Focus on Fracking: January natgas price is lowest on record; oil price losing streak is longest in five years; 18.9 million barrels of oil disappear

oil price hits five month low; oil price losing streak is longest in five years; January 2024 natural gas contract price is lowest on record, despite the largest withdrawal of natural gas from storage in 10 months; US oil imports jump by most since May 2020; demand for oil that the EIA could not account for at a record high as 18,928,000 barrels disappear from balance sheet

US oil prices fell for a seventh straight week, the longest streak of weekly losses since 2018, and traded below $70 for the first time in 5 months on Thursday, before rebounding on Friday to settle down 3.8% at $71.23 a barrel on the week, as traders came to believe the market is oversupplied....after falling 1.9% to $74.07 a barrel last week even after OPEC announced additional output cuts, the contract price for the benchmark US light sweet crude for January delivery slid more than 1% on Monday as traders shrugged off reassurances by Saudi Arabia that OPEC'S production cuts of 2.2 million barrels per day (bpd) could be extended beyond the first quarter and settled $1.03 lower at 73.04 a barrel amid skepticism that OPEC+'s "voluntary' output cuts would result in actual cuts...oil prices continued their downward trend for the fourth consecutive session on Tuesday as several attempts to rebound throughout the day failed, and the January contract settled 72 cents or 1% lower at $72.32 a barrel after Saudi Aramco lowered its official selling price for January loadings to the key Asian market for the first time in seven months...oil prices extended their slide to a five month low early Wednesday following the American Petroleum Institute's report of across-the-board inventory builds, with the price plunge accelerating to a loss of $2.94 or more than 4% at $69.38 a barrel by the close following EIA inventory data that showed a much larger-than-expected build in gasoline and distillate stockpiles, despite a slower-than-usual return of refining from fall maintenance....oil prices retraced some of those sharp losses early Thursday, but again turned south to settle 4 cent s lower at $69.34 a barrel, the lowest settlement since June 27th, as traders turned cautious ahead of the next day's employment report and its potential impact on monetary policy...oil prices finally rallied for the first time in seven days on Friday and settled the session $1.89 or 2.5% higher 71.23 a barrel after a stronger-than-expected U.S. employment report diminished the outlook for recession early next year

Meanwhile, natural gas prices finished lower for a fifth straight week, while the price for the current January contract plunged to its lowest ever, despite the largest withdrawal of natural gas from storage in 10 months....after falling 6.2% to $2.814 per mmBTU last week on the latest unseasonal addition to gas inventories since 2017, the contract price for natural gas for January delivery fell 12.0 cents or more than 4% to $2.694 per mmBTU on Monday on record output and forecasts for mild enough weather that would limit heating demand...after recovering 1.5 cents of that on Tuesday as a mildly bullish shift in the latest forecasts provided support, natural gas prices tumbled another 14.1 cents, or by more than 5% to $2.569 per mmBTU on Wednesday pressured by a drop in oil prices, near-record U.S. gas output and forecasts for mostly mild weather through late December...after sliding another 6 cents on Thursday after Exxon delayed the startup of its Golden Pass export plant under construction, prices settled 1.6 cents higher at $2.585 per mmBTU after the EIA's natural gas storage report showed a 117 billion cubic foot withdrawal from storage for the week ended December 1st, the most since February 3rd of last winter...prices backed and filled Friday as record LNG exports offset forecasts for milder weather and lower heating demand and settled four-tenths of a cent lower at $2.581 per mmBTU, and thus ended with a 8.3% loss on the week...

The EIA's natural gas storage report for the week ending December 1st indicated that the amount of working natural gas held in underground storage in the US fell by 117 billion cubic feet to 3,710 billion cubic feet by the end of the week, which still left our natural gas supplies 254 billion cubic feet, or 7.3% above the 3,465 billion cubic feet that were in storage on December 1st of last year, and 234 billion cubic feet, or 6.7% more than the five-year average of 3,485 billion cubic feet of natural gas that were in working storage as of the 1st of December over the most recent five years…the 117 billion cubic foot withdrawal from US natural gas working storage for the cited week was the largest withdrawal from natural gas storage since February 3rd and was more than the average 106 billion cubic feet withdrawal from supplies that was expected by industry analysts surveyed by Reuters, as well as more than double the average 48 billion cubic feet withdrawal from natural gas storage that has been typical for the same late Autumn week over the past 5 years, and nearly quadruple the 30 billion cubic feet that were pulled from natural gas storage during the corresponding late November week of 2022……

The Latest US Oil Supply and Disposition Data from the EIA

The US oil data from the US Energy Information Administration for the week ending December 1st appeared to indicate that even after a big increase in our oil imports and a decrease in our oil exports, we needed to withdraw oil from our stored commercial crude supplies, for the first time in seven weeks, and for the 23rd time in the past 50 weeks, largely due to a record demand for oil that the EIA could not account for...Our imports of crude oil rose by an average of 1,675,000 barrels per day to average 7,508,000 barrels per day, the biggest jump in imports since May 2020, after our oil imports fell by an average of 696,000 barrels per day the prior week, while our exports of crude oil fell by 416,000 barrels per day to average 4,339,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 3,169,000 barrels of oil per day during the week ending December 1st, 2,091,000 more barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, natural gasoline, condensate, and unfinished oils averaged 734,000 barrels per day, while during the same period, production of crude from US wells was 100,000 barrels per day lower at 13,100,000 barrels per day. . Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 17,025,000 barrels per day during the December 1st reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,201,000 barrels of crude per day during the week ending December 1st, an average of 179,000 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 a rounded average of 615,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US, the largest withdrawal in thirteen weeks... So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending December 1st appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production was 1,417,000 barrels per day more than what our oil refineries reported they used during the week. To account for that big difference between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ -1,417,000 ] barrel per day figure onto what is now line 16 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the 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 an error in the week’s oil supply & demand figures that we have just transcribed.... Moreover, since 1,287,000 barrels of oil supplies per day were unaccounted for in last week’s data, that means there was a 2,704,000 barrel per day difference between this week's oil balance sheet error and the EIA's 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 complete nonsense....however, 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)….(note there is also an aging twitter thread from an EIA administrator addressing these errors, and what they had hoped to do about it)

This week's 615,000 barrel per day decrease in our overall crude oil inventories came as 662,000 barrels per day were removed from our commercially available stocks of crude oil, while 45,000 barrels per day were added to our Strategic Petroleum Reserve, the second SPR increase in nine weeks. . Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to 6,496,000 barrels per day last week, which was 2.9% more than the 6,314,000 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 lower at 13,100,000 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 lower at 12,700,000 barrels per day, while Alaska’s oil production was 8,000 barrels per day lower at 431,000 barrels per day but still added the same 400,000 barrels per day to the EIA's 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 matches that of our pre-pandemic production peak, and is 35.1% 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 90.5% of their capacity while processing those 16,201,000 barrels of crude per day during the week ending December 1st, up from their utilization rate of 89.8% last week, with national refinery utilization rates now rising after the annual Autumn seasonal maintenance, when refineries were switched over to produce winter blends of fuel.. however, the 16,201,000 barrels per day of oil that were refined this week were still 2.3% less than the 16,585,000 barrels of crude that were being processed daily during week ending December 2nd of 2022, and 3.6% less than the 16,798,000 barrels that were being refined during the prepandemic week ending November 29th, 2019, when our refinery utilization rate was at 91.9%..

With the increase in the amount of oil being refined this week, gasoline output from our refineries was finally higher, increasing by 180,000 barrels per day to 9,517,000 barrels per day during the week ending December 1st, after our refineries' gasoline output had decreased by 35,000 barrels per day during the prior week. This week’s gasoline production was 5.0% more than the 9,065,000 barrels of gasoline that were being produced daily over the same week of last year, but 4.3% less than the gasoline production of 9,941,000 barrels per day during the prepandemic week ending November 29th, 2019....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 72,000 barrels per day to 5,070,000 barrels per day, after our distillates output had increased by 60,000 barrels per day during the prior week. But even with those increases, our distillates output was 4.9% less than the 5,332,000 barrels of distillates that were being produced daily during the week ending December 2nd of 2022, and 3.7% less than the 5,263,000 barrels of distillates that were being produced daily during the week ending November 29th 2019..

