US oil imports at a 4 year high, oil production at a 41 month high; global oil supply was 1,360,000 barrels per day short of global demand in August as OPEC's output was 816,000 barrels per day below the level they said they'd cut to.
US oil prices rose for the 10th time in eleven weeks and ended the week 3.7% higher at $90.77 a barrel, topping $90 for the first time in 10 months, propelled by forecasts from the IEA and OPEC for increased demand and tighter supplies for the rest of this year and into the next....meanwhile, natural gas contracts traded mostly sideways during the week but managed to finish 1.5% higher at $2.644 per mmBTU, rallying on short term disruptions to global and domestic gas production...
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 8th indicated that after a big increase in our oil imports and a major drop in our oil exports, we had surplus oil to add to our stored commercial crude supplies for the second time in nine weeks, and for the twentieth time in the past 38 weeks, even after a big drop in oil supplies that the EIA could not account for....Our imports of crude oil rose by an average of 812,000 barrels per day to a four year high of 7,582,000 barrels per day, after rising by an average of 154,000 barrels per day the prior week, while our exports of crude oil fell by 1,842,000 barrels per day to average 3,090,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 4,492,000 barrels of oil per day during the week ending September 8th, 2,654,000 more 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 100,000 barrels per day higher at a forty-one month high of 12,900,000 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 averaged a total of 17,392,000 barrels per day during the September 8th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,800,000 barrels of crude per day during the week ending September 8th, an average of 177,000 more barrels per day than the amount of oil that our refineries were processing during the prior week, while over the same period the EIA’s surveys indicated that an average of 606,000 barrels of oil per day were being added to the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending September 8th appear to indicate that our total working supply of oil from net imports and from oilfield production was 15,000 barrels per day less than what was added to storage plus what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ +15,000 ] 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 was a discrepancy in the week’s oil supply & demand figures that we have just transcribed.... However, since last week’s “unaccounted for crude oil” figure was at [+1,198,000] barrels per day, that means there was a 1,183,000 barrel per day difference between this week's modest oil balance sheet error and the EIA's much larger crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, and therefore useless...But since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore 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 reliable 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)….(NB: there is also a more recent twitter thread from an EIA administrator addressing these errors, and what they had hoped to do about it)
This week's 606,000 barrel per day increase in our overall crude oil inventories came as an average of 565,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 41,000 barrels per day were being added to the oil in our Strategic Petroleum Reserve, the sixth consecutive increase in the SPR after three years of withdrawals. Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports jumped to an average of 6,976,000 barrels per day last week, which was 13.0% more than the 6,174,000 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 100,000 barrels per day higher at a forty-one month high of 12,900,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at a forty-one month high of 12,500,000 barrels per day, while Alaska’s oil production was 19,000 barrels per day higher at 420,000 barrels per day but still added the same 400,000 barrels per day to the rounded national total as it did last week...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 still 1.5% below that of our pre-pandemic production peak, but was 33.0% 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 93.7% of their capacity while processing those 16,800,000 barrels of crude per day during the week ending September 8th, up from their 93.1% utilization rate during the prior week, a utilization rate that is in the normal range for late summer... The 16,800,000 barrels per day of oil that were refined this week were 4.9% more than the 16,022,000 barrels of crude that were being processed daily during week ending September 9th of 2022, but 4.0% less than the 17,495,000 barrels that were being refined during the prepandemic week ending September 6th, 2019, when our refinery utilization rate was at 95.1%, also within the normal range for this time of year...
Even with an increase in the amount of oil being refined this week, the gasoline output from our refineries was seasonally lower, decreasing by 576,000 barrels per day to 9,212,000 barrels per day during the week ending September 8th, after our refineries' gasoline output had decreased by 217,000 barrels per day during the prior week. This week’s gasoline production was 2.5% less than the 9,453,000 barrels of gasoline that were being produced daily over the same week of last year, and 11.1% less than the gasoline production of 10,360,000 barrels per day during the prepandemic week ending September 6th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 6,000 barrels per day to 5,017,000 barrels per day, after our distillates output had decreased by 6,000 barrels per day during the prior week. With those minor decreases, our distillates output was fractionally less than the 5,019,000 barrels of distillates that were being produced daily during the week ending September 9th of 2022, and 6.1% less than the 5,341,000 barrels of distillates that were being produced daily during the week ending September 6th, 2019...
Even with this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the ninth time in thirty weeks, increasing by 5,561,000 barrels to 220,307,000 barrels during the week ending September 8th, after our gasoline inventories had decreased by 2,666,000 barrels to a nine month low during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users crashed by 1.014,000 barrels per day to 8,307,000 barrels per day, and because our exports of gasoline fell by 92,000 barrels per day to 911,000 barrels per day, while our imports of gasoline fell by 83,000 barrels per day to 899,000 barrels per day, ....Even after twenty-one gasoline inventory decreases over the past thirty weeks, our gasoline supplies were 3.4% more than last September 9th's gasoline inventories of 213,040,000 barrels, while about 2% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with our distillates production essentially unchanged, our supplies of distillate fuels increased for the fourteenth time in twenty-seven weeks, rising by 3,931,000 barrels to 122,533,000 barrels during the week ending September 8th, after our distillates supplies had increased by 679,000 barrels during the prior week. Our distillates supplies rose by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 288,000 barrels per day to 3,578,000 barrels per day, and because our imports of distillates rose by 55,000 barrels per day to 185,000 barrels per day, and because our exports of distillates fell by 128,000 barrels per day to 1,056,000 barrels per day....With 39 inventory increases over the past sixty-nine weeks, our distillates supplies at the end of the week were 5.6% above the 116,020,000 barrels of distillates that we had in storage on September 9th of 2022, but were still about 13% below the five year average of our distillates inventories for this time of the year...
Finally, with our oil imports much higher and our oil exports much lower, our commercial supplies of crude oil in storage rose for 8th time in twenty-three weeks and for the 26th time in the past year, increasing by 3,955,000 barrels over the week, from a nine month low of 416,637,000 barrels on September 1st to 420,592,000 barrels by September 8th, after our commercial crude supplies had decreased by 6,307,000 barrels over the prior week. With this week's increase, our commercial crude oil inventories rose to about 2% below the most recent five-year average of commercial oil supplies for this time of year, and to about 27% above the average of our available crude oil stocks as of the second weekend of September over the 5 years at the beginning of the past decade, with the difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, but then fell in the wake of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this September 8th were 2.1% less than the 429,633,000 barrels of oil we had in commercial storage on September 9th of 2022, but were 0.8% more than the 417,445,000 barrels of oil that we still had in storage on September 10th of 2021, while 15.2% less than the 496,045,000 barrels of oil we had in commercial storage on September 11th of 2020, after early pandemic precautions had left a lot of oil unused…
OPEC's Report on Global Oil for August
Tuesday of this past 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 as Chinese demand remained depressed for a second month after after a first half recovery from the country's Covid policy, while oil supplies were impacted by an additional million barrel per day unilateral production cut by the Saudis and an ongoing 500,000 million barrel per day supply cut by Russia...August was also the eighth month that OPEC and aligned oil producers were operating under a 2 million barrel per day production cut, meant to take roughly 2% of global oil supplies off the market, in response to a perceived global surplus and related lower prices, and the fourth month of a Saudi led cut of an additional 1.16 million barrels per day, which, when combined with the unilateral Russian cut, was intended to take an additional 1.66 million barrels per day off the market for the rest of this year...all told, then, the members of the cartel have committed to holding 4.66 million barrels per day off the market, or roughly 4.6% of global supplies...
The first table from this month's report that we'll review is from the page numbered 49 of the report (pdf page 59), 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 as many as eight "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), the industry newsletter Petroleum Intelligence Weekly, the energy consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures…
As we can see in the bottom right hand corner of the above table, OPEC's oil output increased by 113,000 barrels per day to 27,310,000 barrels per day during August, up from their revised June production total that averaged 27,336,000 barrels per day....however, that July OPEC output figure was originally reported as 27,310,000 barrels per day, which therefore means that OPEC's June production was revised 26,000 barrels per day higher with this report, and hence OPEC's August production was, in effect, 139,000 barrels per day more than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official July OPEC output figures as reported a month ago, before this month's revision)...
the additional million barrel per day output cut the Saudis first implemented in July was the latest in a series of oil supply cuts imposed by the OPEC+ cartel over the past year, beginning with a 2 million barrel per day production cut that the joint agreement imposed on all producers in October...following that, six OPEC oil producers, led by the Saudis, and two other oil producers aligned with OPEC+, came to an agreement at the beginning of April to further reduce their combined production by an additional 1.16 million barrels per day beginning in May, over and above the formal OPEC cuts...in addition, Russia agreed to extend their ongoing 500,000 barrels per day cut for the rest of the year for a total cut of 1.66 million barrels per day from those nine producers...production cuts for OPEC members under that agreement included 500,000 barrels per day (bpd) from the Saudis, 211,000 bpd from Iraq, 140,000 bpd from the Emirates, 128,000 bpd from Kuwait, 48,000 barrels per day from Algeria, and 8,000 barrels per day from Gabon...three months ago, our assessment was that only the Saudis managed to hit the additional production cut target in May, and only Algeria joined them in June, indeed, most of the others increased their production in June and July, rather than cutting it, and it appears that's also been the case in August....hence, the net production reduction remains less than half of what had been committed to by the parties to that April 2nd agreement..
furthermore, OPEC and other aligned oil producers had previously agreed to reduce production by 2,000,000 barrels per day beginning in November, so the net 1,207,000 barrels per day OPEC ex-Saudi Arabia has cut since then is also short of that...however, OPEC's production was already running 1,585,000 barrels per day below what they were expected to produce when that policy was initiated in October, so the 27,449,000 barrels per day OPEC produced in August still leaves them far short of what they were expected to produce during the month, as we'll see in the next table...
The above table was originally included as a downloadable attachment to the press release following the 33rd OPEC and non-OPEC Ministerial Meeting on October 5th, 2022, which set OPEC's and other aligned oil producers' production quotas for November and the following months through the end of 2023, and the quotas shown above were reaffirmed by the cartel for 2023 in during the 34th OPEC and non-OPEC Ministerial Meeting on December 4th, 2022....the first column above, labeled "August 2022 required production", actually matches the October 2018 baseline production level on which OPEC and aligned producers have based all of their quotas since the onset of the pandemic, and the "Voluntary adjustment" is the production cut each country is expected to make from that benchmark level to achieve a 2 million barrel per day cut for the cartel as a whole, leaving each country with a "Voluntary Production" level they're expected to hit each month during 2023, whether they've produced that much recently or not....since war torn Libya and US sanctioned producers Iran and Venezuela have been exempt from the production cuts imposed by the joint agreement that has governed the output of the other OPEC producers since May 2020, they are not shown on the above 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 25,416,000 barrels per day from November 2022 through December 2023...
with the April 2nd agreement, six members of OPEC agreed to further reduce their production by 1,035.000 starting in May and through the end of the year....thus the voluntary production level for the OPEC 10 would have been reduced to 24,381,000 through December....subtracting the million barrel per day cut from the Saudi's production initiated in July leaves OPEC's voluntary production level at 23,381,000 barrels in August....therefore, the 22,565,000 barrels those 10 OPEC members actually produced in August were 816,000 barrels per day short of what they were expected to produce during the month, with Nigeria and Angola still accounting for the majority of this month's production shortfall...
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 2021 thru August 2023, and it comes from page 50 (pdf page 60) of OPEC's September Oil Market Report....on this graph, the sky 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 113,000 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 was essentially unchanged at an average of 100.7 million barrels per day in August, as non-OPEC oil production fell by a rounded 100,000 barrels per day in August, with most of August’s non-OPEC production decrease due to less oil output from Russia, which more than offset greater production from China and from "other Eurasian" countries...
With little change in global oil output in August, the amount of oil being produced globally during the month fell short of the expected global demand, as this next table from the OPEC report will show us...
The above table came from page 26 of the September Oil Market Report (pdf page 36), and it shows regional and total oil demand estimates in millions of barrels per day for 2022 in the first column, and then OPEC's estimate of oil demand by region and globally, quarterly over 2023 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 2023….OPEC has estimated that during the 3rd quarter of this year, all oil consuming regions of the globe have been using an average of 102.06 million barrels of oil per day, which was revised a rounded 90,000 barrels of oil per day higher from the 101.96 million barrels per day estimated for the third quarter a month ago (we've circled this month's revisions 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 only producing 100.70 million barrels per day during August, which would imply that there was a shortage of around 1,360,000 barrels per day of global oil production in August, when compared to the demand estimated for the month...
In addition to figuring that August oil shortage implied by this report, the upward revision of 900,000 barrels per day to 3rd quarter demand that we've circled in green means that the 1,260,000 barrels per day global oil output surplus we had previously figured for July would now be revised to a 1,360,000 barrels per day (after allowing for rounding)....
Note that in green we have circled an upward revision of 80,000 barrels per day to OPEC's previous estimate for second quarter demand...so, based on that upward revision to demand, our previous estimate of a shortage of 280,000 barrels per day in June would now be revised to a shortage of 360,000 barrels per day...in addition, the 580,000 barrels per day global oil output shortage we had previously figured for May would now be revised to a shortage of 660,000 barrels per day...meanwhile, the global surplus of 40,000 barrels per day we had previously figured for April would now be reversed to a shortage of 40,000 barrels per day, in light of that 80,000 barrel per upward revision to 2nd quarter demand....
Note that in green we have also circled an upward revision of 80,000 barrels per day to OPEC's previous estimates of first quarter demand...for March, that means that the 130,000 barrels per day global oil output surplus we had previously figured for March would be revised to a surplus of just 50,000 barrels per day.. similarly, the upward revision to first quarter demand means that the global oil surplus of 430,000 barrels per day we had previously figured for February would now be revised to a surplus of 350,000 barrels per day, but that the 320,000 barrels per day global oil output shortage we had previously figured for January would be revised to a shortage of 400,000 barrels per day, in light of the 80,000 barrel per day upward revision to first quarter demand...
