 2023. China's oil consumption is still seen recovering to a pre-pandemic high of 16 million bpd next year. At the same time, the agency estimates Russian oil exports fell by 115,000 bpd in July to 7.4 million bpd and from about 8 million bpd at the start of the year. Russian crude and oil product flows to the United States, United Kingdom, EU, Japan, and Korea have slumped by nearly 2.2 million bpd since the outbreak of the war, two-thirds of which have been rerouted to other markets, notably Asia. Lower exports to G7 economies come ahead of an expected price cap agreement on Russian seaborne crude and petroleum products exports that could further slash Russian oil volumes on the global market. On the supply side, IEA estimates worldwide oil output reached post-pandemic high of 100.5 million bpd in July as maintenance ended in the North Sea, Canada and Kazakhstan. OPEC+ ramped up total oil production by 530,000 bpd in line with higher targets and non-OPEC+ rose by 870,000 bpd. World oil supply is set to rise by a further 1 million bpd by year-end. In its report, IEA revised its forecast for Russian oil output but have lowered the outlook for North America. Further weighing on the complex, the American Petroleum Institute reported on Tuesday commercial crude oil inventories in the United States surged 6.035 million barrels (bbl) for the week ended Sept. 9, six times estimates for a 1-million-bbl build. Stocks at the Cushing, Oklahoma, tank farm, the delivery point for WTI futures, also added 101,000 bbl. API reported distillate inventories increased 1.75 million bbl in the week ended Sept. 9, well above calls for an increase of 100,000 bbl. Gasoline stocks, meanwhile, tumbled 3.23 million bbl in the week profiled, more than five times estimates for a 600,000 bbl decrease. The risk higher interest rates could tip the U.S. economy into recession pressured ULSD futures, which correlates closely with the economy's performance. NYMEX October ULSD futures plummeted 15.83 cents to $3.3848 gallon. Meanwhile, the prospect of a national rail strike that could upend ethanol deliveries underpinned strength in the gasoline contract, with NYMEX October RBOB futures adding 1.56 cents in early trading to $2.4964 gallon. NYMEX WTI for October delivery was flat near $87.35 bbl, and Brent crude on ICE traded little changed near $93.20 bbl.
WTI Holds Gains Despite Big Distillates Build, Record SPR Release - Oil prices are up this morning, but off their highs following the IEA's cut to its global demand growth outlook (due to China lockdowns). Price drifted lower overnight after the surprise crude build reported by API, but the 'Biden Bottom' under prices remains in place (SPR refill bid) and seems to be sustaining a BTFD nature in the crude complex and reports that the Chinese megacity of Chenddu announced it would gradually loosen lockdowns - a bullish sign for demand - provided some support this morning.“The market seems to be well and truly stuck with no clear direction for the time being,” said Ole Hansen, head of commodities strategy at Saxo Bank. “The market is getting even more concerned central banks led by the FOMC could tip the global economy over the edge in their pursuit of lower inflation.” This morning's official inventory and demand data may be the algo's catalysts for the next leg one way or the other. DOE
- Crude +2.442mm (+1.83mm exp)
- Cushing -135k
- Gasoline -1.768mm
- Distillates +4.219mm (biggest build since Dec 2021)
US Crude inventories built for the second week in a row and distillates stocks exploded higher...As a reminder, the Biden admin released a record 8.4mm barrels of oil from the SPR last week so the net commercial crude draw was actually around 6mm barrels... Gasoline demand plunged further below 2020 levels, despite the fact that prices continue to ease and shelved summer road trips are no longer a factor. The four-week moving average of product supplied is down to 8.56 million barrels a day, nearly 200,000 barrels below where it was at this time two years ago. Even with demand floundering, the EIA reported a huge 1.8 million barrel draw in gasoline inventories, bringing them to their lowest seasonal level since 2014. US Crude production was flat as rig counts have started falling (drilling activity in the US shale patch has reversed course for the first time since its collapse in 2020)... WTI had slipped below $88.50 ahead of the official data and rallied modestly after the data... Finally, Bloomberg Intelligence Senior Oil & Gas Analyst Fernando Valle notes that "a potential US rail strike may have significant consequences for diesel demand, helping to restore depleted inventories, but at a major cost to the economy. Demand may see an impact of up to 600,000 barrels a day, we calculate, close to 15% of US consumption if there’s a strike. But its long-term effects may be even greater, given the potential to disrupt supply chains and push further declines in construction and durable goods orders. Reduced economic activity may also affect gasoline demand over the coming months. "