With this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 5th time in seven weeks and for the 15th time in forty-one weeks, increasing by 5,420,000 barrels to 223,604,000 barrels during the week ending December 1st, after our gasoline inventories had increased by 1,764,000 barrels during the prior week. Our gasoline supplies rose by more this week even though the amount of gasoline supplied to US users rose by 260,000 barrels per day to 8,466,000 barrels per day, because our exports of gasoline fell by 227,000 barrels per day to 948,000 barrels per day, and because our imports of gasoline rose by 226,000 barrels per day to 689,000 barrels per day.…Even after twenty-six gasoline inventory withdrawals over the past forty-one weeks, our gasoline supplies were still 2.1% above than last December 2nd's gasoline inventories of 219,087,000 barrels, and only 1% below the five year average of our gasoline supplies for this time of the year…

With this week's increase in our distillates production, our supplies of distillate fuels rose for the second time in ten weeks, increasing by 1,267,000 barrels to 112,045,000 barrels over the week ending December 1st, after our distillates supplies had increased by 5,217,000 barrels during the prior week. Our distillates supplies rose by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 742,000 barrels per day to 3,756,000 barrels per day, while our exports of distillates fell by 119,000 barrels per day to 1,215,000 barrels per day, and while our imports of distillates fell by 13,000 barrels per day to 82,000 barrels per day....With 23 inventory decreases over the past thirty-nine weeks, our distillates supplies at the end of the week were still 5.7% below the 118,807,000 barrels of distillates that we had in storage on December 2nd of 2022, and about 13% below the five year average of our distillates inventories for this time of the year...

Finally, even with our our oil imports much higher and our oil exports lower, our commercial supplies of crude oil in storage fell for the 13th time in twenty-six weeks and for the 23rd time in the past year, decreasing by 4,633,000 barrels over the week, from 449,664,000 barrels on November 24th to 445,031,000 barrels on December 1st, after our commercial crude supplies had increased by 1,610,000 barrels over the prior week... With that decrease, our commercial crude oil inventories were again about 1% below the most recent five-year average of commercial oil supplies for this time of year, but were still about 29% above the average of our available crude oil stocks as of the the weekend of November over the 5 years at the beginning of the past decade, with the big difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had 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 December 1st were 7.5% more than the 413,898,000 barrels of oil in commercial storage on December 2nd of 2022, and 2.8% more than the 432,870,000 barrels of oil that we still had in storage on December 3rd of 2021, but still 11.6% less than the 503,231,000 barrels of oil we had in commercial storage on December 4th of 2020, after early pandemic precautions had left a lot of oil unused…

This Week's Rig Count

since we haven't been able to get back on track for a detailed report on the national rig count, 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 December 8th, the second column shows the change in the number of working rigs between last week’s count (December 1st) and this week’s (December 8th) count, the third column shows last week’s December 1st active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was the 9th of December, 2022...

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Utica Drilling in Columbiana County, OH, Came Alive in November | Marcellus Drilling News - Columbiana County, OH, located in the northern portion of the Utica Shale play in the Buckeye State, has recently come roaring back to life. In 2022, there were 41 permits issued to drill in the Utica in Columbiana County. So far, in 2023, there have been 35 permits issued to drill in Columbiana County. But here’s the thing: 16 of this year’s 35 permits (half!) were issued in November! It’s like Columbiana had been asleep for most of this year, and then it suddenly came alive.

Columbiana County Oil Boom Shows No Signs of Slowing – Horizontal wells operating in Columbiana County during the third quarter have shattered oil production records in this tier of the Utica/Point Pleasant shale formation, according to data from the Ohio Department of Natural Resources. During the third quarter, the 138 producing wells in the county yielded a total of 352,354 barrels of oil during the period ended Sept. 30, according to ODNR. The previous record was 233,390 barrels produced during the first quarter of this year, data show. During the second quarter, Columbiana County’s wells yielded 142,669 barrels over a 90-day period. Much of the oil produced during the third quarter is from four wells recently drilled at the Sanor Farms well pad in Knox Township. EAP Ohio, a subsidiary of Houston-based Encino Energy Partners, placed the wells into commission during the third quarter, and together these four wells accounted for 258,739 barrels of oil. Three of these wells – the Sanor 6H, 8H and 10H – are ranked sixth, seventh and eighth, respectively, among the top 10 oil producers in the state, according to ODNR. All of the 10-best wells in Ohio are owned and operated by EAP. Oil production also proved strong from four EAP wells in Hanover Township at the Mountz well pad, records show. These four wells combined for another 89,913 barrels during the quarter, according to ODNR. According to ODNR records, the highest-producing oil well in the state during the third quarter was EAP’s Addy 10H well in Harrison County, which yielded 79,576 barrels. “Encino bet on Ohio in 2018, and we’re excited to see the results, particularly with wells in Columbiana County ranking in the top 10 for oil production statewide,” Encino spokeswoman Jackie Stewart said. “For the Mahoning Valley, this is particularly encouraging news, as we source our production casing for our wells in Youngstown and rely on hundreds of local supply chain businesses each and every day to make it happen.” EAP, which operates its regional office in Carrollton, remains optimistic about the prospects in the Utica/Point Pleasant, Stewart said. “Columbiana County has been a great partner and very welcoming over the past few years, and we continue to be optimistic about the running room to keep growing,” Stewart said. “There’s a lot of great reasons to keep investing and betting on Ohio, and that’s exactly what we intend to do.” During a recent appearance at the Hart Energy’s DUG Appalachia conference in Pittsburgh, Tim Parker, Encino’s chief technology officer, noted that promising well results in the Utica helped draw the company to Ohio. “We were convinced that the [Ohio Utica] would become exactly what it is now,” he said. Yet Columbiana County’s section of the Utica/Point Pleasant is not traditionally known for its oil production. Wells in the past have generally yielded a negligible amount of oil, as the region became more associated with a dry and wet gas window. However, oil production shot upwards during the first quarter, as the four Mountz wells in Hanover Township pumped out 228,058 barrels during the period, records show. Those wells produced 138,164 barrels during the second quarter, according to ODNR data. During the third quarter, total oil output across the state stood at 6.527 barrels, down from 6.921 barrels during the second quarter, data show. However, oil production in Ohio’s Utica during the third quarter is more than 1.6 million barrels greater than the same period a year ago, when Ohio wells generated 4.9 million barrels. While oil production increased in Columbiana County compared with the previous two quarters, natural gas output remained flat, ODNR records show. Horizontal wells in the county accounted for 20.8 billion cubic feet of natural gas production, even with the previous quarter’s production. The single largest gas producing well in Columbiana County was EAP’s Maskaluk well pad in Washington Township, which yielded 777.749 billion cubic feet over a 90-day period. EAP reported a total of 9.98 billion cubic feet of natural gas from its Columbiana County wells during the third quarter. Hilcorp Energy Co., another active producer in Columbiana County’s Utica, reported its wells delivered 10.695 billion cubic feet of gas during the period. The largest producer in Ohio was SWN Production’s well in Monroe County, which produced 4.283 billion cubic feet of gas during a 90-day period. In all, natural gas production across Ohio during the third quarter increased 2.2% to 547 billion cubic feet, compared with 535.5 cubic feet produced during the previous quarter, according to ODNR.