This Week's Rig Count
in lieu of our usual rig count coverage, we are again just including below a screenshot of the rig count summary pdf from Baker Hughes...in the table below, the first column shows the active rig count as of September 15th, the second column shows the change in the number of working rigs between last week’s count (September 8th) and this week’s (September 15th) count, the third column shows last week’s September 8th 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 16th of September, 2022...
natural gas rig increases came as three oil rigs in the Eagle Ford shale were switched to target gas, while five natural gas rigs were added to basins not tracked by Baker Hughes
Their names appeared on letters urging fracking Ohio’s state parks. They don’t know how. - cleveland.com - Salt Fork Lake, at nearly 3,000 acres, is the centerpiece of Salt Fork State Park. A state board has received multiple requests under a new legal process to frack under the park. And it received thousands of public comments in support of the idea, including from dozens who said they don't know how their names wound up on those comments. The letter from Briella Keep to her state government was simple – Ohio should for the first time allow “responsible” oil and gas exploration under state parks like Salt Fork. But there was one problem. Briella Keep was 9 years old on July 5, the day the letter was sent to the Oil and Gas Land Management Commission (OGLMC), and there’s no way she could have written it, according to her mother, Brittany Keep. . She doesn’t know anything about oil and gas exploration. She lives about 130 miles away from Salt Fork. Neither Briella nor her mother have ever visited. Brittany Keep has no clue how her phone number, her daughter’s email address, or their home address, wound up on a letter touting “opportunities for economic development and the creation of family-sustaining jobs” in Ohio. “This is not OK,” Brittany Keep said. “She definitely did not submit that draft.” The Keeps are among the dozens of Ohioans who say they believe their names were used without permission in a flood of public comments urging the newly formed commission to allow fracking for oil and natural gas in Salt Fork and other state parks and protected lands, an investigation from Cleveland.com and The Plain Dealer has found. Thousands of pro-fracking comments barraged the inbox of the commission, which will decide in the coming months whether to free mineral rights under state lands for leasing and bidding from oil and gas drillers. One set of those form letters traces back to an entity that advocates for the natural gas industry. The nonprofit Consumer Energy Alliance has previously been accused of using citizens’ names on government petitions and public comments without their permission in Wisconsin in 2014, in Ohio in 2016, and in South Carolina in 2018. The alliance denied any wrongdoing, saying that it uses a digital trail to confirm that the names submitted for the form letters through an online portal are authentic. Cleveland.com and The Plain Dealer have interviewed 35 citizens who say they didn’t write, send, or even know about letters sent in their name urging the state to allow for drilling at state parks. Several said they didn’t know what fracking means – the process of freeing methane from shale thousands of feet underground using water, sand and chemicals at high pressure, technically known as hydraulic fracturing. Others were appalled by the letters written using their names. Three other people wrote to the commission in early August, in emails obtained by public records request, to say their names were used without consent and asking staff to remove them from the record. “I am not in support of fracking and have never pledged to be,” said Justin Watkins, of Columbus, after he was told about a pro-fracking comment from the Consumer Energy Alliance sent in his name. Opponents of fracking in state parks like the Ohio Environmental Council and the grassroots Save Ohio Parks say letters matching the boilerplate letters should be stripped from the record. They say the comments distort the picture of who wants undeveloped nature sold to the fossil fuel industry, and they undermine a public comment process required by law. The commission will soon decide whether to open Salt Fork, Wolf Run State Park, Zepernick Wildlife Area, and Valley Run Wildlife Area, all in Eastern Ohio, for oil and gas exploration. Ohio Department of Natural Resources spokesman Andy Chow said the commission is aware of the “concerns” about public comments that were submitted. He said anyone who believes a comment was submitted without their knowledge or permission should alert the commission, which will remove it from the record. But he declined to comment on how anyone whose name was used without their knowledge could be expected to know as much.
Top Dem, environmentalists call for probe of comments urging fracking in Ohio state parks - – Two environmental advocacy organizations and the ranking Ohio House Democrat demanded concrete actions, investigative and otherwise, in response to dozens of Ohioans saying their names were used without their knowing permission on letters to regulators urging fracking in state parks. Cleveland.com and The Plain Dealer on Sunday reported that 38 people said their names were used without knowing consent in public comments to the Ohio Oil and Gas Land Management Commission. They included an older blind woman and the mother of a 9-year-old girl whose name appeared on the troves of pro-fracking submissions, which urge the state to “responsibly” lease rights to minerals under state parks to oil and gas drillers.In a statement, Roxanne Groff, a steering committee member of Save Ohio Parks, a grassroots organization that formed to oppose fracking in state parks enabled by a new state law, said her organization noticed “anomalies” with hundreds of pro-fracking comments and brought it to the commission’s attention two months ago. Those comments, as was reported, trace back to the Consumer Energy Alliance, a Houston-based nonprofit that advocates for the oil and gas industry.“The Commission must strike these comments from the record,” Groff said. “Anything less makes a mockery of the public engagement process.”Molly Jo Stanley, the Southeast Ohio regional director for the Ohio Environmental Council, said the organization advocated for administrative rules allowing for transparency and public comments to ensure Ohioans have a fair say on the fate of state lands.“But we did not imagine their voices could be drowned out by hundreds of allegedly fake comments coordinated by out-of-state oil and gas interests. This is unacceptable,” she said. “The OEC and Save Ohio Parks call on the Commission to halt decision-making on all leasing nominations until these comments are investigated and the public record is corrected.”House Minority Leader Allison Russo, the ranking House Democrat from Upper Arlington, said in a statement that a public comment process should reflect “actual input” from the public.“Any allegations of widespread misuse of individual’s names and opinions in these public comments should be immediately investigated by both [the Ohio Department of Natural Resources] and the Attorney General,” she said.“The notion of drilling and fracking on our pristine state parks is extreme already. Allowing the approval process to be overrun by potential fraud is unacceptable, and the commission cannot passively stand by and allow any of the nominations to be approved until further investigation.”Bethany McCorkle, a spokeswoman for Yost, said she would look into whether anyone has reached out to the attorney general on the matter.Of the 38 public comments whose authors disputed their provenance, 28 trace back to a form letter on the website of the Consumer Energy Alliance. The nonprofit receives dues from its members, which include a broad swath of oil and gas companies, and lobbies for policies that benefit the industry. Through spokesman Bryson Hull, the Alliance said it doesn’t use anyone’s name without permission. Rather, it finds people on marketing sites like “win.click2win4life.com” and from there prompts them to agree to allow their name to be used.
Disputed public comments urging fracking under Ohio parks should lead to probes, reforms - and prosecution, if merited: editorial By the Editorial Board, cleveland.com and The Plain Dealer --The First Amendment rightly covers all sorts of speech -- including, in today’s world, the deluge of carbon-copy “comments” public officials, politicians and regulatory bodies are used to getting, thanks to the many well-oiled public relations, advocacy and lobbying firms that specialize in such campaigns and solicit such responses. But the complaints from dozens of Ohioans who told cleveland.com’s Jake Zuckerman that they had no knowledge of -- nor agreement with -- the pro-fracking comments recently submitted in their names to the Ohio Oil & Gas Land Management Commission must, and are, leading to questions. Ohio Attorney General Dave Yost rightly responded quickly to Zuckerman’s story, saying Monday he’d ordered subpoenas into the matter, seeking to probe how the comments originated. Yost noted that, even if no crime can be found to have been committed, the situation reveals other weaknesses, if people’s actual beliefs are being mischaracterized, in effect violating their personal identity rights and degrading the purpose of public comments open to all. “Whether this is a criminal act or not is less the point than, this can’t be good for participatory democracy,” Yost said, as quoted by Zuckerman. “This can’t be the way things work. Because then everything would be an illusion.” The oil and gas commission is currently deliberating whether to lease land for horizontal fracturing, or fracking -- a process using a high-pressure slurry of sand, water and chemicals to drill horizontally through rocks to get at high-quality petroleum products -- beneath such iconic parks as Salt Fork State Park near Cambridge, Ohio’s largest and one of its most scenic and historic parks. Also under review for approved fracking leases are Wolf Run State Park, Zepernick Wildlife Area, and Valley Run Wildlife Area, all also in eastern Ohio, Zuckerman reports. One signatory of a July 5 letter favoring the fracking was Briella Keep, a 9-year-old girl from Kinsman, Ohio, in Trumbull County. She told Zuckerman she had no idea how her name, her mother’s phone number and their address ended up on the email letter submitted at 10:10:45 a.m. And not just Briella was upset - her mother was, too.That the letter was part of a campaign was evident by the deluge of identical letters submitted to the commission at about the same time -- more than 150 in the 15 seconds before Briella’s letter landed.Zuckerman reports that more than 1,000 of these letters trace to the Consumer Energy Alliance, a dark-money group formed in 2006 that advocates for oil and gas development. Zuckerman reported that the Houston, Texas-based nonprofit “has previously been accused of using citizens’ names on government petitions and public comments without their permission in Wisconsin in 2014, in Ohio in 2016, and in South Carolina in 2018.” Gov. Mike DeWine suggested that taking down the disputed letters was likely about all that could be done. But it’s important for public confidence in this process that the state and its oil and gas commission do more than just the minimum. That includes new authentication procedures, including the new “public comments portal where people can directly submit their comments to the website with additional authentication tools” that the commission has said it is creating. New procedures should also include notification to all commenters that comments have been received in their names.
Ohio AG investigating disputed public comments urging fracking in state parks - The Ohio Attorney General is investigating allegations of falsified public comments sent to state regulators urging fracking for natural gas in state parks. An investigation bycleveland.com and the Plain Dealer found that dozens of Ohioans believe their names were used on these letters without their permission.Earlier this year, Ohio Gov. Mike DeWine signed a new lawrequiring state agencies to move forward with requests to drill under state-owned property.The Oil and Gas Land Management Commission quickly wrote rules for this process and has received at least 13 proposals, called nominations, to drill for gas in eastern and southeastern Ohio, including the Zepernick Wildlife Area in Columbiana County, Valley Run Wildlife Area in Carroll County, Wolf Run State Park in Noble County, and Salt Fork State Park in Guernsey County.The nominations to frack Salt Fork include at least 25 well pads outside the park boundary. By law, the state keeps the names of companies confidential during the application process. Hydraulic fracturing, or fracking, is the process of drilling deep underground and injecting millions of gallons of water, sand and chemicals at high pressure to fracture shale formations and extract natural gas. Horizontal lines would extend from drilling well pads just outside state park boundaries for miles under state parks and other properties. Fracking is associated with health impacts like childhood lymphoma, asthma, andpremature death in the elderly, among other health impacts.The commission received thousands of public comments about these proposals on its website. The Allegheny Front reviewed these letters and found most pro-fracking comments were form letters.The Cleveland news outlets identified 38 people who disputed letters that were sent in their name by the Consumer Energy Alliance, a nonprofit funded in part by the oil and gas industry. One letter was purportedly submitted by a 9-year-old girl, and several by people who said they don’t even know what fracking is. “These letters should not be part of the decision-making process, and we’ve asked them [the commission] to strike these letters from the record,” said Cathy Cowan Becker of the volunteer group Save Ohio Parks. Becker wasn’t surprised by the findings. She said her group had a bank of volunteers call 435 people whose names were signed to pro-fracking public comments. While they could not reach most of those people, they did talk with some of them, “Our volunteers talked to 97 people who said they did not submit that letter,” Cowan Becker said.The commission is part of the Ohio Department of Natural Resources, which regulates oil and gas activity in the state.
While J.D. Vance salivates, Ohio's state parks fall prey to drillers - The Columbus Dispatch – by Randi Pokladnik -- A guest column by Sen. J.D. Vance was recently published in the Marietta Times in which he tried to convince the residents of Southeast Ohio that fracking the Utica shale was going to be their road to prosperity. You could almost picture senator salivating over the Utica shale under Ohio. Ohio’s state parks have fallen prey to anonymous out-of-state drillers who are currently nominating entire state parks like Salt Fork and Wolf Run for fracking. Recently, this procedure has been shown to be tainted by a questionable public comment process. Unlike the senator, those of us who were born and raised in Appalachia realize having abundant resources does not translate to a booming local economy or long-term economic gains. McDowell County in Southern West Virginia is a prime example of what happens when an area is treated like a mineral colony by politicians and industry. For decades the county led the nation in coal production; today it is one of the poorest counties in the nation. Some landowners in Southeast Ohio have made considerable money from leasing large acreages, but for most, the promised economic gains have not materialized. A 2021 report from the Ohio River Valley Institute revealed that; much of the profits made from fracking does not stay in the local economy; workers are often from out of state; and the most fracked counties actually lost populations and jobs.A drive through the county I live in, Harrison County, provides visual evidence of that false promise of growth. Unlike the Scio Pottery which at one time employed over 1300 local citizens, the million-dollar fractionator in the village of Scio employs less than 70 Ohioans.But the fossil fuel industry has made record profits. In 2022 the top five fossil fuel companies had pre-tax profits of $264.3 billion. Additionally, “fossil fuels benefited from record subsidies of $13 million a minute in 2022, according to the International Monetary Fund, despite being the primary cause of the climate crisis.” Unprecedented weather events this past summer have been exacerbated by the climate crisis. Scientific studies show that oil and gas fields are major methane emitters driving the climate crisis: the Marcellus shale is ranked the number one methane bomb in the world. The fossil fuel industry has known for years that burning coal, oil and gas will result in a warming planet, yet Senator Vance tells us we must increase our reliance on the greenhouse gas methane. Vance urges us to invest in more fracking infrastructure which means more destruction of our land, air and water. But, as the world transitions to a low-carbon economy, stranded fossil-fuel assets will result in major losses for investors. It is time for Appalachia to invest in the cheapest energy choice today: renewable energy. We can watch another “boom and bust” fossil fuel era impoverish the region or we can move into the future with a new vision of economic development that does not require destroying our beautiful state parks, endangering our health, or scorching our planet.