Oil Falls on Demand Concerns as DOE Clarifies SPR Refill Plan -Oil fell with demand concerns at the fore as the US Department of Energy walked back expectations of its plan to restock petroleum reserves and China considered allowing more fuel exports. West Texas Intermediate futures dropped 3.8% to settle at $85.10 a barrel. The DOE said its plan to replenish the nation’s emergency oil supply doesn’t include a trigger price and isn’t likely to occur until after fiscal 2023. Earlier this week prices rallied after Bloomberg News reported that administration officials have discussed refilling the Strategic Petroleum Reserve should crude dip below $80, suggesting a potential floor for prices. “The White House sending mixed messages on the strategic reserve has pushed this market up and down,” said Phil Flynn, senior market analyst at Price Futures Group. “They’re putting out some trial balloons to see how their buying is going to impact prices.” Meanwhile, China is considering exporting more fuel, a move designed to boost the economy but which also raises questions about how much domestic consumption is falling amid Covid-19 lockdowns. The news comes after the International Energy Agency said Wednesday the country will see its biggest drop in demand for oil in more than three decades. Oil is on course for the first quarterly loss in more than two years as central banks including the Federal Reserve tighten monetary policy to tame inflation, hurting the outlook for energy consumption. The retreat has erased all the gains seen in the wake of Russia’s invasion of Ukraine, with prices earlier this month hitting the lowest since January. Refined product prices have declined significantly in the few past days on seasonal demand drops while China prepares to ramp up fuel exports. Diesel’s prompt spread shrank to $2.77, down from $7.45 earlier this month. The diesel crack, which measures diesel futures relative to crude oil contracts, fell to its lowest in over a month. WTI for October delivery fell $3.38 to settle at $85.10 in New York. Brent for November settlement slid to $3.26 to $90.84 at market close. Widely watched oil-market time spreads have been volatile. Brent’s prompt spread -- the difference between its two nearest contracts -- was $1.23 a barrel in backwardation. That compared with 90 cents a week ago, while the measure was more than $2 as recently as last month.
Oil up by 1% to $94.10 a barrel on supply concerns, expected fuel switching (Reuters) -Oil edged up 1% on Wednesday as an international energy watchdog expects an increase in gas-to-oil switching due to high prices this winter, even though the outlook for demand remains gloomy. Brent crude futures settled up 93 cents, or 1%, at $94.10 a barrel, while U.S. West Texas Intermediate crude ended $1.17, or 1.3%, higher at $88.48. The International Energy Agency (IEA) expects the deepening economic slowdown and a faltering Chinese economy to cause global oil demand to grind to a halt in the fourth quarter of the year. That has kept prices under pressured of late, and may inhibit further rallies. The IEA also said it expects widespread switching from gas to oil for heating purposes, saying it will average 700,000 barrels per day (bpd) in October 2022 to March 2023 - double the level of a year ago. That, along with overall expectations for weak supply growth, helped boost the market. Global observed inventories fell by 25.6 million barrels in July, the IEA said. In the United States, however, crude inventories rose last week for a second week in a row, once again boosted by the ongoing releases from the Strategic Petroleum Reserve (SPR), latest government data showed. Commercial stocks rose by 2.4 million barrels as 8.4 million barrels were released from the SPR, part of a program scheduled to end next month. [EIA/S] "The crude number suggests that once we wind down the clock on the Strategic Petroleum Reserve release, we're going to see substantial drawdowns in inventories so that's keeping oil high," Traders also said the lack of certainty around a possible U.S. rail stoppage due to an ongoing labor dispute is adding a bit of support to the market. Three unions are negotiating for a new contract that could affect rail shipments, which are important for crude and product deliveries. The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday said global oil demand in 2022 and 2023 will come in stronger than expected, citing signs that major economies are faring better than expected despite challenges such as surging inflation..