Here’s why those who run the MWCD are hypocrites - Randi Pokladnik - Make no mistake, money can influence some people to do just about anything. On Nov. 15, Ryan Richardson, Stephen Buehrer, Matthew Warnock, Michael Wise, and Jim McGregor –members of the Oil and Gas Land Management Commission — paved the way for fracking Ohio’s state parks. During that meeting, the commission approved fracking leases for Salt Fork State Park, Zepernick Wildlife Area and Valley Run Wildlife Area, even though more than 100 Ohioans present at the meeting expressed their outrage. No doubt, the OGLMC was influenced by the Muskingum Watershed Conservancy District’s March 1 presentation which focused on how much money could be made by fracking lands overlying the Utica and Marcellus shale. Like the OGLMC, the MWCD’s main concern is making as much money as quickly as possible from fracking. In fact, “no one has benefited financially as much as the Muskingum Watershed Conservancy District; Ohio’s No. 1 beneficiary of drilling.” Recently, the MWCD had Cleveland State University’s Energy and Policy Center conduct a non-peer reviewed study (see the 26-page report,“Economic Impact of the Muskingum Conservancy District on the Regional Economy, 2014- 2022.”) While this report tries to convince us that the MWCD has brought economic prosperity to the region, evidence shows a decline in population and local incomes. The 2020 census showed the“largest population drop among counties in Ohio occurred in Harrison County, which dropped 8.7 percent to 14,483.”A Feb. 12, 2021, study published by the Ohio River Valley Institute, a nonprofit research center, found that “jobs, personal income and population all declined between 2008 and 2019 in the 22 Ohio, Pennsylvania and West Virginia counties that produce 90 percent of Appalachia’s natural gas.”This included the MWCD counties of Belmont, Carroll, Guernsey, Harrison and Noble, which saw a net job loss of more than 8 percent and a population loss of more than 5 percent. Additionally, the MWCD report was only concerned with economic impacts and did not include the health and environmental impacts from this development. The development being selling water for fracking, selling leases for fracking, and receiving royalties from fracking.Peer-reviewed studies as well as the citizens living in the 18-county region of the MWCD can provide data as to the impacts associated with fracking. The recently released 637-page report, “Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking and Associated Gas and Oil Infrastructure, Ninth Edition, Oct. 19,” says, “Our examination uncovered no evidence that fracking can be practiced in a manner that does not threaten human health directly or without imperiling climate stability upon which human health depends.”Accident reports obtained from a Freedom of Information Act request to the ODNR illustrate that this industry is anything but safe. Just since 2018, the ODNR data has documented more than 800 accidents considered serious enough to require inspectors, the Ohio Environmental Protection Agency and hazmat intervention to remediate the sites. In addition, Ohio has one of the most lenient set-backs for a well pad: 150 feet from a property boundary.More than 100 studies have documented hazardous and carcinogenic chemical compounds in the air around fracking sites. “Evidence shows that compressor stations along natural gas pipelines are sources of air pollutant exposures that contribute to adverse human health outcomes.” Oil and gas wells are the single largest source of human-caused methane gas emissions. Additionally, fracking produces millions of gallons of waste fluids containing heavy metals, salts, and radionuclides, which are injected into Class II injection wells.MWCD might “shield the well pads from public view” but those of us who live on or near MWCD property experience the negative impacts of fracking every day. We are losing forest acreage to well pads, infrastructure, roads and pipelines. We hear noise pollution and see light pollution from flaring. Our roads are traveled by hundreds of brine, sand and chemical tankers. We are witnessing MWCD’s greed turn our rural landscape into an industrial zone while our property values diminish.The MWCD is quick to brag about its $40 million dollar deal with Encino Energy or their $6.5 million marina at Tappan Lake, but the environmental damage that will occur to the local environment as the MWCD makes money from fracking is indefensible. They brag about all the economic benefits (see “Analysis shows MWCD plan has $1B impact on area’s economy,” Herald-Star, Nov. 25) they bring to the area, but a drive through the local communities shows no significant economic boom. Our family used to visit Tappan Park 20 years ago, but what the MWCD calls improvements looks more like an attempt to create a high-end camping resort. The new camping areas, depicted on Page 13 of the report, are now devoid of trees. Today there are only side-by-side concrete pads that will accommodate expensive RVs complete with satellite dishes and air conditioning. This is not camping, it is glamping. This is not the atmosphere that nature-lovers seek. Much of the money gained from fracking will be spent on MWCD infrastructure improvements inside the parks. Most locals will never use these facilities, but they will experience the externalities resulting from fracking.The definition of a conservancy is “A body concerned with the preservation of nature, specific species, or natural resources.” MWCD is not a conservancy. Real stewards of the environment do not embrace a process that contributes to climate change. They do not look the other way as fracking infrastructure destroys forested ecosystems. They do not ignore the volatile organic air emissions from fracking well pads, compressor stations and pipelines or the millions of gallons of surface water withdrawn for fracking fluids. Real stewards of the environment protect it, nurture it, and value the undisturbed beauty above and beyond any monetary value.

Ohio Utica Shale Production 3Q23 – Top Wells, Drillers & Counties | Marcellus Drilling News - The Ohio Dept. of Natural Resources (ODNR) released production numbers for the third quarter of 2023 late last week, and nobody noticed…except MDN (thanks to a tip from a good friend). ODNR no longer issues a press release to summarize the results as they once did. We’ve got the full spreadsheet with oil and gas production details for all 3,281 active shale wells in the Buckeye State. We’ve sliced and diced the numbers and have our usual Top 25 lists for natural gas and oil wells. We’ve included a couple of charts summarizing the data, showing the total production by driller (gas and oil) and the total production for the quarter by county. You’re gonna love it! ASCENT RESOURCES | ENCINO ENERGY | ENERGY COMPANIES | EOG RESOURCES | GULFPORT ENERGY | INDUSTRYWIDE ISSUES | OHIO | RESEARCH | SOUTHWESTERN ENERGY | STATEWIDE OH | UTICA RESOURCE OPERATING

"Holy Trinity of Hydrocarbons:” Ohio Oil Production on the Rise - The Ohio Department of Natural Resources recently published 2023 third quarter data showing oil production in the Buckeye State shattering records. Between July 1 and September 30, 2023, Ohio producers pumped out 6,527,247 barrels of oil – dramatically outpacing third quarter 2022 production by 32 percent and adding more than 1.6 million new barrels to the supply chain. In Columbiana County, one of the state’s fastest growing production areas, oil production levels skyrocketed from its previous record. Last quarter, the county’s 138 wells produced 352,354 barrels of oil. Compared to its previous feat of 233,390 barrels produced in the first quarter of this year, the county has upped production by a whopping 51 percent. Speaking to the Youngstown Business Journal, Jackie Stewart of Encino Energy applauded the victory and pointed out the industry’s continued additive benefits to the local economy: “For the Mahoning Valley, this is particularly encouraging news, as we source our production casing for our wells in Youngstown and rely on hundreds of local supply chain businesses each and every day to make it happen.” Similarly, in Guernsey County, oil production dramatically increased to 2,239,736 barrels over the 87-day period, compared to 1,576,209 during the same time last year. Harrison County also showed oil production levels increased slightly from 1,214,475 in 2022 to 1,219,869 barrels this quarter.Ohio’s skyrocketing oil production levels represents an exciting renewed trend and understanding for Ohio and the Utica Shale: not only does the state offer plentiful natural gas and natural gas liquids, but it is ripe for oil extraction and value. Rob Brundrett, the president of the Ohio Oil & Gas Association, emphasized Ohio’s “holy trinity of hydrocarbons” when speaking at the Hart Energy DUG Appalachia conference:“We’ve got oil, natural gas, natural gas liquids and crude oil. So we have them all right here in the Utica and the state of Ohio.”This is a fact of which operators are taking notice. Earlier this year, EOG Resources announced its new investment in Ohio’s hydrocarbons stating that the “Ohio Utica Combo play improves quality of premium inventory.” Ezra Yacob, chairman and CEO of EOG Resources said:“When you take the blinders off and you come with a different perspective from different basins, it’s amazing the things that you can uncover…”To supplement Ohio’s burgeoning oil play, natural gas production levels remained steady at over 547,039,311 thousand cubic feet (Mcf). Guernsey County also continued increasing natural gas production: in the third quarter of 2023, it produced 18,186,400 Mcf, up from 16,066,977 Mcf in 2022, while Harrison County produced 71,306,952 Mcf of natural gas.OOGA’s Brundrett highlighted how Ohio producers have found a way to “crack that code” of the Utica and predicted more investment coming to the state:“I think we’ve all learned a ton over the last decade on how best to drill and how best to finish these wells to get the … maximum for your investment…We’ve found a way to kind of crack that code and really maybe extract the maximum benefits that we can from the ground in Ohio, which is really, really exciting. And we’re probably going to see, obviously, a lot more investment in Ohio based on these results.” Since the beginning of the Shale Revolution, investment from oil and natural gas has brought in over $100 billion to the state – critical money that helps boost economic development in the state. Brundrett emphasized:“I can’t again overstate the importance of that kind of infrastructure and that kind of investment in really one of the poorest regions in our state.”Bottom line: Traditionally thought of as a natural gas state, Ohio is making big moves and becoming a sought-after oil play. Record production levels show that the Utica has much to offer: oil, natural gas and natural gas liquids – all of which are critical to modern life and society while helping to boost Ohio’s economic outlook.

Marcellus Shale Coalition Analyzes PA DEP Enviro Justice Policy - On August 17, the Pennsylvania Dept. of Environmental Protection (DEP) posted an Interim Final Environmental Justice Policy to guide DEP’s permit application reviews and outreach efforts in environmental justice areas throughout the Commonwealth (see PA DEP Issues Interim “Final” Shale-Drilling-is-Racist Regulation). New Environmental Justice (or EJ) policies are a euphemism for regulations that prohibit drilling and pipelines built in neighborhoods of color or economic hardship zones because, says the left, those people can’t fight them. It is a uniquely dystopian and prejudiced view of the world. We call it “all shale drilling is racist” regulations. Completely repugnant. But the Shapiro DEP forged ahead with implementing these new policies and a new website tool aimed at helping to identify EJ regions.