Gas leak shuts down Cleveland intersection (WOIO) - Construction workers cutting concrete hit a gas line in downtown Monday afternoon. This happened on E. 12th Street between Chester and Euclid Avenues. There are no injuries and the gas company is aware of the problem. Drivers are asked to avoid the intersection. Firefighters on scene said the gas has been turned off and there is no threat to public safety.
Gulfport's 4-Mile Utica Wells Producing 2.5+ Bcfe per 1,000 Ft | Marcellus Drilling News - Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), emerged from bankruptcy in May 2021 with a new board and top management. In January of this year, the company appointed a new CEO, John Reinhart, the former President and CEO of M-U driller Montage Resources Corporation before that company was gobbled up by Southwestern Energy (see Marcellus Veteran John Reinhart Joins Gulfport Energy as CEO). The company recently issued its second quarter update. The news coming from that update that caught our eye was that Gulfport is beginning to drill wells in Ohio’s Marcellus layer in addition to the Utica (see Gulfport Drilling Marcellus (Not Utica) Wells in Belmont Co., OH). However, Enverus (formerly Drillinginfo), one of the most trusted, energy-dedicated SaaS platforms, noticed another newsworthy item coming from Gulfport’s update: three of Gulfport’s Utica wells in Monroe County are 4-mile wells, and they are producing more than 2.5 billion cubic feet equivalent (Bcfe) per 1,000 feet per day–significantly higher than the company’s average of 1.5 Bcfe/d.
Range Resources, Other Shale Drillers Chasing 4-Mile Wells | Marcellus Drilling News - Last week, MDN told you about Gulfport Energy drilling three Utica Shale wells in Ohio (with a fourth underway) that are massive 4-mile wells (see Gulfport’s 4-Mile Utica Wells Producing 2.5+ Bcfe per 1,000 Ft). Gulfport is not the only company working on these super-long wells. According to the Wall Street Journal, Range Resources has its sights set on drilling 4-mile wells, too.
Oil Output Down but Strong for Columbiana County Wells – Youngstown Business Journal – Oil production in Columbiana County cooled during the second quarter compared with the previous period’s record numbers, but output remains steady, data show. Horizontal wells across the county yielded a combined 142,669 barrels of oil over a 90-day period during the three months ended June 30 – a nearly 39% drop from the previous quarter – according to the latest production data from the Ohio Department of Natural Resources. All of the oil-producing wells are owned by EAP Ohio, a subsidiary of Houston-based Encino Energy Partners. Still, the latest numbers reflect consistent output from four EAP oil-producing wells in Hanover Township. Together, these wells, located at the Mountz well pad, produced 138,164 barrels. The most productive of these wells was the Mountz 1H, which yielded 40,670 barrels of oil over 90 days. Last quarter, the four EAP wells shattered previous oil production figures for this neck of the Utica/Point Pleasant shale formation, indicating the potential of an emerging oil window in Columbiana County. During the first quarter, just those wells collectively produced 228,058 out of a total 233,390 barrels from all of the wells in the county. “Encino’s second pad is online, and we are currently working on a third pad in Columbiana County,” spokeswoman Jackie Stewart said in a statement. “We continue to be cautiously optimistic about the northern Utica play and look forward to seeing ongoing growth and investment in the region.” In all, EAP wells throughout Ohio produced more than 3.5 million barrels of oil during the second quarter, or 51% of the state’s total output. Much of this oil is found south of Columbiana County in Carroll, Harrison and Guernsey counties, data show. Overall oil production throughout Ohio increased 5.5% during the quarter to more than 6.9 million barrels compared with the previous quarter. Traditionally, the northern portion of the play is associated with natural gas, not oil. During the fourth quarter of 2022, for example, the county’s wells produced just 5,084 barrels of oil. However, the most recent data show that wells in the county are still pumping relatively strong amounts of natural gas too, although production was down from the first quarter. Horizontal wells in Columbiana County owned by EAP, Hilcorp Energy Co., Geopetro LLC and Pin Oak Energy Partners produced a total of 20.8 billion cubic feet of natural gas, down from 27.5 billion cubic feet – a 24% drop from the first quarter, data show. The highest volume gas well in the county during the period was EAP’s Maskaluk 1H well in Washington Township, which produced 1.05 billion cubic feet of gas during the period, according to ODNR. EAP reported its wells yielded 10.1 billion cubic feet of gas, while Hilcorp reported its wells produced 10.5 billion cubic feet during the quarter. Geopetro said its wells produced 236.2 million cubic feet of gas, and Pin Oak reported zero production. In all, natural gas production across Ohio fell 2.8% from 551.8 billion cubic feet during the first quarter to 536.3 billion cubic feet in the second quarter.
Utica Shale Academy reveals new welding facility in Salineville, Ohio -(WKBN) — The Utica Shale Academy is ecstatic to reveal its new state-of-the-art welding facility. Ascent Resources Welding Lab will serve the students for the upcoming school year. Welders are hard at work perfecting their craft. “We were having students struggle with the elements of welding, so we came up with the idea to have an outdoor welding facility,” said William Watson, Superintendant of Utica Shale Academy. Students will spend two hours each day at the lab and receive welding certification upon graduation. The academy says there’s a shortage of welders right now. “You use welding in almost every single industry of the trades,” said Brandon Eastek, of the academy. “My father owned a trucking company. You have to weld things, you have to fix things.” Students just learned about welding safety. The welders have a special outfit that consists of a welding hat, cap, glasses, coat and gloves. “Anytime you build things you gotta be ready for economic growth, and there’s no better way to build things then by welding them together,” Watson said. A donation from Ascent Resources helped make the lab possible.
Promise of Appalachia's shale fields remains, Shale Crescent official says - Greg Kozera of Shale Crescent USA speaks at a Sept. 11 Society of Plastics Engineers event. Fairlawn, Ohio — The gas-rich Appalachian region of Ohio, Pennsylvania and West Virginia continues to attract businesses looking for lower feedstock costs and shorter supply chains.
Pa. buffer bill stalls as fracking pad neighbors suffer - Kimberly Laskowsky flipped through pages of notes she’s kept through years of deteriorating health. She started chronicling after EQT’s Gahagan well pad was built 850 feet away in West Bethlehem Township. Laskowsky recorded 374 migraines in one month after the drilling began in 2019. “Like someone stabbing my head with a knife,” she wrote. In Pennsylvania, state law allows drilling up to 500 feet from a home. Across the commonwealth, nearly 1.5 million people live within a half mile of active oil and gas wells, compressors or processing stations. In Washington County, the most heavily fracked in the state, more than half of residents live within that radius. Drilling near homes occurs against the backdrop of mounting scientific evidence which correlates fracking and health problems. Last month, joint studies by the Pennsylvania Department of Health and the University of Pittsburgh found a 5-to-7-fold greater risk of developing lymphoma among children within one mile of a well. A separate study found that people with asthma are four to five times more likely to have an asthma attack if they live near wells even after fracking is complete, during production. Toxic hydrocarbons commonly linked to fracking like benzene are listed by the Environmental Protection Agency to cause dizziness, headaches, anemia and neurological disorders.Last year, researchers from Yale School of Public Health found that children within 2 kilometers of at least one fracking well were two to three times more likely to develop leukemia and suggested that existing setback distances “are insufficiently protective of children’s health.” In 2020, the 43rd Statewide Grand Jury found that the current state setback rule barring drilling within 500 feet of homes is “dangerously close” and inadequate for the protection of public health, recommending a 2,500 foot buffer. “An increase in the setback, to 2,500 feet, is far from extreme, but would do a lot to protect residents from risk.”The report concluded: “The closer you live to a gas well, compressor station or pipeline the more likely you are to suffer ill effects.” Josh Shapiro, then the attorney general, pledged to implement the report’s recommendations during his successful campaign for governor last year.Despite this, legislative efforts to keep drilling at bay have stalled in Harrisburg. And in the absence of a more restrictive state setback law, small municipalities like Marianna and their residents have been left to fend for themselves.
14 New Shale Well Permits Issued for PA-OH-WV Sep 4 – 10 | Marcellus Drilling News -- New shale permits issued for Sep 4 – 10 in the Marcellus/Utica continued to be in the crapper. There were 14 new permits issued last week, up 1 from 13 issued two weeks ago, and down from the 16 issued three weeks ago. Not so long ago we routinely saw 30+ issued each week. Last week’s permit tally included 8 new permits in Pennsylvania, no new permits in Ohio, and 6 new permits in West Virginia. The top permittee for the week was Antero Resources, which received six permits in WV. ANTERO RESOURCES | BUTLER COUNTY | MARSHALL COUNTY | PENNENERGY RESOURCES | PENNSYLVANIA GENERAL ENERGY |RANGE RESOURCES CORP | SOUTHWESTERN ENERGY | TIOGA COUNTY (PA) | TYLER COUNTY | WASHINGTON COUNTY | WETZEL COUNTY
Has natural gas production peaked in Appalachian Basin? - — Since 2008, 22 counties in Ohio, Pennsylvania and West Virginia have been the source of 40% of the nation’s natural gas — but now this boom in natural gas extraction might be over. Using data from the federal Energy Information Administration, the Ohio River Valley Institute concluded that the natural gas industry in the Marcellus and Utica shale region hit peak production in 2022, levels that won’t be equaled again for decades. This means the economic growth and local prosperity promised by the Shale Gas boom will likely never come. The report, an update of a similarly damning 2021 report, is being criticized by industry sources who called the data cherry-picked and off-base. They say it ignores all the good the industry has done in local communities. “What we would tell (them) to do is look at the DNR data, which is actually reported data, not a guess, not an estimate, not a projection,” Mike Chadsey, public relations director for the Ohio Oil and Gas Association, told Farm and Dairy. What the report says Gathered from the EIA’s Annual Energy Outlook 2023, the report from the environmental think tank states that natural gas production in the 22 gas-rich counties in Ohio, Pennsylvania and West Virginia reached its peak in 2022 and won’t reach the same amount until 2045. As a result, by the year 2050, the report states, “Appalachia’s share of U.S. natural gas is expected to decline… to 37.5%.” Instead, production in the Permian and Haynesville basins in the south and southwest will surpass Appalachia, becoming the next top dog in the country for producing natural gas. One of the reasons why is location, according to Sean O’Leary, the author of the report. Both basins are on the border of the Gulf of Mexico and have easy access to export terminals. The Appalachian region has to transport natural gas via pipelines to export terminals on either the East Coast or elsewhere. Another reason natural gas production is expected to drop is the Russia-Ukraine war, which spurred countries in Europe and elsewhere to move from natural gas toward renewable energy. Natural gas power plants in the U.S. are also being retired as quickly as they are being built, which will equal minimal domestic growth moving forward. Even when natural gas production was rising, the report says employment, income and population numbers in the region declined. Between the years of 2008 to 2019, gross domestic product, or GDP, in the 22 most active gas-producing counties in Ohio, Pennsylvania and West Virginia, grew three times more than the GDP of the United States and more than four times the rate of Ohio, Pennsylvania and West Virginia as a whole. However, employment, income and population did not see the same success as GDP. According to the report, federal data shows that the number of full-time jobs between 2008 to 2019 in the most fracked counties dropped 2.1% — worse than the combined states of Ohio, Pennsylvania and West Virginia, which saw a job increase of 3.8%. The population also fell by 4.6%, while the combined population in Ohio, Pennsylvania and West Virginia climbed 2.1%. The report attributed this massive growth in GDP, but lack of growth in employment, income and population to the fact that “natural gas extraction is one of the least labor-intensive activities in the U.S. economy with less than 10 cents of every dollar earned allocated to labor.” Chadsey, of OOGA, says to disregard federal data and look at the quarterly state production data operators turn in to the Ohio Department of Natural Resources Division of Oil and Gas, which he says shows “production continues to go up, quarter over quarter, year over year.” A missive from Energy In Depth, an online publication run by the Independent Petroleum Association of America, points to a 2023 Cleveland State University and JobsOhio study that shows oil and gas has invested more than $100 billion into Ohio’s economy, “acting as an essential economic lifeblood to the Buckeye State.” Mandi Risko, with Energy In Depth, said ORVI ignored critical factors supporting growth, like millions of dollars in impact fees paid by operators in Pennsylvania and ad valorem, or property taxes, paid in Ohio. She added that the report’s “cherry-picked data is hardly reflective of what the Appalachian communities have experienced” and “leaves out the what the poverty and economic rates would be without oil and gas.”
Dominion to seek air permit for proposed Chesterfield gas plant - Virginia Mercury - Dominion Energy’s plans to build a new natural gas plant in Chesterfield will require a state permit for major new sources of emissions, state air quality regulators said Wednesday. Mike Dowd, the Department of Environmental Quality’s director of air and renewable energy, told the State Air Pollution Control Board the plant will require a prevention of significant deterioration, or PSD, permit. Over the summer, Dominion revived plans for a new natural gas plant that would be sited adjacent to its fossil fuel facility in Chesterfield County, saying the facility is needed to meet a projected increase in electricity demand from data centers and electric vehicles. Because the new units are intended to generate power when the grid is experiencing peak demand, they are called peakers. “We need a balanced energy mix with renewables and always ready natural gas working hand in hand.”The plans call for four simple cycle combustion turbines capable of generating 250 megawatts of electricity each. Natural gas would be the primary fuel source, with oil and possibly hydrogen as backups. There would also be six generators and eight oil storage tanks that would be able to provide fuel for about seven days. Dowd said the storage is needed in case a cold snap like the one experienced throughout Virginia around Christmas 2022 limits the availability of natural gas for power plants. “That’s why they say they need the oil, because gas can get curtailed,” Dowd said.The units would be equipped with several emission controls, including nitrogen oxide burners. With the controls, the peaker plant would produce 81.6 tons of particulate matter, 344.9 tons of nitrogen oxide and 2.2 million tons of carbon dioxide equivalents per year, among other emissions. Even with the new emissions from the peaker plant, DEQ said Dominion’s closure of its coal-fired units at its existing plant on May 31 will result in a net reduction in particulate matter and nitrogen oxides from both locations, although it will still lead to an increase in carbon dioxide equivalents.