Oil Prices Surge On Weakening Dollar, Potential Supply Disruptions (Reuters) -Oil prices edged upwards in early Asian trade on Thursday, as supply concerns and a looming rail stoppage in the United States, the world's biggest crude consumer, supported markets. Brent crude futures rose 38 cents, or 0.4%, to $94.48 a barrel by 0013 GMT, while U.S. West Texas Intermediate crude rose 46 cents, or 0.5%, to $88.94. The dollar index slipped 0.14% on Wednesday, dialing back the previous session's gains, lifting demand for dollar-denominated commodities such as crude oil from holders of other currencies. The International Energy Agency (IEA) said Wednesday it expects widespread switching from gas to oil for heating purposes, saying it will average 700,000 barrels per day (bpd) in October 2022 to March 2023 - double the level of a year ago. That, along with overall expectations for weak supply growth, also helped boost the market. The increasing likelihood of a U.S. rail stoppage due to an ongoing labor dispute is also adding support to the market. Three unions are negotiating for a new contract that could affect rail shipments, which are important for crude and product deliveries. TotalEnergies SE cut production at its 238,000 barrel-per-day (bpd) Port Arthur, Texas, refinery because of the planned shutdown of two sulfur recovery units (SRUs) on Wednesday, said sources familiar with plant operations.
Oil slumps 3% on U.S. rail agreement, demand concerns Oil futures fell about 3% to a one-week low on Thursday on a tentative agreement that would avert a U.S. rail strike, expectations for weaker global demand and continued U.S. dollar strength ahead of a potentially large interest rate increase.Brent futures fell $2.70, or 2.95%, to $91.40 a barrel by 1:18 p.m. EDT (1718 GMT), while U.S. West Texas Intermediate (WTI) crude fell $2.79, or 3.2%, to $85.69. Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by President Joe Biden’s administration to avert a rail shutdown that could have hit food and fuel supplies across the country and beyond. The prospect of a strike lent the market some support on Wednesday. That rail deal also helped pressure U.S. diesel and gasoline futures to drop more than 5% earlier in the session. “The oil complex is drafting back down on U.S. dollar strength and the tentative agreement that would avert a U.S. rail workers strike,” The U.S. 3:2:1 crack spread – a measure of refining profit margins – was on track for its lowest close since early March. Downside risks continue to dominate the global economic outlook and some countries are expected to slip into recession in 2023, but it is too early to say if there will be a widespread global recession, according to the International Monetary Fund (IMF). Some Wall Street indexes were in the red while the dollar held near the 20-year high it hit on Sept. 6 as investors digested stronger-than-expected economic data and prepared for an aggressive interest rate hike from the Federal Reserve next week. A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies. The International Energy Agency (IEA) said this week that oil demand growth would grind to a halt in the fourth quarter. Crude prices have dropped substantially after a surge close to its all-time highs in March after Russia’s invasion of Ukraine added to supply concerns, pressured by the prospects of recession and weaker demand. Other factors weighing on oil prices included an increase in U.S. crude inventories and an expected reduction in energy use by the Ethereum blockchain. U.S. crude stocks rose by a more than expected 2.4 million barrels, boosted by a record weekly release from the Strategic Petroleum Reserve, which is scheduled to end next month. The European Union’s executive, meanwhile, plans to raise more than 140 billion euros ($140 billion) to shield consumers from soaring energy prices by skimming off revenue from low-cost electricity generators and making fossil fuel firms share windfall profit.