From Fracked Gas in Pennsylvania to Toxic Waste in Texas, Tracking Vinyl Chloride Production in the U.S. --- In February, officials released more than a million pounds of vinyl chloride into the environment in a controlled vent and burn, after five cars carrying 115,580 gallons of the hazardous chemical derailed. Two thousand residents were evacuated, and some have since experienced health issues they blame on the vinyl chloride burn. East Palestine and Cromby are not unique: they’re just two examples in a long parade of vinyl chloride rail accidents that have struck communities across the United States without warning for decades, in Arkansas, Michigan,Louisiana, Illinois, Texas, Kentucky, Mississippi, and Paulsboro, New Jersey, on a track that the East Palestine train would have followed had it continued across Pennsylvania from Ohio, and which involved one of the same companies, OxyVinyls. The story of the vinyl chloride on the East Palestine train–where it came from, how it was made, where it was going, and what kinds of products it would have eventually become–is a window into America’s vast plastics-making infrastructure, a system that stretches from gas fields in Appalachia to railyards in the Midwest to Gulf Coast petrochemical hubs to factories in the densely populated Northeast, encompassing thousands of miles of rail lines and pipelines as well as gas wells, storage facilities and plants. Because the ethane needed to make vinyl chloride is a byproduct of natural gas, it’s also an illustration of the side effects of the 21st-century fracking boom. Fueled by abundant shale gas, the sprawling networks that made both the East Palestine disaster and the incident in Cromby possible are growing. “Plastic production is increasing not because consumers want more plastic,” said Judith Enck, the president of Beyond Plastics, an advocacy group working to end plastic pollution. “It’s because there’s a glut of fracked gas.” When the gas industry and its champions talk about fracking, especially in politically contentious places like Pennsylvania, they tend to bring up its necessity as a source for essential heating and fuel. “Pennsylvania-produced natural gas essential to national security,” read the headline on an American Petroleum Institute press release in 2022. But in a world attempting to decarbonize its energy supply, plastics manufacturing has become increasingly important to companies eager to continue to profit from natural gas extraction. “It’s all very much connected to natural gas. It’s one of the reasons why PVC is so cheap to manufacture in the United States, because of the fracking explosion that we’ve seen over the last 20 or so years in places like Pennsylvania,” said Mike Schade, the director of the Mind the Store program at Toxic-Free Future, a nonprofit focused on combating chemical pollution. A 2021 Beyond Plastics report on plastics and climate change reported that the plastics industry “consumes more than 1.5 billion tons of fracked gases annually.” “We’ve seen the industry essentially have to invent new uses for gas, and that’s happening now,” said Eric de Place, an expert consultant on energy policy and fossil fuels. Whether it’s fertilizer, “blue” hydrogen or plastic, de Place said, “they’re just scrambling after whatever those new markets might be in order to find some justification to keep drilling and making money.” Overall, the total amount of oil and gas used for the production of plastics is around 15-20 percent, depending on what and how you count, said Sean O’Leary, senior researcher in energy and petrochemicals at the Ohio River Valley Institute, noting that more natural gas goes into power generation for plastics manufacturing than is used as feedstock. “Still, because demand for power from natural gas and oil is stagnating globally while demand for plastics has continued to rise, natural gas producers see plastics as an important market for the future,” he said.

IFO: PA NatGas Production, Wells Spud Both Decreased in 3Q | Marcellus Drilling News - Yesterday, the Pennsylvania Independent Fiscal Office (IFO) released its latest quarterly Natural Gas Production Report for July through September 2023 (full copy below). There were 102 new horizontal wells spud (drilled) in 3Q23, a huge decrease of 56 wells (-35%) compared to 3Q22. However, 3Q’s spud number was up nicely from the 89 drilled in 2Q23. Natural gas production volume was 1,870 billion cubic feet (Bcf) in 3Q23, down 10 Bcf (-0.5%) from 1,880 Bcf produced in 3Q22.

Letter to the editor: Stop fracking in Murrysville parks | TribLIVE.com - Our family, especially our toddlers, love the parks in Murrysville. We’ve spent countless hours on the playgrounds at Murrysville Community Park and hiking through Duff Park. Which is why it was alarming to hear of our council’s plan to lease oil/gas rights there. Even though fracking happens below the surface, there are documented impacts. Look at Deer Lakes Park, which had a similar fracking arrangement. The lakes were contaminated with chemicals associated with fracking, leading to the ban of future fracking at all Allegheny County parks. It is especially concerning that the two well pads (Titan and Poseidon) that will be used already have 72 on-site violations. Allowing them to drill into our parks will only lead to more violations and possible contamination. A Pitt study has shown there are health risks, especially to children, when exposed to nearby fracking activity. Our kids and citizens should trust that they can enjoy our parks and not be exposed to dangerous chemicals. There are other ways to raise money that don’t put our natural resources or our children’s health at risk. The final vote happens when the council meets at 7 p.m. Dec. 6. Stop fracking in our parks by attending and voicing your concerns. You can also sign https://rb.gy/i6180v asking council to vote to deny any leases for fracking on or under Murrysville parks. - Meredith Juchniewicz

Letter to the editor: Fracking doesn't belong in parks | TribLIVE.com --Even young children can understand the conservation principle known as leave no trace. When you visit nature, whether it’s the Appalachian Trail or your local park, you change nothing about it, leave nothing behind and remove only trash. This helps preserve natural spaces so that everyone can enjoy them long into the future. Murrysville Council either has not grasped this simple concept, or thinks there’s some special exception when it comes to Murrysville parks. They’re moving forward with their plans to lease Duff Park and Murrysville Community Park for fracking. Multiple citizens have warned them about how this will affect the parks, and in particular the water, as fracking has already done in Deer Lakes Park in Allegheny County. These concerns are backed by research, but so far the council has not listened.We wouldn’t tolerate logging or mining in any park. Why should we treat fracking any differently? Can we really put a price on the natural integrity and beauty of the parks? The people of Murrysville should make it clear to the council that our parks are not for sale. --Jason Plank

Fracking and cancer | LTE - Williamsport Sun-Gazette In response to the editorial written by representatives of the Heartland Institute that appeared in the Sun-Gazette on Oct. 27 claiming no connection between the oil and gas industry and cancer, I offer the following: 28,021 tons of benzene are emitted per year by the industry. Reputable organizations, including the EPA, classify benzene as a known human carcinogen. Exposure to benzene is linked to higher risks of cancer, particularly several forms of leukemia, as well as multiple myeloma and non-Hodgkin’s lymphoma. A report from the Clean Air Task Force indicates that almost 25% of Pennsylvanians live within the half-mile threat radius around industry operations. The Clean Air Task Force’s Threat Map shows that 4,237 people in Lycoming County live within half a mile of active wells, compressors and processors. The map indicates those within the threat radius have “cause for concern” over potential health impacts. The harms associated with fracking – including asthma, other respiratory diseases, heart problems, mental health problems, and cancer – have been well documented. In what many call a growing crisis, infants, children, pregnant women, and the elderly are proving especially vulnerable to the industry’s harms. And yet, the Shapiro administration and legislators who could make a difference merely double down on the false insistence that the industry is safe. So does fracking harm public health? Download the Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking [www.psr.org], a compilation of 2,303 peer-reviewed studies, over 90% of which show harm. The Compendium shows “no evidence that fracking can be practiced in a manner that does not threaten human health directly or without imperiling climate stability upon which human health depends.” But don’t take my word for it. Read the evidence, and decide for yourself. - Karen Elias, Lock Haven