Williams CEO says not interested in utility companies bought by Enbridge (Reuters) - U.S. energy firm Williams Companies (WMB.N) is not interested in three utilities recently bought by Canada's pipeline operator Enbridge (ENB.TO) as the return rate would be too low, Chief Executive Alan Armstrong said on Wednesday. Enbridge said this week it will buy East Ohio Gas, Questar Gas, and Public Service Co of North Carolina from Dominion Energy (D.N) for $14 billion including debt, creating North America's largest natural gas provider and doubling its gas distribution business. "When we look at our use of equity in a transaction like that ... that kind of lower return does not make much sense for us," Armstrong said at the Barclays CEO Energy-Power Conference in New York. The natural gas pipeline company already has high-yielding investment opportunities, Armstrong said. Many companies are taking advantage of grant funding from the Department of Energy for electrification projects at facilities, including ports and airports. That, along with the electrification of vehicles, are expected to drive power demand, the CEO said. "Natural gas, and in particular pipeline and storage capacity, will be the beneficiary of that continued electrification," Armstrong said. The shift away from coal to gas for power generation in the states where Williams operates will result in the need for an additional 4.6 billion cubic feet per day (bcf/d) of gas, he added. Considering the volume of gas it transports and the pipeline capacity it has, and not the price of natural gas, Williams expects strong revenue growth from its existing and future projects with robust dividend yields, Armstrong said. Front-month gas futures for October delivery fell 7.8 cents, or 3%, on Wednesday morning, to $2.504 per million British thermal units (mmBtu), putting the contract on track for its lowest close since Aug. 23. Williams is working on increasing its pipeline network to transport even more gas to U.S. customers, including producers of liquefied natural gas, Armstrong said.
US natgas prices jump 5% to one-week high on drop in daily output (Reuters) - U.S. natural gas futures jumped about 5% to a one-week high on Tuesday on a big drop in daily output and forecasts for warmer weather and higher demand over the next two weeks than previously expected. Traders noted that prices jumped despite ongoing feedgas reductions to Freeport LNG's liquefied natural gas (LNG) export plant in Texas over the past several days. Front-month gas futures for October delivery on the New York Mercantile Exchange rose 13.5 cents, or 5.2%, to settle at $2.743 per million British thermal units, their highest close since Sept. 1 for a third day in a row. That was the front-month's biggest daily percentage gain since late August and put the contract up for a fourth day in a row for the first time since early August. "The catalyst for the (price) move remains to be seen," said analysts at Gelber & Associates, an energy consultancy, noting it may have been caused by "speculative flows" or rumors of possible errors in the amount of gas in storage in the U.S. South Central region, which includes Texas. During a brutal heat wave lasting much of the summer, utilities last week pulled gas from storage in the South Central region for a seventh week in a row, the longest streak during the summer since 2017, according to data from the U.S. Energy Information Administration (EIA). Utilities usually inject gas into storage during the summer and pull it out during the winter to meet peak heating demand. "The difference between reported and actual storage (in the South Central region) may be enough to justify buying gas at current levels to immediately inject it and thereby restore storage numbers to more reasonable levels," Gelber noted. LSEG said average gas output in the lower 48 U.S. states has held at 102.3 billion cubic feet per day (bcfd) so far in September, the same as the record high hit in August. On a daily basis, however, output was on track to drop about 2.9 bcfd to a preliminary 12-week low of 99.8 bcfd on Tuesday. That would be the biggest one-day decline since December, but energy traders noted preliminary data is often revised later in the day. In its Short-Term Energy Outlook (STEO), EIA projected U.S. gas production and demand would rise to record highs in 2023, while U.S. power consumption will ease from last year's record high. Meteorologists forecast the weather would remain mostly near normal during the Sept. 12-18 period before turning hotter than usual from Sept. 19 through at least Sept. 27. But with seasonally cooler weather coming, LSEG forecast U.S. gas demand, including exports, will slide from 99.7 bcfd this week to 96.2 bcfd next week. Those forecasts were higher than LSEG's outlook on Monday. Gas flows to the seven big U.S. LNG export plants have eased to an average of 12.2 bcfd so far in September, down from 12.3 bcfd in August. That compares with a monthly record of 14.0 bcfd in April. On a daily basis, however, LNG feedgas fell to a preliminary eight-month low of 9.1 bcfd due mostly to a reduction over the weekend at Freeport from around 1.8 bcfd last week to an average of 0.5 bcfd over the past four days, according to LSEG data.
Vern Buchanan says oil spill at SeaPort Manatee likely intentional dumping - U.S. Rep. Vern Buchanan said more than 19,000 gallons of oil were likely dumped into waters near SeaPort Manatee.After touring the waters with the Coast Guard, the Longboat Key Republican said there’s no sign of a continued problem such as an oil leak. But that has left officials suspicious someone dumped oil into the water last week as Hurricane Idalia impacted the region.“Our local waterways, environment and marine life are incredibly important to area residents and Florida’s tourism-based economy,” Buchanan said.“With no evidence pointing to any infrastructure failures or pipeline leaks so far, it looks increasingly likely that someone may have dumped this oil and is failing to come forward. Whether an accident or purposeful, any potential bad actors must be held accountable for putting our waterways at risk. Just as water quality is critical to our way of life, Port Manatee is essential to our area’s economy, and I’m committed to ensuring both are safeguarded from future spills.”Buchanan toured the impacted area with Coast Guard Captain Michael Kahle and SeaPort Manatee Executive Director Carlos Buqueras. Ahead of the tour, the Congressman provided an update that most of the oil found in the waters had been removed.The Coast Guard has removed some 19,000 gallons of contaminated water from the port, of which there was approximately 3,500 gallons of heavy, unrefined oil.Buqueras said it only adds to the mystery that the crude ended up in the local waters. The port in the last fiscal year moved 404.6 million gallons of petroleum products, but not unrefined oil.“It’s still too early to define where exactly that heavy fuel came from, because we don’t handle a lot of heavy fuel,” Buqueras said.The Environmental Protection Agency’s National Response Center first received reports on Aug. 31 about an oil spill at the port. Cleanup began the following day. About 97% of known contaminants have been removed at this point, according to the Coast Guard.
Port Manatee starts to recover from a mysterious oil spill | WLRN - SeaPort Manatee is slowly reopening for business following the unexplained oil leak that left over 20,500 gallons of polluted water in its basin two weeks ago. In a coordinated effort, the U.S. Coast Guard, along with the port crew and other pollution responders, were able to successfully remove 99% of the surface oil and water mixture from the area. They also cleaned the oil-contaminated debris that was in the ship hulls and sea walls. The U.S. Coast Guard reported from their X account (formerly known as Twitter) that around 4,000 feet of floating barriers, or boom, were removed from the water. This was the main tool used to soak up the material as well as vacuuming and absorbing. Carlos Busqueras, SeaPort Manatee executive director, expressed his gratitude for the U.S. Coast Guard's swift response and their commitment to resolving the situation as quickly as possible. He pledged transparency with the public and promised to share details as they come up. After analyzing samples from the oil, officials believe some of the leaked material is heavy fuel oil, which is a byproduct of the crude oil refinement process. As of now, no concrete evidence of infrastructure failures — regarding the source of the spill — or pipeline leaks have been reported. Under Capt. Michael Kahle, the U.S. Coast Guard is investigating this case and looking for those responsible. Sarasota Congressman Vern Buchanan toured the facility Friday morning. He emphasized the importance of finding those accountable and stressed that they’ll need to bear the costs for the cleanup operations, especially if this incident was a ‘hit and run’. “Our local waterways, environment, and marine life are incredibly important to area residents and Florida’s tourism-based economy,” Buchanan said in a news release. “It looks increasingly likely that someone may have dumped this oil and is failing to come forward. Whether an accident or purposeful, any potential bad actors must be held accountable for putting our waterways at risk.” Fortunately, officials from the National Oceanic and Atmospheric Administration reported that no immediate harm had been done to fish or wildlife after conducting an endangered species analysis. Environment advocates disagree with this claim and believe that there are, without a doubt, environmental impacts and potential health risks involved in this leak.
VIDEO: Coast Guard Rescues Oil Tanker Crew Member Offshore Texas - The U.S. Coast Guard (USCG) announced Wednesday that it rescued a tanker crew member from the water 10 miles offshore Galveston, Texas. “Coast Guard Sector Houston-Galveston command center watchstanders received a distress call on VHF-FM channel 16 at 9.23 am from personnel aboard the tanker vessel Ghibli, stating that a crew member had fallen overboard and was not wearing a life jacket,” the USCG said in a statement posted on its website. “Watchstanders issued an urgent marine information broadcast, diverted an already airborne MH-65 Dolphin helicopter crew from Coast Guard Air Station Houston and directed the launch of a 45-foot Response Boat–Medium crew from Coast Guard Station Galveston,” the USCG added. The helicopter crew located the man, deployed a rescue swimmer to pull him from the water, and transported him to University of Texas Medical Branch Galveston to receive further care, the USCG noted in the statement, adding that the man was “reportedly in stable condition”. “Wearing a life jacket is absolutely crucial,” Travis Addison, Operations Unit Controller at Sector Houston-Galveston, said in the USCG statement. “It was fortunate that our helicopter crew was flying nearby. If not, this case might have ended differently,” he added. A video posted on USCG Heartland’s Twitter page shows the USCG rescue operation taking place. The Ghibli vessel is a crude oil tanker built in 2009 sailing under the flag of Liberia, according to marinetraffic.com, which shows that the vessel is located in the U.S. Gulf of Mexico at the time of writing. On August 10, the USCG revealed that it medevaced two boaters from a construction vessel approximately 20 miles south of Atchafalaya Bay, Louisiana. “Coast Guard Sector New Orleans watchstanders received a medevac request at approximately 11 am from the emergency medical technician aboard the vessel for a passenger experiencing heart related issues,” the USCG said in a statement posted on its site last month. “Sector New Orleans watchstanders then coordinated the launch of a Coast Guard Air Station New Orleans MH-60 Jayhawk helicopter aircrew to assist,” the statement added. “The aircrew arrived on scene, hoisted the two boaters aboard the helicopter and transferred them to awaiting emergency medical services personnel at the University Medical Center in New Orleans. The man was last reported to be in stable condition,” the USCG statement continued. A video of this rescue was also posted on the USCG’s Twitter page.
USA Oil Drillers Push the Limits Sideways -Since the advent of the shale boom, US oil producers have drilled both downward and sideways deep under the earth’s surface. But now that the easiest-to-reach crude has been extracted, those companies are testing the limits of their technology even further by boring more than 3 miles horizontally, elevating both the operational risk and the potential rewards. One in five new wells in the Permian Basin of West Texas and New Mexico will rely on subterranean horizontal holes of 3 miles or longer in 2024, double the share this year and up from virtually zero just two years ago, according to research firm Rystad Energy. US producers including Pioneer Natural Resources Co. and Diamondback Energy Inc. say the new technique will be key to future oil output for a US shale-oil industry that’s starting to show its age. The technical advances build on the basic vertical wells that preceded the shale boom and the standard 2-mile sideways wells deployed in most of today’s fields. But adding an extra horizontal mile — or more — ultimately means more complicated and costly projects. For the most part, only bigger players will be comfortable with such extreme drilling, giving the better-funded producers a new leg up and potentially speeding the arrival of peak US oil. “It is a riskier game,” said Mike Holcomb, chief operating officer for Patterson-UTI Energy Inc., one of the biggest US contractors hired to drill longer wells. “If something happens and you lose a lateral, you’ve lost 3 miles of production versus 2.” Following the widespread adoption of techniques like fracking and sideways drilling in the early 2000s, US shale became the world’s leading source of oil growth. Now that the best acreage has been tapped, the shale patch is struggling to keep up. Some explorers trying to more efficiently wring out hard-to-reach hydrocarbons are going so far as to drill wells in zig-zag and U-turn patterns under miles of rock in hopes of getting more bang for their buck. New techniques can sometimes lead to equipment failure: Flexible tubing can at times buckle in the drilling process, and drill bits can wear down deep under the earth’s surface. In addition, if the pockets of oil aren’t exactly where they’d been modeled, a 3-mile well is a costlier outlay for what could ultimately be a dud. Advocates say the longer wells promise lower fixed costs, better productivity and the ability to access oil that might otherwise have been out of reach. “It’s a risk-reward decision, because if something bad happens at 18,000 feet, that’s an expensive mistake,” Kaes Van’t Hof, president of Diamondback, said on a call with analysts. The company has even gone sideways deep under the home of company chief Travis Stice. So far, he said, the results of the longer laterals have been positive. “The drilling guys can do it, there’s no doubt about that.” Pioneer, the largest independent producer in the Permian, has an inventory of more than 1,000 future wells that run at least 15,000 feet horizontally — or about 2.8 miles — and some even exceed 18,000 feet. That’s about 3.4 miles, or the length of 50 football fields. The longer horizontal wells generate more oil, cost less per lateral foot and require fewer vertical holes and fracking workers, Pioneer’s president and incoming chief executive officer, Rich Dealy, said on an August conference call. Servicers, the hired hands of the oil patch, are for the most part eager to take on these kinds of risky, big-ticket jobs. An average 2-mile lateral well costs $6.5 million, all in, compared to around $9 million for a 3-mile lateral well, according to data from Bernstein. Pioneer and Diamondback didn’t say whether they’ve had any problems when they extend the laterals or how much they’ve spent, though Dealy said on the call that the roughly 3-mile laterals result in capital savings of about 15% per foot. Longer horizontals are particularly popular in the Marcellus Shale of the US Northeast as well as the Midland Basin of the Permian in Texas. “It takes more horsepower on the surface to pump,” Thomas Johnston, chief operating officer of ShearFRAC, a drilling technology company. “And it costs more money to put the casing in for the well. So there’s all these extra costs up front.” American drillers have been scouting for years for new ways to extract oil from a stagnating market, including producing in more populated urban areas. Still, the steep drop in output from US shale wells is turning out to be worse than expected, forcing oil drillers to work even harder to keep production from slipping, research firm Enverus said in its latest report. “With the cost inflation, wells are getting more expensive,” said Rystad analyst Alexandre Ramos-Peon. “The only way you can still be making a handsome profit on this is by leveraging all the known techniques to get the most bang out of your buck.” Not everyone is convinced. Last year, Bob Brackett, an analyst at Bernstein, published an investor note titled “Why I don’t like 3-mile laterals.” He argued that the 5% per well cost savings are minor compared to the risk that productivity could worsen as the well goes longer. The third mile in a well suffers a 13% falloff in production per foot, Brackett wrote in September 2022 — and said he has yet to see anything to alter his thesis. “A company could show with actual data that the well cost savings are higher than the productivity” that’s lost, Brackett told Bloomberg News in August. “But no one has yet.” For now, drillers continue to push outward, with some of Pioneer’s wells now nearing four miles. Time will tell how much further drillers can go. “We would always say we’re going to stop when the well tells us to do so,” said Holcomb, the Patterson-UTI executive with more than 40 years of experience in the oil fields. “And then over the years, we’ve learned as we’ve gone, and we’ve continued to push the limits out.”