Oil Futures Head for Third Weekly Loss on Recession Fears - Oil futures nearest delivery moved mixed early Friday, although all petroleum futures contracts are heading for a third weekly loss amid persistent fears that higher interest rates from the Federal Reserve in coming months will push the U.S. economy into a recession, denting demand growth for oil and petroleum products. This week's economic data solidified the case for at least a 75-basis-point rate increase at the Federal Open Market Committee meeting on Sept. 20-21, with odds rising for the central bank to hike rates even more aggressively. The odds for a 100-basis-point move from the Fed next week, which would be the biggest since 1984, are currently holding around 20%, based on data reflected in the CME Group's Fed Watch, with bets on follow-up hikes likely to lift the Fed Funds rate to between 4.25% and 4.5% by the end of February. Inflation in the U.S. shows no signs of abating, with core consumer prices accelerating by 0.6% in August, double the increase seen over the month of July, even as gasoline prices declined in both months. U.S. retail sales for August showed continued demand for goods and services despite rapidly tightening financial conditions and high inflation. Americans spent more on groceries, cars, and apparel as gasoline prices fell for the second month through August, potentially boosting inflation for core consumer goods. Excluding gas stations, actual retail sales rose by 0.8% in August, up sharply from a negative 0.2% seen in the previous month. Continued strong job growth and rising wages are likely giving consumers a tailwind, even as they grapple with rapidly rising prices for everyday goods. Economists say that alone would keep the Federal Reserve on track to raise the benchmark federal funds rate in an effort to slow demand and inflation. The World Bank this week forecasted the global economy would see the steepest slowdown since the early 1970s, adding that a "moderate hit to the global economy over the next year could tip it into recession." The expected slowdown of the business cycle and potential for recession is evident in diesel markets where demand for the middle of the barrel fuel that closely correlates with economic performance plunged more than 35 cents this week. Diesel supplied to the U.S. market slumped 17% last week alone to the lowest level since December 2020 at 3.132 million barrels per day (bpd). Over the past four weeks, distillate fuel consumption averaged 3.6 million bpd, down by more than 11% from the same period last year. Near 9:00 a.m. EDT, NYMEX West Texas Intermediate added $0.15 to trade near $85.12 barrel (bbl), while the international crude benchmark for November delivery gained to $91.19 bbl. NYMEX October RBOB futures declined by 1.54 cents to $2.4152 gallon, while the front-month ULSD futures gained 0.66 cents to $3.1788 gallon.
Oil Prices up After Basra Spill, but Log Weekly Decline (Reuters) -Oil prices rose slightly on Friday as a spill at Iraq's Basra terminal appeared likely to constrain crude supply, but remained down on the week on fears that hefty interest rate increases will curb global economic growth and demand for fuel. Brent crude futures settled at $91.35 a barrel, up 51 cents, while U.S. West Texas Intermediate (WTI) crude futures settled at $85.11 a barrel, up 1 cent. Both benchmarks were down by nearly 2% on the week, hurt partly by the U.S. dollar's strong run, which makes oil more expensive for buyers using other currencies. The dollar index was largely flat on the day but up for its fourth week in five weeks. In the third quarter so far, both Brent and WTI are down about 20% for the biggest quarterly percentage declines since the start of the COVID-19 pandemic in 2020. Oil exports from Iraq's Basra oil terminal are being gradually resumed after they were halted last night due to a spillage, which has been contained, Basra Oil Company said. The spill at the port, which has four loading platforms and can export up to 1.8 mln barrels per day, drove up prices on the prospect of lower global crude supply. Investors are bracing for a large increase to U.S. interest rates, which could lead to a recession and reduce fuel demand. The Federal Reserve is widely expected to raise its benchmark overnight interest rate by 75 basis points at a Sept. 20-21 policy meeting. The market also was rattled by the International Energy Agency's outlook for almost zero growth in oil demand in the fourth quarter owing to a weaker demand outlook in China. "Both the IMF and World Bank warned that the global economy could tip into recession next year. This spells bad news for the demand side of the oil coin and comes a day after the IEA forecast (on) oil demand," Other analysts said sentiment suffered from comments by the U.S. Department of Energy that it was unlikely to seek to refill the Strategic Petroleum Reserve until after the 2023 financial year. On the supply side, the market has found some support on dwindling expectations of a return of Iranian crude as Western officials play down prospects of reviving a nuclear accord with Tehran. Oil prices could also be supported in the fourth quarter if OPEC+ members cut production, which will be discussed at the group's October meeting. Europe faces an energy crisis driven by uncertainty on oil and gas supply from Russia. U.S. crude supply appeared headed for an increase, as energy firms this week added oil and natural gas rigs for the first time in three weeks as relatively high crude prices encouraged some firms to drill more, mainly in the Permian Basin, according to energy services firm Baker Hughes Co.