How the Threat of Fracking Is Returning to New York -- This fall, a few thousand families in the Southern Tier region of New York began receiving peculiar letters in the mail. A company called Southern Tier Solutions (STS) was inviting them to lease their land for a new project. It beckoned residents to join the company’s efforts to become a “sustainable energy pioneer and a major contributor to the fight against climate change.”That may sound enticing to any environmentally inclined reader, except for one major detail — STS is planning to frackfor gas. Plus, it’s using the climate scam carbon capture and storage to greenwash its proposal and secure hefty taxpayer subsidies. In 2014, New York passed its landmark ban on fracking. Since its inception, New York’s ban has protected residents from the dire health effects of fracking. In other states, the fracking boom has contaminated water supplies and spewed noxious air pollution. It has driven illnesses, including cancer, and worsened our climate crisis.So how does STS claim to work around New York’s ban? By using carbon dioxide instead of water to extract the gas. Essentially, CO₂ fracking. And that’s where carbon capture and storage comes in.STS has several plans for getting its hands on carbon dioxide. First, it wants to ship it north from carbon capture plants on the Gulf Coast. Later, it plans to build several gas power plants, which will emit CO₂ that STS can capture and inject underground to extract more gas. Eventually, the company envisions building and running direct air capture plants, to suck CO₂ directly from the sky. STS claims that its use of captured carbon makes its bizarre scheme climate-friendly. By its logic, the emissions from fracking, transporting, and burning gas cancel out once it shoves some CO₂ underground, where it may or may not remain. But what if instead of trying to clean up their messes, corporations just didn’t make a mess in the first place? We know we will save time, resources, money, and the climate by ending fossil fuels and transitioning fully to renewables and battery storage.Not only is STS’s logic faulty; so is its expensive technology. As we have shown in our research, carbon capture has proven to fail, again and again. And because it’s so resource and energy-intensive, U.S. carbon capture projects have actually put moreCO₂ into the atmosphere than they’ve removed. To make matters worse, most captured carbon is used just as STS has proposed — to drill for more oil and gas. Ultimately, carbon capture maintains and reinforces the status quo of drilling and burning fossil fuels, as well as their massive pollution and climate impacts.At the same time, renewables keep getting cheaper and batteries keep getting better. Which begs the question — why is STS even pursuing carbon capture in the first place?

Is proposal to store CO2 in Southern Tier gas wells New York’s clean energy future, or just another gas bubble? - The promoter of a multi-billion-dollar plan to drill thousands of gas wells in the Southern Tier to store CO2 and extract methane insists his business partners and financial backers must remain anonymous.“I can’t go into that with you. That is a third rail at the moment,” Bryce Phillips told WaterFront. Phillips, a 56-year-old Texan, sounded more open about his professional team in a pre-taped radio interview aired Tuesday on Albany-based WCNY’s Capitol Pressroom program. When asked to describe his backers, he told the radio audience, that his company was owned by CO2 To Clean Energy Solutions “out of Wyoming.” But Phillips later explained to WaterFront that his corporate parent, a limited liability company with that exact name, does not have a website and is not currently active in Wyoming “in any visible way.” Phillips is president of Southern Tier CO2 to Clean Energy Solutions LLC, which does have a website. Southern Tier Solutions has made a splash in the region by mailing information packages to 6,500 landowners in Broome, Tioga and Chemung counties inviting them to lease their property for intense energy development.Phillips said today that he has scheduled a catered open house on Saturday, Dec. 16, from noon to 4 p.m. at the Binghamton Club at 83 Front St. in Binghamton.In response to questions from their constituents about the unsolicited offers, state Sen. Lea Webb (D-Binghamton) and Assemblymember Donna Lupardo (D-Endwell) held a press conference and wrote the state Department of Environmental Conservation with questions of their own.“We’re talking about carbon capture facilities, we’re talking about thousands of new gas wells, we’re talking about pipeline infrastructure, and with everything this community has been though with the Marcellus and Utica shale, we obviously have some questions,” Lupardo said.Phillips said he’s met with staffers for Webb and Lupardo but not with those or any other elected state officials. Neither has he made a concerted effort to win over state and federal regulators.Instead his energies have been focused on convincing landowners to sign leases that allow his company to drill wells on their land for a flat $10 and the prospect of future payouts from CO2 storage and methane extraction.Those payments would flow, he says, once the company achieves its vision of drilling thousands of wells linked by a series of CO2 and methane pipelines. The pipelines would connect to ten new 300-megawatt gas-fired power plants and several direct air capture (DAC) facilities, which would minimize or eliminate the plants’ greenhouse gas emissions. Phillips’ anonymous team figures the entire project would cost well over $10 billion and take decades to develop. He argues that it would help the state meet the goals of its 2019 climate law by providing “the electrical backbone for the state of New York” without spiking greenhouse gas emissions. Southern Tier Solutions’ pitch to New York landowners comes as the Biden Administration is pouring billions into carbon storage initiatives. “Removing legacy carbon pollution from the air through direct air capture and safely storing it is an essential weapon against the climate crisis,” U.S. Secretary of Energy Jennifer Granholm said last year in announcing a $3.4 billion program to support new DAC hubs. Meanwhile, Wyoming Gov. Mark Gordon is touting carbon storage as a way to address climate change without harming his state’s fossil fuel industry. Wyoming generates 71 percent of its power by burning coal, a major source of CO2 emissions. Phillips concedes that his New York project is extraordinarily ambitious, a moonshot that might flop. “There is no way unless you have widespread community support and support from local and state governments, and also the federal government, that this will ever work,” Phillips told WCNY listeners. “We’re really looking at (leasing) a minimum of about 100,000 acres. We’d like to see that in the works by March or April.” “We need blocks of between 30,000 and 50,000 acres,” he added. “Ultimately, we’d like to see a million (acres).” If those initial leasing goals are met, the company would begin drilling test wells to inject ‘supercritical’ CO2 (a quasi-liquid) into the Marcellus and Utica shale formations. In theory, the shale will absorb (and store) the CO2, forcing out marketable methane.

Mountain Valley Pipeline Owner Explores Options Including Sale - Bloomberg

Pipeline operator has market capitalization of over $4 billion
Equitrans was spun out of natural gas firm EQT Corp. in 2018

December 1, 2023 at 10:31 AM EST Updated on December 1, 2023 at 12:47 PM EST Save Equitrans Midstream Corp. is in the early stages of exploring a potential sale, people familiar with the matter said, potentially adding to a flurry of pipeline deals in North America. The operator of natural gas pipelines across the country, including the controversial Mountain Valley Pipeline project, is working with an adviser as it weighs a range of strategic options, according to the people. Equitrans would likely attract interest from industry peers should it opt to launch a sales process in early 2024, the people said.

Equitrans in early stages of discussing asset sale - Oil and gas pipeline firm Equitrans Midstream Corp. is in the early stages of considering a sale, Bloomberg News and Reuters reports. The operator of natural gas pipelines across the USA, including the Mountain Valley Pipeline project, is working with an adviser as it weighs a range of strategic options, according to reports. Equitrans would likely attract interest from industry peers should it opt to launch a sales process in early 2024. Equitrans owns a 48.1% ownership interest in the Mountain Valley pipeline and will operate it once it is online – which is expected to be in the first quarter of 2024. When the company started construction in February 2018, Equitrans estimated the 2.0 billion ft3/d project would cost about US$3.5 billion and enter service by late 2018. Now, the project stands to cost nearly US$7.2 billion, having faced numerous legal challenges and labour issues. Bloomberg, citing Citi analyst Spiro Dounis, highlighted that with the pipeline close to being complete, exploring a potential sale would make sense. Equitrans was spun out of the natural gas firm EQT Corp. in 2018, The pipeline operator has a market capitalisation of US$4 billion.

Ongoing Resistance to the Mountain Valley Pipeline – KPFA --First up, we checked back in with folks involved in the struggle to block the Mountain Valley Pipeline, a 303 mile so-called natural gas pipeline proposed to bring fracked gas from the Marcellus and Utica shale formations across parts of West Virginia and Virginia with an extension into North Carolina. Since a chat with activists we had in July, there have been nearly weekly actions to block the expansion of the pipeline across waterways and carsed terraine, endangering water tables and ecosystems around central Appalachia. For the hour we talk about this proposed project, the damage that’s been done and continues to be spread, the increasing belligerence of the men employed in the destruction and the ramping up legal repression facing activists and community members.You can learn more by checking out StopMVP.org or follow the social media accounts AppalachiansAgainstPipelines or POWHR. Support of the movement can also be offered up at Appalachian Legal Support Fund. To learn more about the funders of the MVP, check this out. Check out our past interviews about the MVP here.