Amazon will pay an oil company to help it meet climate goals - Amazon is the latest tech giant to buy into the idea of filtering carbon dioxide out of the air as a way to combat climate change. The company is backing an oil giant, Occidental Petroleum,to help it do just that.Amazon announced today that it plans to purchase 250,000 metric tons of carbon removal from Occidental subsidiary 1PointFive. This is the latest in a stream of announcements from Big Tech companies turning to emerging carbon removal technologies to help them meet their climate goals. Sucking CO2 out of the atmosphere is one way to try to undo the damage caused by pollution companies have already created.But much of the carbon removal industry has deep ties to oil and gas.And when companies like Amazon pay to deal with their pollution this way, it doesn’t necessarily stop them from continuing to create more of the pollution by burning fossil fuels. This is the latest in a stream of announcements from Big Tech 1PointFive,the subsidiary of Occidental, has plans to build massive industrial facilities, called direct air capture (DAC) plants, in Texas that are supposed to pull carbon dioxide out of the atmosphere.Amazon says that the CO2 will then be sequestered underground to keep it from escaping back into the atmosphere. Occidental, however, has also used carbon removal to sell what it calls “net-zero oil,” produced by shooting CO2 into the ground in order to push out hard-to-reach oil reserves. The Biden administration has arguably been just as jazzed about carbon removal as tech companies have. The Department of Energy (DOE) chose to fund a project1PointFive is developing at King Ranch in Texas as the site of one of the first “hubs” for direct air capture plants in the US. The Bipartisan Infrastructure Law passed in 2021 earmarks $3.5 billion in federal funding for at least four DAC hubs across the US. Last week, Microsoft announced that it would purchase 315,000 metric tons of carbon dioxide removal from another hub the DOE is funding in Louisiana. That project is led by California startup Heirloom and Swiss company Climeworks.Climeworks was one of the first companies in the world to build CO2- sucking industrial plants and has already captured an unspecified amount of CO2 for Microsoft, Stripe, and Shopify at its facility in Iceland. On top of its carbon removal purchase from Occidental’s 1PointFive,Amazon also said today that it is “making an investment” in another California-based DAC company called CarbonCapture that will provide Amazon with credits worth 100,000 tons of carbon removal.CarbonCapture is building another big direct air capture plant in Wyoming.
Nearly 400 Scientists Tell Biden to 'Embrace Demands of the March to End Fossil Fuels' -- In an open letter published Wednesday, around 400 scientists implored U.S. President Joe Biden to endorse the demands of this weekend's March to End Fossil Fuels in New York—which include halting new fossil fuel projects, ending oil and gas drilling on public lands, and declaring a climate emergency.Noting that "on your first day in office, you issued an executive order pledging that it is 'the policy of my administration to listen to the science' in tackling the climate crisis," the letter's signers lamented that "more than two years later, it's clear that the crisis is spiraling out of control and the policies of your administration with regard to fossil fuels fail to align with what the science tells us must happen to avert calamity.""With the climate crisis raging all around us—in the form of fires, floods,hurricanes, drought, heatwaves, crop failures, and more—we call on you directly, clearly, and unequivocally to stop enacting policies contrary to science and do what is needed to address the crisis," the signatories added.The scientists called on Biden to:
- Stop federal approval for new fossil fuel projects and repeal permits for climate bombs like the Willow project and the Mountain Valley Pipeline;
- Phase out fossil drilling on our public lands and waters;
- Declare a climate emergency to halt fossil fuel exports and investments abroad, and turbocharge the buildout of more just, resilient distributed energy (like rooftop and community solar); and
- Provide a just transition to a renewable energy future that generates millions of jobs while supporting workers' and community rights, job security, and employment equity.
"We scientists heard the president loud and clear when he pledged two years ago to 'listen to the science' on climate. Yet now we're watching our nation's greenhouse gas emissions spiral out of control while White House policy becomes increasingly unaligned with reality," Sandra Steingraber—an initial signatory of the letter and a senior scientist at the Science and Environmental Health Network"—said in a statement."Science says we need to ratchet down fossil fuel extraction—the White House is doubling down," she added. " Scientists are here to say that our data support the demands of this march."
Mary Peltola's delicate balance on energy, climate - Mary Peltola, one of the few pro-oil Democrats in Congress, spent months prodding President Joe Biden to approve the enormous Willow project on the North Slope of Alaska. She was the only Democrat this year to join the pro-fossil fuel Congressional Western Caucus. And when Biden reversed oil and gas leases in her state last week, she said she was “deeply frustrated.”The Alaskan has certainly frustrated some members of her own party and environmentalists — in her 2022 campaign, the national chapter of the League of Conservation Voters declined to endorse her.And yet her voting record from LCV reveals she has mostly joined with Democrats on environmental bills with the exception of a handful of times. Republicans plan to use such votes against her in a seat they are targeting to retake in 2024.Up for a second full term, Peltola finds herself in a tough spot. She represents a state that has long depended on the oil and gas industry for jobs and direct checks to residents. At the same time, the brutal effects of climate change are on full display: The Arctic is melting; permafrost is thawing; coastal villages are moving inland.In her view, people in cities in the “lower 48” have the luxury of not thinking about where their energy comes from — even as they have an insatiable appetite for power.“It was frustrating to hear [the Willow] project referred to as a carbon bomb,” she said in a recent interview, referring to comments made by some green groups.“When, actually, the carbon bomb has been on the demand side,” said Peltola. “The folks who were saying that about this project came from districts where every single day the mere existence of their district is a carbon bomb.” She complained that Americans are oblivious to the amount of carbon they consume powering their iPhone or microwaving their coffee. “I just would love to see Americans have an honest conversation about how to reduce our carbon emissions — all of us — including people who come from big districts.”Along with the state’s two Republican senators, Lisa Murkowski and Dan Sullivan, Peltola spent months pushing senior administration officials and President Joe Biden to greenlight Willow, a contentious operation that at its peak will produce 180,000 barrels of oil a day over 68,000 acres in the National Petroleum Reserve-Alaska.Observers thought her Democratic credentials might have given the Biden administration cover to approve a fossil fuel project that generated enormous backlash among many in the party — not to mention young climate advocates.
Pared back federal oil and gas lease sale nets $13M - Oil and natural gas developers offered up $13.2 million to lease the drilling and production rights to 53 federal parcels in Wyoming this month. One lease parcel in Converse County attracted seven different bidders during the auction before going to California-based Phoenix Capital Group Holdings, LLC, for $2.6 million compared to an average $250,000 per parcel, according toWyoming Bureau of Land Management data.The BLM originally considered 115 lease parcels for the third-quarter sale but pared down its offering to 81, withdrawing some areas to protect greater sage grouse habitat as well as crucial winter range for big game. Similarly, the agency originally considered 209 lease parcels for its second quarter lease sale in June but pared that sale down to 116 due to similar concerns and approved a total of only 67, earning $14.8 million.“Those lost acres represent lost opportunities,” the Petroleum Association of Wyoming told the BLM in its written commentsto the agency regarding the third-quarter sale. “It increases the potential for less effective development programs and will surely result in lost opportunities to generate economic activity and a fair return to the American public.”Federal officials failed to point to specific scientific analysis — particularly regarding greater sage grouse habitat — in withdrawing some acres nominated for lease sales, according to the association’s president Pete Obermueller. “Their decisions to defer are not based on any data showing sage grouse habitat or populations are under pressure specifically from oil and gas development in those areas,” Obermueller told WyoFile. “The BLM’s process for determining which parcels are offered has long been a source of frustration even before the Biden Administration,” he added. “Using unexplained and completely opaque decision-making, the BLM can and does offer parcels that no company nominated and often offers only fractions of parcels nominated by an interested company.”Crucial habitat for big game appears to be another driver for limiting lease sales, especially in light of a deadly winter for pronghorn and mule deer. The Theodore Roosevelt Conservation Partnership, in its written comments, praised the BLM for reducing the number of parcels overlapping with crucial big game winter range from 19 (covering 9,511 acres) to seven (covering 3,270 acres) in the recent sale.The BLM appears to have also removed a handful of parcels nominated for a fourth-quarter lease sale, both in priority sage grouse and big game winter habitats, according to an assessment by the Wyoming Outdoor Council.Though the BLM is mandated to conduct quarterly sales each year, the Sept. 6 offering was only the second of three sales scheduled for the year. The first quarterly sale for 2023, as well as several in 2022 and 2021 were suspended due to a Biden administration moratorium, which was eventually overturned by the courts.
Biden administration gives states more authority to block pipeline projects -The Biden administration is giving states and tribes more authority to block certain projects, like pipelines that run through their waters, on water quality grounds.A new final rule from the Environmental Protection Agency (EPA) undoes the Trump administration’s efforts to limit states’ authority to block such projects.Specifically, the new Biden rule allows a state or tribe to consider any aspect of the project with the potential to impact water quality as it weighs whether to approve or block a project. “Our focus was on restoring [state] authority and providing an efficient path to critical infrastructure projects in this country,” Radhika Fox, the EPA’s top water official, told reporters on Thursday.Several Democratic governors praised the rule in a statement issued by the Biden administration.“EPA’s action will better protect New Mexico’s water quality at a time when federal and state protections are needed most,” said New Mexico Gov. Michelle Lujan Grisham (D).The Clean Water Act gives states the authority to approve or reject projects that run through their waters. The Trump administration sought to limit that authority, a decision that came after Democrat-led states used the law to block two major projects: a coal shipping port in Washington state and a pipeline that would have run between Pennsylvania and New York. In addition to the change regarding pollution, the Biden administration also said its rule encourages “early engagement” between industry and the states or tribes. It would do so by enabling states and tribes to meet with companies who are trying to get a project approved before the clock starts on the one-year deadline to make a decision.
Biden administration restores the power of states and tribes to review projects to protect waterways (AP) — States and Native American tribes will have greater authority to block energy projects such as natural gas pipelines that could pollute rivers and streams under a final rule issued Thursday by the Biden administration.The rule, which takes effect in November, reverses a Trump-era action that limited the ability of states and tribes to review pipelines, dams and other federally regulated projects within their borders. The Environmental Protection Agency says the new regulation will empower local authorities to protect rivers and streams while supporting infrastructure projects that create jobs.“We actually think this is going to be great for the country,'' said Radhika Fox, assistant administrator for water. “It’s going to allow us to balance the Biden administration goals of protecting our water resources and also supporting all kinds of infrastructure projects that this nation so desperately needs.''But Fox acknowledged at a briefing that the water rule will be significantly slimmed down from an earlier proposal because of a Supreme Court ruling that weakened regulations protecting millions of acres of wetlands. That ruling, in a case known as Sackett v. EPA,sharply limited the federal government’s jurisdiction over wetlands, requiring that wetlands be more clearly connected to other waters such as oceans and rivers. Environmental advocates said the May decision would strip protections from tens of millions of acres of wetlands. Fox declined to offer a specific number of waterways that would no longer be protected. But she said the Sackett case "does limit pretty significantly the number of the waters that we expect to be (under federal jurisdiction) when those determinations are made'' by the Army Corps of Engineers.The administration will work closely with states, tribes and territories on implementing the rule, "but again, what is jurisdictional and not jurisdictional is determined by these very case-specific reviews'' by the Corps, she said.In a separate action last month, the Biden administration weakened regulations protecting millions of acres of wetlands, saying it had no choice after the high court ruling. The rule defining “Waters of the United States” marks a policy shift that departs from a half-century of federal rules governing the nation’s waterways.The federal Clean Water Act allows states and tribes to review what effect pipelines, dams and some other federally regulated projects might have on water quality within their borders. The Trump administration sought to streamline fossil fuel development and made it harder for local officials to block projects.The rule announced Thursday will shift power back to states, tribes and territories.EPA Administrator Michael Regan said in a statement that the new rule affirms the authority of states, territories and tribes "to protect precious water resources while advancing federally permitted projects in a transparent, timely and predictable way.”The rule allows states and tribes to work with federal agencies to determine the time frame for review — up to a maximum of one year — but provides a six-month default deadline if local authorities and the federal agency do not agree on a timeline.