Oil Posts Third Weekly Loss as Recession Fears Rise | Rigzone - Oil settled at its third weekly loss as mounting evidence of an economic slowdown overshadows supply-risk concerns. West Texas Intermediate futures settled at $85.11 a barrel, down 1.9% from the prior week. Hotter-than-expected inflation figures fanned expectations that more interest-rate hikes will crimp growth, while a warning from FedEx Corp. Friday was seen as proof that the US economy has started slowing. “This was the week that energy traders started to believe that the US economy is headed for a rough patch,” “Global recession fears are becoming the consensus view and that is troubling for the short-term crude demand outlook.” Nonetheless, the potential for more supply disruptions from Russia remains a risk, while China’s economic data suggested stimulus measures there were having some success ramping up demand. Taken together with OPEC’s recent moves to support prices, traders said they see $85 a barrel as basic footing for the oil market. Global oil consumption is being threatened by a darkening economic outlook. A hawkish US Federal Reserve, the risk of a recession in Europe due to a severe energy crisis, and China’s continued Covid-19 lockdowns are all adding pressure to the commodity. Diesel prices -- often correlated to the global growth outlook -- have slumped this week and several banks have cautioned on the outlook. Also restraining oil price gains, the Bloomberg dollar gauge traded near a record this week on the outlook for tighter monetary policy. A rising greenback makes commodities more expensive for buyers outside of the US. Despite the more ominous economic picture, Russian supply disruptions remained a wildcard in oil markets. In an effort to stave off a looming energy crisis this winter stemming from curtailed Russian flows, Germany seized the local unit of Russian oil major Rosneft PJSC, including stakes in three refineries. One of the plants, PCK Schwedt, is now preparing for potential retaliation from Russia such as short-term restrictions in the crude supplied via the Cold War-era Druzhba pipeline. WTI for October delivery rose 1 cent to settle at $85.11 a barrel in New York. Brent for November settlement rose 51 cents to $91.35 a barrel..
UN Rights Official Blasts U.S. Sanctions on Iran -- A senior UN human rights official has issued her final report on her visit to Iran, criticiz- ing unilateral sanctions imposed on the country, calling for the re- moval of unilateral coercive meas- ures (UCMs), and asking the world body to come up with mechanisms of compensation for victims of such measures. Alena Douhan, UN special rap- porteur on the negative impact of unilateral coercive measures on the enjoyment of human rights, paid an 11-day visit to Iran in May, meeting with the country’s human rights officials and members of nongovernmental organizations. She said at that time that her visit was aimed at gathering information on the impact of sanctions in order to hold countries imposing such unilateral measures to account. On Monday, Iran’s High Coun- cil for Human Rights released the main highlights of Douhan’s report, in which she has given a detailed account of the impact of unilateral sanctions on various economic, fi- nancial, medical, and humanitarian aspects of Iranians’ life, calling for countries imposing those sanctions to remove them in accordance with the rules of international law. “Since 1979, the U.S. has im- posed economic, trade and finan- cial sanctions, with a compre- hensive trade ban since 1995 and significant measures to isolate Iran from the international commercial and financial system... However, since the mid-2000s, a series of executive orders and specific laws have created a broad and compli- cated framework of prohibitions and bans, which intensified after 2010 and extended to the energy sector and other key economic sec- tors,” she said.
Israeli Prime Minister Announces In Berlin: Iran Nuclear Talks "Dead" --In yet more confirmation that the long-running attempt to reach a restored JCPOA Iran nuclear deal has failed, a senior Israeli official representing Prime Minister Yair Lapid on Monday declared that Iran talks are "dead". This comes as the Israeli government has been touting its "successful" lobbying of the US administration to not go through with a 'bad deal': A senior Israeli official called on Europe and the US on Monday to begin talking about demands for a "longer, stronger" nuclear agreement with Iran, saying current talks aimed at reviving a 2015 pact were dead after Jerusalem provided proof that Tehran had not been forthright during negotiations.Lapid and his top aides were in Berlin Monday, where the Israeli Prime Minister says he passed German Chancellor Olaf Scholz "sensitive and relevant intelligence information" on Iran’s nuclear programThe day prior, Germany, France, and the UK issued a joint statement calling out Iran's sincerity and motives in seeking a restored nuclear agreement, citing "serious doubts" the Western signatories to the original JCPOA have. A senior Israeli official traveling with Lapid told reporters: "We gave information to the Europeans that proved that the Iranians are lying while talks are still happening." "There’s not going to be a JCPOA, say the Americans and most Europeans. They say, ‘We have a lot of reservations about the possibility of a nuclear agreement,'" the official added, as quoted in The Times of Israel. "There are no talks right now with Iran. There is no one in Vienna."
No comments:
Post a Comment