US November LNG exports approach record levels amid higher output U.S. liquefied natural gas (LNG) exports in November rose to the second highest monthly production level on record, 7.99 million metric tons of the super chilled gas, according to tanker tracking data. The U.S. was the world’s largest exporter of LNG in the first half of this year, according to the Energy Information Agency (EIA), ahead of Qatar and Australia. New export plants expected to begin production next year will cement its status as top exporter, analysts have said. November’s volumes were just shy of April’s record 8.01 million tons and abovethe 7.92 million tons shipped in October, according to trade flows and tanker tracking data published by financial firm LSEG. U.S. LNG producers continued to focus exports on Europe as winter begins in the northern hemisphere, with greater shipments delivered to customers in that region. In November, about 68%of all U.S. LNG was exported to Europe, an increase from October’s 65%, the data showed. Lower than normal temperatures in Europe are unlikely to drive higher prices as storage levels remain elevated, according to analysts at consultants Rystad Energy. European gas storage was about 97% full at month’s end, it reported. “This will drive up heating demand, but is unlikely to reverse the current bearish demand outlook, given soft industrial activity and healthy renewable energy output in the region”, Rystad said in a note to clients. U.S. gas futures this week averaged $2.78 per million British thermal units (mmBtu) at the U.S. Henry Hub, $13.54 per mmBtu at the Dutch Title Transfer Facility hub and $16.33 per mmBtu at the Japan Korea Marker in Asia. Fewer U.S. cargoes headed to Asia last month. Exports to that region fell to 18.5% of the total from 20% in October, while shipments to Latin America remained almost unchanged at about 5% of total, LSEG data showed. Natural gas flows to the seven big U.S. LNG export plants rose to a record 14.3 billion cubic feet per day (bcfd) in November, up from 13.7 bcfd in October and the prior all-time high of 14.0 bcfd in April, according to LSEG data. Gas flows to U.S. liquefaction plants remain at record-high levels with a 30-day average utilization rate running close to 106% of nameplate capacity, said Rystad Energy.

DT Midstream Readies Second Phase of Haynesville System Expansion for January Service -- DT Midstream Inc. (DTM) said it has finished building the 400 MMcf/d second-phase expansion of its Louisiana Energy Access Project, or LEAP, and expects the new capacity to be available for firm service on Jan. 1. The Detroit-based company on Wednesday announced “early mechanical completion” of the expansion that would boost capacity of the 150-mile, 36-inch diameter pipeline by 70% to 1.7 Bcf/d. LEAP carries Haynesville Shale supply in Louisiana to the Gulf Coast for industrial use and LNG exports. The Jan. 1 start of firm service is in line with an initial schedule set in 2022 as well as an update on the company’s third-quarter earnings call. In November, CEO David Slater said the Phase 1 expansion “has been running flat out” since it went into service in August,...

US weekly LNG exports reach 24 cargoes - US liquefaction plants shipped 24 liquefied natural gas (LNG) cargoes in the week ending November 29, while natural gas deliveries to these terminals dropped by 0.6 percent compared to the week before. The EIA said in its weekly report, citing shipping data provided by Bloomberg Finance, that the total capacity of these 24 LNG vessels is 91 Bcf. The agency did not release its weekly report in the prior week due to to holidays. During the week of November 9-15, US terminals shipped 27 LNG cargoes. Average natural gas deliveries to US LNG export terminals during the week November 23-29 decreased by 0.1 Bcf/d compared to the prior week, averaging 14.3 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 1.5 percent (0.1 Bcf/d) to 8.7 Bcf/d, while natural gas deliveries to terminals in South Texas increased by 1.7 percent (0.1 Bcf/d) The agency said that natural gas deliveries to terminals outside the Gulf Coast decreased by 2.2 percent (less than 0.1 Bcf/d). Cheniere’s Sabine Pass plant shipped nine LNG cargoes and the company’s Corpus Christi facility sent three shipments during the week under review. The Freeport LNG terminal and Venture Global’s Calcasieu Pass each shipped four cargoes, while Sempra Infrastructure’s Cameron LNG terminal dispatched three LNG cargoes. Also, the Cove Point plant sent one cargo during the week. The Elba Island LNG terminal did no ship cargoes during the week under review.

Construction progress continues on Golden Pass LNG export plant - Energy giants QatarEnergy and ExxonMobil released the latest construction update for their Golden Pass liquefied natural gas (LNG) export terminal on the US Gulf Coast near Sabine Pass, Texas. State-owned QatarEnergy owns a 70 percent stake in the Golden Pass project with a capacity of more than 18 mtpa and will offtake 70 percent of the capacity, while US energy firm ExxonMobil has a 30 percent share. A joint venture of Chiyoda, McDermott, and Zachry is building the tree Golden Pass trains worth about $10 billion next to the existing LNG import terminal.Golden Pass LNG Terminal and Golden Pass Pipeline said in the newest construction report filed with the US FERC that Golden Pass is continuing to carry out Phase I and Phase II activities, such as storm water protection, levee construction, stockpiling of material, and piling. Golden Pass and its contractors progressed installation of piping and steel in process and utilities areas, continued piping and vessels insulation activities and helical piles and piping installation for the ground flares, while concrete foundation pours continued in Train 2 and Train 3. In addition, Golden Pass progressed setting various vessels on respective foundations and progressed brownfield tie-ins in Trains 2 and 3, and progressed brownfield tie-ins and LNG tank tops modifications scope. Golden Pass also progressed cable tray installations and cable pulling activities and continued pipe pneumatic / hydrostatic testing program. Construction progress continues on Golden Pass LNG export plantGround flares (Image: Golden Pass LNG)As per the pipeline expansion project, Golden Pass continued civil activities and concrete foundation pours at milepost MP33 and MP69 compressor stations and also continued pipe fabrication and installation at these stations. It also continued construction activities of the Sabine Spur, Natural Gas Pipeline (NGPL)Interconnect improvements, and associated facilities. Regarding the start of operations, the FERC said in an inspection report in October that the anticipated in-service timing for the first Golden Pass train is the second half of 2024, with the second and the third train following after. The anticipated in-service timing for the pipeline expansion project is expected sometime prior to the second half of 2024, it said.

Magnolia LNG Latest to File for New Export Authorization After DOE Policy Shift -Magnolia LNG LLC has filed for a new authorization to export the super-chilled fuel from its proposed facility in Louisiana, the second U.S. project to do so since U.S. regulators said in April they wouldn’t issue extensions to start operations in most cases. The Glenfarne Energy Transition LLC affiliate withdrew its request on Nov. 29 for a five-year extension to start service and begin exporting to non-Free Trade Agreement (FTA) countries. It filed a new application with the U.S. Department of Energy the same day, requesting authorization to export gas to non-FTA countries until Dec. 31, 2050. The company has also requested that the DOE expedite its application. Earlier this year, the DOE issued a policy statement reaffirming its expectations that liquefied natural gas...seven-year deadline for authorization holders to commence exports of domestically produced natural gas, including liquefied natural gas (LNG), to non-free trade agreement (non-FTA) countries ...

Venture Global CEO Criticizes Shell, BP as Dispute With LNG Offtakers Continues - Venture Global LNG Inc. CEO Michael Sabel said some of the company’s long-term offtakers are attempting to undermine the new exporter’s competitive edge in pointed comments published Tuesday by the Financial Times. Sabel’s comments are some of his strongest yet in what’s become a very public dispute with offtakers that have accused the company of failing to deliver contracted liquefied natural gas. Sabel told the Financial Times that Venture Global is a “catastrophe” and “competitive threat” for the companies alleging contract violations. LNG market heavyweights and supermajors BP plc and Shell plc have joined Repsol SA and Edison SpA in arbitration proceedings against the Gulf Coast exporter.

Chesapeake Working to Diversify LNG Supply Deals, Gain Price Exposure in Asia, Europe - While Chesapeake Energy Corp. works to finalize its natural gas supply deals with LNG buyers, management says it’s narrowing down opportunities to link more of its Haynesville and Marcellus shale supply to international benchmarks in the months to come. Chesapeake currently has tentative agreements with liquefied natural gas traders that could link up to 3 million metric tons/year (mmty) worth of feed gas supply to international indexes. Chesapeake’s Justin Brady, LNG and commercial operations director, told NGI the company is looking to capitalize further on that momentum and potentially place as much as an additional 4 mmty under supply agreements in the short-term.

‘Stronger Desire’ by Customers to Lock in Long-Term LNG Contracts, Says ExxonMobil CEO - Natural gas demand has not slowed, and that’s helping to grease the skids for export contracts, ExxonMobil CEO Darren Woods said Wednesday. During a webcast to discuss capital spending and projected plans, Woods was asked about the company’s opportunities in the global LNG export market. The integrated major is a partner in several big gas projects. Has it become more difficult to secure LNG customers with the plethora of competing projects in the queue?