Feds delay decision in Dakota Access enviro review - The Dakota Access oil pipeline’s future remains uncertain after the Army Corps of Engineers on Friday released a long-awaited draft environmental study that will help determine whether it receives an easement needed to keep operating. Federal officials did not recommend whether the Biden administration should grant an easement for a 1.02-mile portion of the pipeline that runs under Lake Oahe, a reservoir on the Missouri River about a half-mile north of the Standing Rock Sioux Tribe’s reservation in North Dakota. The final study, which will include a public comment period, will likely make that determination. At a Senate hearing in April, Assistant Secretary of the Army for Civil Works Michael Connor said the public will likely have 60 days to comment before a final version is released. A spokesperson for Energy Transfer LP, the pipeline’s operator, said the company was reviewing the draft study and declined to respond. The Natural Resources Defense Council, an environmental group, called for the Army Corp to recommend shutting down the pipeline in its final study. “We stand in solidarity with the Standing Rock Sioux Tribe in opposing this dirty and dangerous pipeline that harms the climate and threatens the primary water source for the Tribe,” Amy Mall, a senior advocate with the group, said in a statement. “The Army Corps must consider all of the risks of this pipeline, make all significant environmental information available without redactions, and honor the Tribe’s treaty rights.” The pipeline inspired intense protests of thousands of people in 2016 and 2017, as well as lawsuits. It has remained in operation since it opened in 2017, despite legal challenges. In 2020, Judge James Boasberg of the U.S. District Court for the District of Columbia ruled that the Dakota Access pipeline should be closed and drained of oil until a better review could be completed under the National Environmental Policy Act. Boasberg, an Obama appointee, said the Army Corps needed to take a closer look at spill risks for the portion of the 1,172-mile pipeline that lies beneath Lake Oahe. A year later, the U.S. Court of Appeals said a shutdown was not necessary but agreed that NEPA required a better analysis of potential spill risks. The Supreme Court decided against hearing the dispute in February 2022. The draft environmental impact study released Friday included five alternative actions the Army Corps could order but stopped short of recommending any of them.
Senate votes to raise oil well bond requirements - The state Senate passed an environmental and taxpayer-protection bill Wednesday that would make oil and gas companies planning to buy a relatively low-producing well first demonstrate they have enough money to plug and restore it whenever the operation becomes uneconomical in the future. Assembly Bill 1167, now awaiting a concurrence vote before likely heading for a signature by Gov. Gavin Newsom, is aimed at shielding the public from the cost of addressing so-called orphan wells, for which no responsible party can be found to pay for making sure the facilities don't end up polluting air and groundwater.
Legal assault awaits Biden's Alaska lease cancellation - An Alaska corporation is already teeing up a legal battle over the Biden administration’s decision to cancel contested oil and gas leases in a massive wildlife refuge. The Interior Department announced plans last week to revoke seven leases held by the Alaska Industrial Development and Export Authority (AIDEA) that were sold in the final days of the Trump administration. The state corporation has vowed to pursue legal action against the federal government for the cancellation of the leases spanning 365,000 acres in the coastal plain of the Arctic National Wildlife Refuge, also known as ANWR. “A willingness to circumvent laws passed by Congress has consequences reaching far beyond ANWR’s boundaries, and will impact future development across this country,” the authority said in a statement last week. “AIDEA will aggressively defend our lease rights and oppose this unlawful action.” The Biden administration’s move is likely on solid legal ground, said some court watchers. Legal observers said the decision to cancel the leases — based on what the administration called an inadequate National Environmental Policy Act review process — appears to fall within the Interior Department’s well-established power. But the strength of the department’s legal argument for cancellation could depend on which laws a federal court might rely on to decide if the Biden administration could withdraw the leases — legislation that is specific to leasing in part of Alaska, or a broader lease cancellation standard. “Generally, there is the authority to cancel leases if the leases were issued unlawfully, for whatever reason,” said Mark Squillace, director of the Natural Resources Law Center at the University of Colorado, Boulder. The Mineral Leasing Act gives Interior discretion to cancel a lease for a mistake or inadequate NEPA review, said Rebecca Watson, a former department official under the George W. Bush administration. She noted that the government doesn’t often cancel leases because it is required to pay back the lease bonus paid at the time of the sale, and the lease holder can also negotiate for costs. “Unless the ‘flawed NEPA’ decision is arbitrary and unsupported by law and facts, the feds are likely to prevail,” said Watson, who is now special counsel at the firm Welborn Sullivan Meck & Tooley PC. The Biden administration’s claims may also be complicated by Congress’ directives to develop an oil and gas program in the Arctic refuge. Former Trump Interior Secretary David Bernhardt, who oversaw the January 2021 lease sale, said that Interior had “multiple legal obligations” under the 2017 Tax Cuts and Jobs Act, which required the department to offer two lease sales in the refuge. The Biden administration is planning to revoke leases from the first of these sales. Interior must offer a second sale by the end of 2024. The 2017 law directs Interior to follow a similar cancellation criteria to the standard set for leases in Alaska’s National Petroleum Reserve, or NPR-A. There are other provisions of the Tax Act that may or may not be relevant, like acreage limitations, said Bernhardt. The first question a court must resolve is whether the process for canceling leases in the reserve applies, or if the decision is subject to Bureau of Land Management regulatory requirements or some other standard, said Bernhardt. Then a court must determine whether the Biden administration offered adequate rationale for the cancellation.
Why Trump’s tax law could limit Biden’s efforts to protect Arctic wildlife from drilling The Biden administration’s efforts to protect wildlife in the Arctic from oil and gas drilling is on a collision course with a Trump-era law requiring oil and gas leasing there.When President Biden was on the campaign trail he called for “permanently protecting” the Arctic National Wildlife Refuge from drilling. And this past week, his administration canceled oil and gas rights issued there under the Trump administration. The president, in a written statement, said the action “will help preserve our Arctic lands and wildlife, while honoring the culture, history, and enduring wisdom of Alaska Natives.”But a 2017 tax law also required at least one drilling rights sale to be held by the end of 2021, and another to be held by the end of next year — meaning the Biden administration is expected to have to auction off some land in the refuge for oil and gas development.The latest action is also expected to face a court challenge, with Alaska’s governor indicating he will sue the Biden administration. “We will fight for Alaska’s right to develop its own resources and will be turning to the courts to correct the Biden Administration’s wrong,” Republican Gov. Mike Dunleavy said in a written statement this week. The Arctic National Wildlife Refuge, sometimes abbreviated as ANWR, is an area of northeastern Alaska along the border with Canada’s Yukon that is about the same size as North Carolina. It is on the traditional homeland of the Iñupiat and Gwichʼin peoples and also contains a great deal of wildlife, including black, brown and polar bears; caribou, wolves and wolverines; and more than 200 species of birds. Whether to allow oil and gas production in the refuge has been a political issue for decades.
Athabasca Closes Sale of Non-Core Oil Assets in Montney, Duvernay Plays - Athabasca Oil Corp. has completed the sale of non‐core light oil assets at Placid, Saxon, and Simonette to an undisclosed private company for $118.6 million (CAD 160 million) in cash before closing adjustments. The assets in the transaction were Athabasca’s 70-percent operated working interest in Placid targeting the Montney shale play, its 30-percent non‐operated working interest in Saxon and Simonette targeting the Duvernay play, and other associated non‐core Placid Montney assets, the company said in a news release Thursday. In the first half of the year, the assets collectively averaged around 3,000 barrels of oil equivalent per day (boepd), which were around 45 percent liquids. The effective date of the transaction is March 1, according to the release. The transaction, which was announced in July, was completed “at attractive and accretive metrics, and crystallizes the value of the assets that have become non‐core due to the smaller scale, lower liquids content and lower relative returns versus core assets within the company’s portfolio”, Athabasca said. Athabasca’s Light Oil division now consists exclusively of the Duvernay in the Greater Kaybob area with approximately 155,000 gross acres across Kaybob West, Kaybob North, Kaybob East, and Two Creeks. The company is planning a Duvernay activity that is expected to offset production from the transaction and support the company’s multi‐year free cash flow outlook. Athabasca said it is “uniquely positioned” in the liquids‐rich oil window of the play with a de‐risked inventory of around 500 gross wells. Athabasca expects its annual production to be within the previous guidance of 34,500 to 36,000 boepd, adding that the strong performance of the company’s assets to date, including the recent ramp‐up of the five new sustaining well pairs at Leismer, are expected to offset production associated with the transaction in the company’s original guidance, according to the release.
EIA Boosts Brent and WTI Oil Price Forecasts -The U.S. Energy Information Administration (EIA) increased its Brent and West Texas Intermediate (WTI) spot average price forecasts for both 2023 and 2024 in its latest short term energy outlook (STEO), which was released this week. In the latest STEO, the EIA projected that Brent spot prices will average $84.46 per barrel this year and $88.22 per barrel next year and that WTI spot prices will average $79.65 per barrel in 2023 and $83.22 per barrel in 2024. In its previous STEO, the EIA predicted that Brent spot prices would come in at $82.62 per barrel this year and $86.48 per barrel next year. In that STEO, the WTI spot price was anticipated to average $77.79 per barrel in 2023 and $81.48 per barrel in 2024. The EIA’s latest STEO sees the Brent spot price averaging $86.09 per barrel in the third quarter, $92.68 per barrel in the fourth quarter, $91 per barrel in the first quarter of 2024, $88 per barrel in the second quarter of next year, and $87 per barrel in both the third and fourth quarter of 2024. The WTI spot price will average $81.48 per barrel in the third quarter, $87.68 per barrel in the fourth quarter, $86 per barrel in the first quarter of next year, $83 per barrel in the second quarter, and $82 per barrel in both the third and fourth quarters, according to the September STEO. “Following Saudi Arabia’s September 5 announcement to extend its voluntary one million barrel per day production cut through the end of this year, we expect that global oil inventories will fall over that period, adding upward pressure to oil prices in the coming months,” the EIA said in its latest STEO. “The Brent crude oil spot price in our forecast averages $93 dollars per barrel in the fourth quarter of 2023. Prices should decline beginning in 2024 as oil inventories build, with prices averaging $88 per barrel next year,” it added. “The inventory builds next year largely reflect slowing oil demand growth, non-OPEC oil production growth, and the end of Saudi Arabia’s voluntary production cuts,” the EIA continued. The EIA noted in the September STEO that its current assessment is that global oil inventories are falling by 0.6 million barrel per day in the third quarter. “Inventory draws moderate to 0.2 million in 4Q23, but OPEC+ cuts to oil production keep global oil production lower than global oil demand,” the EIA said in the STEO. “As a result, we expect the Brent spot price will remain above $90 per barrel through 1Q24 before averaging $87 per barrel over the remaining three quarters of next year,” it added. “However, the potential for continued voluntary production cuts creates some upside risk for oil prices,” it continued.
US behind more than a third of global oil and gas expansion plans, report finds - The US accounts for more than a third of the expansion of global oil and gas production planned by mid-century, despite its claims of climate leadership, research has found.Canada and Russia have the next biggest expansion plans, calculated based on how much carbon dioxide is likely to be produced from new developments, followed by Iran, China and Brazil. The United Arab Emirates, which is to host the annual UN climate summit this year, Cop28 in Dubai in November, is seventh on the list.The data, in a report from the campaign group Oil Change International, also showed that five “global north countries” – the US, Canada, Australia, Norway and the UK – will be responsible for just over half of all the planned expansion from new oil and gas fields to 2050.Greenhouse gas emissions from all of the oil and gas expansion that is planned in the next three decades would be more than enough to drive global temperatures well beyond the limit of 1.5C above pre-industrial levels that countries agreed in 2021 at Cop26 in Glasgow, the report found.The International Energy Agency warned in 2021 that no new oil and gas exploration and development could take place if the world was to stay within the 1.5C limit. But only a handful of countries with oil and gas reserves are forswearing new exploration and drilling.Romain Ioualalen, the global policy lead at Oil Change International and co-author of the report, said countries must call a halt to fossil fuel expansion. “It’s simple: when you are in a hole, the first step is to stop digging,” he said. “The climate crisis is global in nature, but is atrociously unjust. A handful of the world’s richest nations are risking our future by willingly ignoring the calls to rapidly phase out fossil fuels.”The report, titled Planet wreckers: how 20 countries’ oil and gas extraction plans risk locking in climate chaos, published on Tuesday, found that 20 countries were responsible for plans for new oil and gas developments by 2050 that would add about 173bn tonnes of carbon dioxide to the atmosphere. That amount is the same as the lifetime emissions of 1,100 coal-fired power plants, or more than 30 years of the US’s annual emissions.