US natgas prices drops 5% on mild weather view, record output (Reuters) - U.S. natural gas futures fell more than 5% on Monday on record output and forecasts for mild weather that should limit heating demand. Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange traded 14.2 cents lower, or 5.1%, to $2.67 per million British thermal units at 11:00 a.m. EST (1600 GMT), after hitting a two-month low earlier in the session. "If we don't see cold weather in December or January, the chance of prices getting to $3 is limited. For us to see higher prices, storage surplus have to come down, which comes with colder weather." With U.S. natural gas production at record highs and ample amounts of fuel in storage, the futures market was sending signals that some traders have already given up hope of extreme price spikes this winter. Analysts said the mild weather and record output should allow utilities to pull less gas than usual from storage than normal in coming weeks. They forecast U.S. gas stockpiles would end up about 7.2% over normal for this time of year in the week ended Dec. 1. EIA/GAS Financial firm LSEG said average gas output in the Lower 48 U.S. states jumped to a record 108.4 billion cubic feet per day (bcfd) in November, up from the prior all-time high of 104.8 bcfd in October. LSEG forecast that U.S. gas demand in the Lower 48, including exports, would drop from 129.9 bcfd last week to 122.6 bcfd this week before rising to 125.3 bcfd with the coming of seasonally cooler weather next week. U.S. energy firms this week added oil and natural gas rigs for a third week in a row, energy services firm Baker Hughes BKR.O said in its closely followed report on Friday. "On the supply side, new record production would appear to lie ahead as well efficiencies improve and the rig counts sustain a leveling trend following steady declines into last summer," said analysts at energy advisory Ritterbusch and Associates in a note. The U.S. is on track to become the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar. Much higher global prices have fed demand for U.S. exports due in part to supply disruptions and sanctions linked to the war in Ukraine. Gas was trading around $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $16.25 at the Japan Korea Marker (JKM) in Asia

US natgas drops 5% to near 3-month low as oil prices collapse (Reuters) - U.S. natural gas futures fell by about 5% on Wednesday to the lowest in nearly three months, pressured by a drop in oil prices, near-record U.S. gas output and forecasts for mostly mild weather through late December that should dent heating demand. Analysts forecast U.S. gas stockpiles were about 7.2% above normal levels for this time of year. Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange fell 12.9 cents, or 4.8%, to $2.581 per million British thermal units (mmBtu) at 12:04 p.m. EST (1704 GMT), on track for its lowest close since Sept. 7. Oil prices dropped about 4% on a big rise in U.S. gasoline inventories. O/R The futures market has been sending signals for weeks that many traders do not expect price spikes this winter (November-March) due to record production and ample amounts of gas in storage. Many in the market think futures for this heating season peaked in November. The biggest sign the market has given up on higher prices during this winter was the collapse of the premium of March 2024 futures over April 2024 NGH24-J24 to a record low of just one cent per mmBtu. The industry calls the March-April spread the "widow maker" because rapid price moves on changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006. Power and gas prices often soar when it turns cold in New England, where pipeline constraints limit the amount of gas that can reach region. Most of it is used to heat homes and businesses, so power plants must switch to more expensive fuels like oil and liquefied natural gas (LNG). In 2022, about 54% of power generated in New England came from gas-fired plants with the rest coming from nuclear (27%), hydro (7%), other (5%), wind (4%), oil (2%) and solar (1%). Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 107.5 billion cubic feet per day (bcfd) so far in December from a record 107.8 bcfd in November. Daily output was on track to drop by 2.1 bcfd over the past three days to a preliminary four-week low of 106.2 bcfd on Wednesday. Preliminary data is often revised later in the day. Meteorologists projected the weather would turn from warmer-than-normal Dec. 6-12 to near-normal from Dec. 13-16, then back to warmer-than-normal from Dec. 17-21. With colder weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 121.8 bcfd this week to 126.2 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.4 bcfd so far in December, up from a record 14.3 bcfd in November.

US natgas slides to 3-month low on mild weather, Golden Pass LNG delay (Reuters) - U.S. natural gas futures slid about 2% to a three-month low on Thursday on forecasts for milder weather and lower heating demand as investors worried liquefied natural gas (LNG) exports would not grow much in 2024. On Wednesday, Exxon delayed expected LNG production at its 2.4-billion cubic feet per day (bcfd) Golden Pass export plant under construction in Texas to the first half of 2025 from the second half of 2024. Traders said that delay helped sink futures prices by about 5% on Wednesday because it would reduce demand and leave more gas in the U.S., forcing producers to cut production or inject more gas into storage or both. U.S. Energy Information Administration (EIA) data showed a massive 117 billion cubic feet (bcf) withdrawal from storage during the week ended Dec. 1, bigger than the 106-bcf decline analysts forecast in a Reuters poll and exceeding a withdrawal of 30 bcf in the same week last year and a five-year (2018-2022) average decline of 48 bcf. Analysts said last week's withdrawal was bigger than usual because cold weather boosted heating demand. Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange fell 4.4 cents, or 1.7%, to $2.525 per million British thermal units (mmBtu) at 11:04 a.m. EST (1604 GMT). For the second straight day, it was on track for its lowest close since Sept. 6 and also in oversold territory with a Relative Strength Index (RSI) below 30. With record production levels and ample storage, the gas futures market has been sending bearish signals for weeks that futures prices for this winter (November-March) had likely already peaked in November. One of the biggest signs the market has given up on winter price spikes was the collapse of the premium of futures for March over April NGH24-J24 to a record low of just one cent per mmBtu. March is the last month of the winter storage withdrawal season and April is the first month of the summer storage injection season. Traders have noted that gas demand peaks during the winter heating season and therefore summer prices should not trade above winter. Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 107.3 bcfd so far in December from a record 107.8 bcfd in November. Daily output was on track to drop by 2.2 bcfd over the past four days to a preliminary one-month low of 106.0 bcfd on Thursday. Meteorologists projected the weather would turn from warmer-than-normal from Dec. 7-10 to near-normal from Dec. 11-14 and then back to warmer-than-normal from Dec. 15-22.

MPSC approve Enbridge’s tunnel for oil pipeline | World Pipelines - Michigan regulators on Friday 1 December, 2023, approved Canadian pipeline company Enbridge Inc's application to build a tunnel under the Great Lakes to house its aging Line 5 oil pipeline, a major step forward for the US$750 million project, reported Reuters. Enbridge is planning to replace a section of the pipeline, which runs underwater for 4 miles (6.4 km) through the Straits of Mackinac between Lakes Michigan and Huron, to address concerns Line 5 could leak. The Michigan Public Service Commission (MPSC) approved Enbridge's siting application, finding there was a public need to protect the Great Lakes from the risk of an oil spill while also keeping the pipeline operating. "There are no feasible and prudent alternatives to the replacement project pursuant to the Michigan Environmental Protection Act (MEPA)," the MPSC said in a decision posted on its website. Calgary-based Enbridge still requires federal permits from the US Army Corps of Engineers and construction is not expected to start before 2026. The company first submitted an application to build the tunnel in 2020 to address concerns Line 5 could leak. The 70 year old pipeline carries 540 000 bpd from Superior, Wisconsin, to Sarnia, Ontario, and is at the centre of a long-running legal dispute between Enbridge and the state of Michigan, which says it should be shut down. "With the MPSC’s decision, the Michigan agencies involved in the permitting process have given the go ahead for this critical project," Enbridge spokesperson Ryan Duffy said in a statement. The decision was criticised by some environmental groups opposed to the project, who say it is not necessary to keep Line 5 running in a world aiming to transition away from fossil fuels to cleaner sources of energy.

Michigan regulators approve $500M pipeline tunnel project under channel linking 2 Great Lakes - Michigan officials approved a $500 million plan Friday to encase in a protective tunnel a portion of an oil pipeline that runs beneath a channel connecting two Great Lakes, leaving just one more regulatory hurdle for the contentious project. The state's three-person Public Service Commission approved the project in the Straits of Mackinac on a 2-0 vote. Commissioner Alessandra Carreon abstained, noting she just joined the commission four months ago. The commission's chairperson, Dan Scripps, said that an oil spill in the straits, which link Lake Michigan to Lake Huron, would be catastrophic. The tunnel is the best way to mitigate the risk as the state transitions to renewable energy sources, he said. The plan still needs approval from the U.S. Army Corps of Engineers, which is still compiling an environmental impact statement. A final decision may not come until 2026. Enbridge Energy has been operating the Line 5 pipeline since 1953. The pipeline moves up to 23 million gallons of crude oil and natural gas liquids daily between Superior, Wisconsin, and Sarnia, Ohio. A 4-mile portion of the pipeline crosses the bottom of the Straits of Mackinac. After an Enbridge pipeline leaked about 21,000 gallons of crude oil into a Kalamazoo River tributary in southern Michigan in 2010, the state formed a task force to review petroleum pipelines across the state, including Line 5. Enbridge officials revealed in 2017 that engineers had known about gaps in Line 5's protective coating in the straits since 2014. That section of pipeline was also damaged by a boat anchor in 2018, raising concerns about a spill. Later that year, then-Republican Gov. Rick Snyder's administration reached an agreement with Enbridge calling for the company to build a tunnel 60 to 375 feet beneath the lakebed to house a new section of Line 5 and shut down the existing segment at a cost of $500 million. Current Gov. Gretchen Whitmer, a Democrat, has said she opposes the continued operation of Line 5 under the straits — even with the new tunnel — agreeing with Indigenous tribes, environmentalists and tourist businesses that it is at risk of causing a devastating spill.