New fossil fuel projects ‘very unwise economic risk’ says global energy chief - Countries and companies planning to expand their fossil fuel production are taking “very unhealthy and unwise economic risks” as their investments may not be profitable, the world’s foremost energy adviser has warned.Fatih Birol, the executive director of the International Energy Agency (IEA), predicted this week that fossil fuels would peak this decade, a historic turning point for the climate. But despite the likelihood of demand declining, and the threat of climate chaos, many countries and private sector companies are considering new capacity.Birol said: “New large-scale fossil fuel projects not only carry major climate risks, but also business and financial risks for the companies and their investors.“When I talk with the oil companies, both international and national oil companies, some of them are saying that we have been underinvesting in oil and gas. But companies and investors should be very careful about this claim, bearing in mind the demand trajectories we are seeing. It could lead them into taking very unhealthy, unwise economic and climate risks.”Governments should be urgently discussing the phasing-out of fossil fuels at Cop28, the forthcoming UN climate summit, Birol said. The question of phasing out was dropped at last year’s Cop, but many countries plan to reignite the debate this year.But even with governments’ current climate policies, which are inadequate and need to be toughened, the amount of oil and gas needed globally will decline, Birol noted.“If you start a project today, wherever you are, the first oil or gas will come to markets in five years, and will come at a time when you will see global oil and gas trends declining,” he told the Guardian in an interview. “Therefore, one should be very careful about not only the climate risk, but also the business risk on large-scale oil and gas projects.”Birol refused to single out any countries, but several developed and developing economies are planning large expansions of their fossil fuel production, despite their commitments to limiting global temperature rises to 1.5C above pre-industrial levels. The US was this week found to be planning the world’s biggest share of global oil and gas expansion between now and 2050, and the UK government plans scores of new oil and gas licences as the prime minister,Rishi Sunak, vowed to “max out” the North Sea.Several countries and companies planning expansions have cited findings from the IEA that oil and gas will still be needed in the future, even when the world reaches net zero greenhouse gas emissions, as justification for their plans. Birol warned that they were not taking on board the IEA’s full advice: “We will definitely need oil and gas in years and years to come, but the issue is the amount of oil and gas we will need globally will be less and less.”He said: “They are misjudging the market trends – they believe what they want to believe. And they also misjudge the mood of the people in the street as far as climate change is concerned, and their responsibility.”Birol applauded the proposed commitment to triple global renewable energy capacity, likely to be a centrepiece of Cop28, which will take place from late November in Dubai. But he said this commitment was insufficient and that the rapid decline of fossil fuels was also needed to keep the world within 1.5C.“The increase of renewables is good, but in the absence of a decline in fossil fuels, the impact on temperature trajectories will be minimal or nothing,” he said. “There should be a discussion [of the phase-out of fossil fuels at Cop28]. And I hope that discussion will give a signal to the markets that fossil fuel consumption will fall.”
Countries Emit More Methane than Reported to UN: Study - Observed methane releases from global oil and gas operations are 30 percent higher than what countries estimate in reports to the UN, according to a new study that analyzed satellite observations of the potent greenhouse gas. The world’s four largest oil and gas emitters, the US, Russia, Venezuela and Turkmenistan, account for most of the overall discrepancy, according to the report published last month in Nature Communications. The satellite data challenges figures reported to the UN, which rely on so-called emissions factors — estimates for how much methane equipment might normally release — applied to production and use rates. The real-world data recorded by satellites suggests those estimates are way too low. The authors used a “top-down” approach to model and estimate emissions for most of the world with fossil fuel production by using 22 months of detections from the European Space Agency’s Sentinel-5P satellite. “Satellite data should be used to monitor the accuracy of the national emission inventories submitted” to the UN, said Daniel Jacob, one of the authors and a professor at Harvard University’s department of earth and planetary sciences. Adding top-down methods to the bottom-up estimates currently used would more accurately pinpoint who and what is responsible for methane emissions and offer governments a clearer picture of how to make the cheapest and most effective cuts. The new research is notable for its breadth, covering 96 percent of global emissions from oil and gas and bolstering previous studies that have detailed underreporting of methane emissions. Methane is the primary component of natural gas, but it can also leak from the Earth during oil and coal production. The potent greenhouse gas has more than 80 times the warming power of carbon dioxide during its first two decades in the atmosphere. Curbing releases of the gas could do more to slow climate change than almost any other single measure. Three of the ten largest oil and gas methane emitters identified in the report — the US, Canada, Uzbekistan and Saudi Arabia — have signed the the Global Methane Pledge, which targets a 30 percent reduction in global emissions of the gas by the end of this decade from 2020 levels. If methane generated from human activity is responsible for a larger share of the world’s total emissions, including from natural sources, then a 30 percent cut from that activity would have a bigger effect on overall methane concentrations, according to Jacob. The study identified significant opportunities to reduce methane emissions in Venezuela, Turkmenistan, Uzbekistan, Angola, Iraq, Ukraine, Nigeria and Mexico, all of which have methane intensities between 5 percent and 25 percent for their oil and gas industries. Lowering those intensities to the global average of 2.4 percent would reduce emissions from the sector globally by 18 percent.
Gas markets are becoming 'extremely difficult' to predict. It's a big problem for Europe this winter Energy analysts are warning of more gas market volatility and higher prices as Europe races to prepare for another winter heating season. European gas markets have been constantly fluctuating in recent months, owing to extreme heat, maintenance at gas plants and, most recently, industrial action at major liquefied natural gas (LNG) facilities in Australia. Workers at U.S. energy giant Chevron’s Gorgon and Wheatstone natural gas projects in Western Australia went on strike last week, after a protracted dispute over pay and job security. Work stoppages of up to 11 hours are scheduled to continue through to Thursday, at which point the action is poised to ramp up to a total strike of two weeks. At present, no further talks are scheduled to resolve the dispute, exacerbating fears that a prolonged halt to production would squeeze global supplies. Australia is a major player in the global LNG market — and even though most of its exports are destined for Japan, China and South Korea, disruption from the strikes is likely to result in Asia and Europe competing for LNG from other suppliers. The front-month gas price at the Dutch Title Transfer Facility (TTF) hub, a European benchmark for natural gas trading, traded 1.4% higher on Tuesday morning at 36.3 euros ($38.91) per megawatt hour. The TTF contract rose to around 43 euros last month amid fears of strike action. “The fear of an unbalanced gas supply and demand seesaw has dominated markets,” Ana Maria Jaller-Makarewicz, energy analyst at the Institute for Energy Economics and Financial Analysis, a U.S.-based think tank, said in a research note. She said the combination of lower gas consumption and Europe filling up its storage facilities ahead of schedule had helped to prevent gas prices from skyrocketing to last summer’s extraordinary peak of 340 euros. However, given the uncertainty over how the situation in Australia will unfold, Jaller-Makarewicz said Europe should brace itself for more volatility and an increase in prices.
Chevron Australia LNG Workers Begin Strike -- Workers at Chevron Corp.'s liquefied natural gas (LNG) facilities in Australia started their planned strike of at least three weeks on Friday, which could threaten supply to Asian markets. Most of the output from Chevron Australia Pty. Ltd's Gorgon and Wheatstone projects, as well as the North West Shelf facility in which it holds a non-operated stake, goes to Asian countries, with whom it has long-term contracts, according to the company. "Within 24 hours of Protected Industrial Action commencing on Chevron’s Gorgon and Wheatstone facilities, Chevron have started evacuating their contractor workforce", the Offshore Alliance said in a statement on Facebook. "Chevron chartered a special flight this morning [September 8] to Barrow Island to evacuate 50 blue and white collar contract crew off the Gorgon Project", the union added. Rigzone asked Chevron Australia Pty. Ltd. on the weekend for confirmation of the development but has yet to receive a response. The commencement of the strike by the Offshore Alliance, which consists of the Australian Workers' Union (AWU) and the Maritime Union of Australia, means intervention by Australia's Fair Work Commission (FWC), confirmed by the AWU in a statement on September 1, failed. The Offshore Alliance earlier extended the strike for at least two more weeks after the initially planned seven-day walkout, accusing the energy giant of circumventing bargaining negotiations. "The Offshore Alliance lawyers have served Chevron with a further Notice of Protected Industrial Action which will commence after our first 7 days of PIA kicks off on Thursday 7th September", the union said in a statement on Facebook September 5. "The new Protected Industrial Action Notice will escalate workbans and the OA [Offshore Alliance] will have rolling 24 x 1 hour stoppages, each day for 14 days from Thursday 14th September". The Offshore Alliance had said a majority of workers at the Gorgon and Wheatstone facilities in Western Australia voted for a strike to press for better employment standards. Of 253 Offshore Alliance members at Gorgon 249 voted in the strike ballot, all in favor. Of 188 members at Wheatstone 184 voted, all in support of a strike.
EU Taps Ukraine Storage Facilities to Secure Gas Supply - The European Union had about 3.53 trillion cubic feet (100 billion cubic meters) of stored gas as of this week, only six percent short of reaching capacity. While this level shows the region is moving toward stabilizing the market, the EU has started sending gas to Ukraine for future re-export to the bloc to help secure supply, EU Energy Commissioner Kadri Simson said Thursday. The 27-member group had a month ago already reached its annual target of restocking gas storage facilities to at least 90 percent of capacity. On August 18 the EU Directorate-General for Energy reported 3.28 trillion cubic feet (93 billion cubic meters) or 1,024 terawatt hours (tWh) in store, 90.12 percent of capacity. "This week, EU-wide storage level is at over 94 percent of capacity", Simson told a forum in Warsaw Thursday, according to a transcript on the European Commission website. "Having in storage approximately 100 bcm [billion cubic meters] sends an important signal to stabilize markets. "Additional volumes are now flowing towards Ukraine, and Ukraine's significant storage capacity is already being used by customers". Simson added she is working with Ukraine Energy Minister German Galushchenko "to facilitate further regulatory de-risking, to allow EU companies to tap fully into the potential of Ukraine's very big gas storage". The EU had used storage facilities in Ukraine for extra supply in 2020, as confirmed by Ukraine's state-owned gas storage operator Ukrtransgaz JSC. The EU accounted for the majority of the 353.15 billion cubic feet (10 bcm) non-resident contribution to Ukraine's 2020 injection of 999.41 billion cubic feet (28.3 bcm) that year, the highest level over the last decade, Ukrtransgaz said in a press release November 17, 2020. That was before Russia invaded Ukraine February 2022, but Simson said in the Poland forum "gas can be re-exported back [from Ukraine] to the EU even under stress conditions". Eighty percent of Ukrtransgaz' total storage capacity of 1.09 trillion cubic feet (30.95 bcm) is "close to EU", Ukrtransgaz said in a report to the EU-led Energy Community agency dated September 1, 2021. "Ukraine's compliance with the requirements of the Third Energy Package proved its intentions for integration to EU gas market and, accordingly, developed the business interest of international players", it said in the report, referring to a set of EU rules adopted 2009. Non-government research organization Bruegel warned July that at the pace of replenishment this year, EU storage facilities "will be full [as early as September] and winter demand will not yet have picked up".
TotalEnergies Plans to Power European Refineries with Green Hydrogen - TotalEnergies SE is launching a “massive” green hydrogen tender to reduce the carbon emissions of its six European refineries and two French biofuel plants as pressure mounts on the industry to fight climate change. The French energy giant plans to replace the entire 500,000 tons of gray hydrogen used annually in its refineries in France, Belgium, Germany and the Netherlands with green hydrogen by the end of the decade, the company said in a statement Thursday. That would avoid emissions of about 5 million tons of carbon dioxide, crucial for reducing the greenhouse gas releases of its oil and gas operations by 40 percent between 2015 and 2030. The process will be scrutinized as European governments are pledging billions of euros to support the gas produced with water and renewable power, and zero emissions. This so-called green hydrogen is tipped by the European Union as key to decarbonize industries such as refining and fertilizers. However, its global market is currently tiny as it’s more expensive than its widely used “gray” version made with fossil fuels. “Our goal is to find green hydrogen at the most competitive cost from suppliers of various horizons, by testing local markets as well as imports,” Jean-Marc Durand, Total’s head of European refining and petrochemical operations, said at a press briefing. “We imagine that incentives such as European policies can make green hydrogen competitive,” though imports might be needed to help fill what is likely the world’s biggest tender for the clean fuel, he said.
West Declines to Adjust Russian Oil Price Ceiling as Moscow Exports Above the Cap - After nine months of a Western-imposed price ceiling on Russian oil exports, the Kremlin has developed a slate of countries willing to import energy from Moscow. Initially, Moscow priced its oil at a heavy discount to draw in customers, but Russia has recently been able to sell its energy at near market value.In December, the US and the Group of 7 (G7) announced that any firms or countries buying Russian oil for over $60 per barrel would face economic penalties. Last month, Russian oil sold on the market for an average of $74 per barrel, well above the price cap.Callum Macpherson, head of commodities at Investec, explained Moscow’s first response to the price cap. “The sanctions have not led to a significant curtailment in Russian output as the market has been able to reorganize itself to reroute trade flows to keep Russian crude in the market,” he said. “Russia has had to accept a significant discount to achieve this.”Jorge León, vice president and head of oil analysis at the Rystad Energy consultancy, told EL PAÍS that the discount has significantly shrunk. “Historically, before the war, both mixtures were practically at parity.” He continued, “Last year, with the cap and the sanctions, the discount reached $40 per barrel. Today, we’re at around $15. That’s thanks to the cap [on Russian oil prices], although it has been less relevant than initially expected.”Oilprice.com reports the discount on Russian oil has decreased to as little as $5 per barrel.Reuters reports the US and its partners in the G7 have no plans to adjust the price cap on Russian oil. “The G7 and allies have shelved regular reviews of the Russian oil price cap scheme, people familiar with the matter told Reuters,” the outlet reported last week. The last time the cap was reviewed was in March.The trend is likely to continue as Moscow is finding new major buyers for Russian oil. This week, the first Russian oil tanker is expected to arrive in Brazil with 650,000 barrels of oil.León additionally notes Moscow has now developed a fleet of ships to sell its energy to new partners. “Russia has developed its national fleet of oil tankers to be able to carry that crude – especially to Asia – and it has gotten Chinese and Indian companies to participate in the transport of that crude. And that makes the cap less effective, because Russia is able to export its crude without resorting to European services, especially British and Greek fleets,” he said.
Urals Discount to Brent $16.3 - by Menzie Chinn -- From TradingEconomics, accessed just now: Graph Source: TradingEconomics.com, accessed 9/12/2023. The Urals percent discount relative to Brent is about the same in the last observation plotted as the week of 2/27/2022. Is Brent likely to break $100? Latest DoE EIA forecasts (September, as of today) forecast peaks at $92.7 in 2023Q4.
Ukraine Says Black Sea Platforms Used by Russian Forces Captured - Ukraine’s military intelligence service said its forces regained control of several drilling platforms in the Black Sea that were used by Russia for stationing helicopters and radar activity. Special forces units seized a stockpile of helicopter ammunition and a Neva radar system used to track naval movements from the platforms off Crimea’s coast, the Defense Ministry’s GUR spy agency said in a statement on Monday. A Russian Su-30 fighter jet that engaged with Ukrainian forces on boats was damaged and retreated, GUR said. The agency said intelligence units carried out a “unique operation” to retake the Petro Godovenets and Ukraina drilling platforms, as well as the Tavryda and Syvash facilities. Russia’s Defense Ministry has made no mention of the operation. Ukraine has cited slow advances on the southern front in recent weeks, with the military seeking to break Russian defensive lines and recapture territory. Last month, Ukrainian commandos staged a raid in Russian-occupied Crimea — a symbolic operation on Ukraine’s Aug. 24 Independence Day — in an effort to showcase attacks behind front lines. The drilling platforms were purchased and installed in 2011 in area around the Odesa gas field, intended to be part of Ukraine’s oil-and-gas production infrastructure. Russia occupied them in 2015, a year after annexing Crimea from Ukraine, and relocated them closer to the peninsula.
Oil spill from Uran plant caused no damage to farmers, fishermen, says ONGC - State-run ONGC on Sunday said that the recent oil spill from a crude oil storage tank at its plant in Uran, a coastal town in Maharashtra, has not caused any damage to farmers and fishermen and has described the incident as a "minor" oil spill. The statement comes after the oil spilled into a stormwater drainage channel. "There is no damage to either farmers or fishermen due to the minor oil spill near Uran beach recently," said the ONGC statement The statement noted that on Friday morning, a "minor" quantity of oil leaked from one of the crude oil storage tanks at the ONGC Uran plant and due to heavy rains, the leaked oil entered the stormwater drain channel. "As the quantity of oil leakage from the plant area was minimal, the leaked oil got trapped between rocks on the beach with only traces reaching the shoreline," it said. ONGC said that the Oil Spill Response (OSR) team from ONGC was immediately deployed to avoid ingress of oil into the sea and cleaning of the shoreline commenced on war footing. Noting that due to heavy rains on the day of the incident and the beach being a rocky area, the cleaning took a lot of effort, the company said that due to the ONGC team's timely and tireless efforts, the oil did not enter the sea and no damage to marine life is anticipated. The company further said that local villagers had taken an "unauthorized water connection" to their fields by breaching the stormwater drain channel wall from the plant for irrigation purposes, due to which a small quantity of oil entered only four-five paddy fields. "The damage to paddy fields is also very limited. None of the fishermen have suffered any loss due to the small oil spill, as it on the rocky part of the beach," it said, adding that "prompt and proactive" actions by ONGC for cleaning of oil from the beach and drain channels have led to an early restoration, which is now nearing completion.
Libya Says Oil Production Remains Unaffected by Deadly Floods - Libya’s state oil company said there has been no disruption to crude output following a storm that unleashed deadly flooding and left at least 5,500 people dead in the North African country. Oil-export ports in the east were unharmed by the storm and operating normally, Farhat Bengdara, chairman of the National Oil Corporation, said in an interview. Amos Hochstein, US President Joe Biden’s senior adviser for energy, had earlier said on Bloomberg Radio that there had been some curtailments following the disaster. Libya had shut export ports in the east during the storm last weekend, and had reopened them by Tuesday. NOC said then that oil output was running at 1.2 million barrels a day. It didn’t say what level production was at on Friday. Italy’s Eni SpA said the floods hadn’t impacted its Libyan operations. Torrential rain unleashed by Mediterranean storm Daniel collapsed two dams, which devastated the coastal city of Derna in northeast Libya. Relief workers and international organizations are still searching for survivors among collapsed buildings. The destruction has again brought Libya’s oil industry into focus. The country sits atop Africa’s biggest reserves, but production has been regularly disrupted over the years by armed groups. Libya has, however, been more stable since a truce in a civil war around mid-2020, with crude output holding above 1 million barrels a day for most of this year. Still, it remains divided between rival administrations.
OPEC Chief Warns of Energy Chaos - OPEC’s top official warned against abandoning fossil fuels, hitting back once again at remarks from the world’s energy watchdog. Cutting out hydrocarbons “would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world,” Secretary-General Haitham Al-Ghais said Thursday in a statement. On Wednesday, the International Energy Agency said oil demand may plateau this decade as consumers shift more to renewables to avert catastrophic climate change. “We may be witnessing the beginning of the end of the fossil-fuel era,” IEA Executive Director Fatih Birol said. The clash marks yet another war of words between the Organization of Petroleum Exporting Countries and the IEA, which has criticized Saudi Arabia and its partners for risking an inflationary surge by driving up fuel prices. The Paris-based IEA described the OPEC+ alliance, led by the Saudis and Russia, as a “formidable challenge” to the stability of oil markets, which have faced considerable disruption from Moscow’s invasion of Ukraine.
At What Level Will Saudi Arabia And Russia Stop Pushing Oil Prices Higher? -The decisions last week by Saudi Arabia to continue its 1 million barrel per day (bpd) production cut to the end of this year and by Russia to extend its 300,000 barrels per day export cut for the same period conspired to push oil prices to their highest level since last November. This in turn has added to the inflationary pressure threatening the economic health of the U.S. and many countries allied to it. The question for these net oil importers (and gas importers too, given that historically 70 percent of gas prices have been comprised of the price of oil) is at what level the two leaders of OPEC+ will halt their efforts to keep pushing prices higher? The first part of this equation revolves around the necessity or not of higher prices to keep these two economies afloat, or whether it is simply greed at work, or a geopolitical power play, or any combination thereof. It is a common conception that Saudi Arabia’s economy is a powerhouse, fuelled by vast revenues from oil. The latter part has some truth to it, helped by having (along with Iran and Iraq) the lowest lifting cost per barrel of oil in the world, at just US$1-2. This said, much of these revenues are deducted almost at source, through the massive dividend repayment obligations that must be made every quarter by Saudi Aramco. Even with Brent oil price averaging around US$80 pb in Q2, 65 percent of its net income went on this debt payment to shareholders. If its net income stayed the same in Q3, this debt payment would rise to 98 percent. What is left after these deductions is the foundation stone of all Saudi Arabia’s spending, which includes not just the basic functions of state – such as health, education, and defence – but vast socioeconomic and vanity projects as well, as analysed in depth in my new book on the new global oil market order. In theory, then, Saudi Arabia’s fiscal breakeven oil price is US$78 pb of Brent. In practice, however – as the fiscal breakeven oil price is the minimum price per barrel that an oil-exporting country needs to meet its expected spending needs while balancing its official budget – its true fiscal breakeven oil price has no set limit. The same applies to Russia. For around 20 years, it had a fiscal breakeven oil price of around US$40 pb. Following its invasion of Ukraine on 24 February 2022, though, officially this has jumped to US$115 pb. Unofficially, as wars do not adhere to easily quantifiable and strictly adhered to budgets, the unofficial fiscal breakeven oil price is whatever President Vladimir Putin thinks it should be at any given moment. The first part of the equation, then, is that both Saudi Arabia and Russia absolutely need to keep pushing oil prices higher, which moves the equation into its second part – at what level will they face overwhelming pressure from their customers to stop doing so?The first group of customers are the U.S. and its core allies, in which ever-increasing oil and gas prices have caused dramatic spikes in inflation and the interest rates required to combat it, which in turn make economic recessions more likely. For the U.S. itself, these fears have very specific ramifications: one economic and one political, as also analysed in my new book on the new global oil market order. The economic one is that historically every US$10 pb change in the price of crude oil results in a 25-30 cent change in the price of a gallon of gasoline. For every 1 cent that the average price per gallon of gasoline rises, more than US$1 billion per year in consumer spending is lost, and the U.S. economy suffers. The political one is that, according to statistics from the U.S.’s National Bureau of Economic Research, since the end of World War I in 2018, the sitting U.S. president has won re-election 11 times out of 11 if the U.S. economy was not in recession within two years of an upcoming election. However, sitting U.S. presidents who went into a re-election campaign with the economy in recession won only one time out of seven. This is not a position sitting President Joe Biden, or the Democratic Party, wants to be in one year out from the next U.S. election.
USA Confirms April Seizure of Tanker Carrying Iran Oil - The USA Department of Justice (DOJ) has confirmed the confiscation in April of a tanker carrying what it said was "contraband crude oil" from Iran. Empire Navigation Inc.'s Suez Rajan Ltd. was transporting a 980,000-barrel, "multimillion-dollar shipment" of the Islamic Revolutionary Guard Corps (IRGC), a security force designated by Washington as a terrorist organization, the DOJ said in a press release Friday. The operator is based in Athens, Greece. "This is the first-ever criminal resolution involving a company that violated sanctions by facilitating the illicit sale and transport of Iranian oil", read the media statement. The Associated Press earlier reported the shipping company had pleaded guilty to smuggling Iranian petroleum and agreed to pay $2.4 million. Empire Navigation faces three years of probation under the plea deal, it said Thursday citing court documents it had seen. The District Court of Columbia's website shows the case, which had a filing date of August 30, has been unsealed but has yet to be displayed publicly. "The newly unsealed court documents rely on satellite images, as well as documents, to show that the Suez Rajan sought to mask its loading of Iranian crude oil from one tanker by trying to instead claim the oil came from another", The Associated Press wrote. The DOJ account of the case said, "In addition, pursuant to a deferred prosecution agreement and a seizure warrant issued by the U.S. District Court for the District of Columbia, Empire Navigation, the operating company of the vessel carrying the contraband cargo, agreed to cooperate and transport the Iranian oil to the United States – an operation which has now concluded. "Empire Navigation incurred the significant expenses associated with the vessel’s voyage to the United States". The DOJ added the oil consignment is now the subject of a civil forfeiture suit in the same court. "The United States’ forfeiture complaint alleges that the oil aboard the vessel is subject to forfeiture based on U.S. terrorism and money laundering statutes", it said. Besides Empire Navigation, "multiple entities affiliated with Iran’s IRGC and the IRGC-Qods Force (IRGC-QF)" participated in the scheme to covertly sell the oil to a customer overseas, the DOJ said citing the forfeiture complaint, not naming the destination country. "Participants in the scheme attempted to disguise the origin of the oil using ship-to-ship transfers, false automatic identification system reporting, falsified documents and other means", the DOJ said. "The complaint further alleges that the charterer of the vessel used the U.S. financial system to facilitate the transportation of Iranian oil."The complaint further alleges that the oil constitutes the property of, or provided a 'source of influence' over, the IRGC and the IRGC-QF, both of which have been designated by the United States as foreign terrorist organizations, and that the oil facilitated money laundering. The documents allege that profits from oil sales support the IRGC’s full range of malign activities, including the proliferation of weapons of mass destruction and their means of delivery, support for terrorism and both domestic and international human rights abuses".
USA Allows Release of $6 Billion in Oil Proceeds to Iran -The US cleared the way for $6 billion in oil proceeds to be returned to Iran and agreed to release five Iranians as part of a secretly negotiated deal that will clear the way for five American citizens detained in Iran to return home. Secretary of State Antony Blinken notified Congress on Monday of a waiver that will let German, Irish, Qatari, South Korean and Swiss banks transfer the $6 billion from South Korea without fear of running afoul of US sanctions. He said the $6 billion would be held in restricted accounts in Qatar, where it will be “available only for humanitarian trade,” according to a copy of the notification. An Iranian government spokesman said earlier Monday that he expected the transfer of frozen funds to be completed in the “next few days.” The letter to Congress didn’t say when the prisoner exchange would take place. Adrienne Watson, a spokeswoman for the White House National Security Council, said in a statement that “what is being pursued here is an arrangement wherein we secure the release of five wrongfully held Americans. This remains a sensitive and ongoing process. While this is a step in the process, no individuals have been or will be released into US custody this week.” American officials had announced the broad outlines of the deal in early August after Iran moved four US citizens from prison to house arrest. The American prisoners include Siamak Namazi, who has been held in Tehran’s Evin prison since October 2015. At the time, US officials declined to describe details of the deal, saying that revealing more risked upsetting a delicate process that could still fall apart. They were also wary of acknowledging talks with a regime that has escalated human rights abuses and continues to supply weapons and other materiel to Russia for its invasion of Ukraine. Blinken signed the waiver on Friday. A State Department spokesperson, who asked not to be identified, said the Biden administration isn’t lifting any sanctions on Iran or providing any sanctions relief as part of the deal. People familiar with the matter have said that the US and Iran have been engaged for months in tentative and secretive diplomacy that’s seen the two sides inch toward an informal understanding under which Tehran would free the Americans and potentially slow or limit its enrichment of uranium. US officials have privately acknowledged they’ve already begun to relax enforcement of sanctions on oil sales, allowing Tehran to boost production. Iran, which has some of the world’s largest oil and gas reserves, has been shipping the most crude to China in a decade in recent months. The talks are part of a broader effort by the Biden administration to restore at least some of the restrictions Iran agreed to under a 2015 nuclear deal, the Joint Comprehensive Plan of Action. Then-President Donald Trump quit the JCPOA in 2018. Republicans and some Democrats in Congress have been critical of the Biden administration’s bid for new diplomacy with Iran, saying it will only encourage the regime to jail more Americans and press ahead with its nuclear development. Iran denies that it has any plan to acquire a nuclear weapon.