‘Another notch in a long history of ignoring the rights of Tribal Nations’ | Michigan Tribe Condemns Line 5 Permit - Today, the Bay Mills Indian Community released a statement condemning a decision by the Michigan Public Service Commission (MPSC) approving a permit for the Canadian oil giant Enbridge to replace the disastrous Line 5 dual oil pipelines under the Great Lakes. Line 5 is a 645-mile pipeline that transports up to 23 million gallons of crude oil and natural gas liquids daily from western to eastern Canada, cutting across the treaty-reserved territory of tribal nations in Wisconsin and Michigan. The section that runs through the Straits of Mackinac, a waterway connecting Lake Michigan and Lake Huron, diverges into two 20-inch diameter steel pipes, posing a risk to the public. The Michigan’s Attorney General is currently suing Enbridge to shut it down. The Bay Mills Indian Community, a Tribal Nation in Michigan’s Upper Peninsula that has relied on the Straits since time immemorial has fought to prevent this outcome in a contested case before the MPCS. Safety experts warn that the project could lead to a massive explosion and an oil spill in the Great Lakes, which holds 84 percent of North America’s surface freshwater. "Instead of complying with a Governor's public safety order to decommission Line 5 in Michigan, individuals working at a state agency granted Enbridge a permit for a project for which they hold no property rights and no safety track record in good standing,” Bay Mills President Whitney Grvelle said in a statement. “Today’s decision is another notch in a long history of ignoring the rights of Tribal Nations. We must act now to protect the peoples of the Great Lakes from an oil spill, to lead our communities out of the fossil fuel era, and to preserve the shared lands and waters in Michigan for all of us." The Bay Mills Indian Community is also currently challenging a separate permit for the project. In addition, Bay Mills is advocating with the US Army Corps of Engineers, which is expected to release a draft federal review of the project’s environmental impacts in the spring of 2025. "Protecting the Great Lakes from the threat of Line 5 has been our priority for a number of years," said attorney Rebecca Liebing, in-house counsel for Bay Mills Indian Community, in a statement. "We are more resolved than ever to retire this outdated and dangerous oil pipeline."

Contaminated soil removed October BP gas pipeline break Girard — Containers of contaminated soil have been removed following the BP petroleum pipeline break site on Bell Road Oct. 17. Michigan Department of Environment, Great Lakes, and Energy spokesperson Jill Greenberg said, “BP contractors removed the bulk of impacted soil and installed a set of temporary groundwater monitoring wells.” In the last six weeks, contractors using backhoes removed soil from around the line break, which spilled 8,400 gallons of gasoline. Over two dozen covered dumpsters that filled a wooden pad were trucked to a licensed Ohio burn facility to clean the soil. Greenberg said, “While soil and groundwater samples were collected, final confirmation soil samples and groundwater samples have not yet been received by EGLE. These samples will likely guide the long-term direction and continued work at the site.” Most of the contractors have left the 70-acre farm. A 30-by-50-foot area opened for repair is now closed, surrounded by an orange snow fence. The Pipeline and Hazardous Materials Safety Administration is investigating the break. The ruptured section of the 80-year-old 10-inch metal line was sent to an independent testing laboratory. PHMSA said, “The investigation is ongoing, and the third-party metallurgical analysis has not been issued yet.” The break area is near Vincent, Round, and Fox Lakes along Hog Creek, a wetland area. The break was on the west side of Bell Road, across from the Potawatomi Campground, which had closed for the season. Officials evacuated the half dozen homes in the area for several days until the immediate danger from the gasoline abated. Less than two weeks after the break, PHMSA allowed the repaired line to reopen, supplying three million gallons of gasoline, jet fuel, and diesel daily between the BP Whiting, Indiana refinery and a River Rouge terminal.

US Coast Guard responds to oil spill in Gulf of Mexico (Reuters) - The U.S. Coast Guard said on Wednesday it was responding to an oil discharge near the Main Pass Oil Gathering (MPOG) Co's pipeline system in the Gulf of Mexico, while the main pipeline and several surrounding ones remained shut in. "The reported sheen is being investigated and has not been confirmed to be associated with the November 16 observed initial discharge," the Coast Guard said. The Coast Guard had not yet identified any damage or indication of a leak after surveying the entire length of the pipeline along with 22.16 miles (36 km) of surrounding pipelines. Remote-controlled devices and divers continued to reassess the pipelines. About 3% of the Gulf of Mexico's daily oil production remained shut in after a million-gallon oil spill, the Coast Guard said last week. The pipeline was closed by Third Coast's MPOG on Nov. 16 after crude oil was spotted around 19 miles (30 km) offshore the Mississippi River delta, near Plaquemines Parish, southeast of New Orleans. The main pipeline and several surrounding lines remain shut in and have not been put back into service, the Coast Guard said while leading efforts to mitigate impacts from the spill.

Talos Energy sees 'immaterial' impact in fourth quarter from Gulf of Mexico oil spill (Reuters) - U.S. oil and gas producer Talos Energy said on Thursday it expects the impact related to the Main Pass Oil Gathering pipeline shut-in following an oil spill to be immaterial to its fourth-quarter results. The oil spill was first observed on Nov. 16 around 19 miles (30 km) offshore the Mississippi River delta, shutting in around 89 miles of underwater pipelines and around 3% of the Gulf of Mexico's daily crude oil output. Talos said it anticipates first production for its Venice and Lime Rock wells ahead of schedule by the end of this year. The company also reaffirmed its fourth-quarter production forecast in the range of 66,500-68,5000 barrels of oil equivalent per day.

Chevron Raises 2024 Spending, Anchored by U.S. Projects in Permian and Gulf of Mexico - The United States is set to capture two-thirds of Chevron Corp.’s upstream capital in the coming year, with most of the budget designed to expand infrastructure, drill longer laterals and increase well completions. Total capital expenditures (capex) are set at $18.5-19.5 billion, up 11% year/year. The double-digit capex plan is geared in part to two big mergers this year: the $53 billion takeover of Hess Corp., and a $6.3 billion deal for Denver-Julesburg Basin heavyweight PDC Energy Inc. “We’re maintaining capital discipline in both traditional and new energies,” CEO Mike Wirth said. “These investments are expected to underpin durable free cash flow growth to support our objective of returning more cash to shareholders.” The PDC transaction, accounted for in...

Fracking earthquakes a devil’s bargain Texas doesn’t need - As if Texas didn’t already have enough disasters — floods, fires, tornadoes, explosions — it has added a new kind to the list. At around 4:30 a.m. on Nov. 8, Texas recorded the fourth-largest earthquake in the state’s history, a 5.3 magnitude event. Thankfully it was miles south of Mentone, a West Texas town with a census count of 10 souls. The tremors, however, rippled all the way to central New Mexico. The relevance of this particular earthquake wasn’t its relatively high magnitude or its minimal damage. It’s that it happened in the middle of the Permian Basin, the nation’s largest oil field. That’s no coincidence. Temblors in Texas have risen sharply over the past decade, and research has linked the increased seismic activity to fracking. After oil and gas are pumped from production wells, they’re separated from the groundwater that comes up with them. That water is toxic, so it’s typically injected back into the porous rock formations. That creates fluid pressure on ancient fault lines. Eventually that pressure builds to the point that the fault lines slip, causing earthquakes. Oil and gas producers have made a devil's bargain with Texas' geography. They print money by extracting oil and gas from this desolate yet bountiful region — the Permian generated roughly $182 billion in gross domestic product this year. In turn, they drastically alter our underground geology, leading to earthquakes, sinkholes and even permanent saltwater lakes created from briny, contaminated water. The Texas Railroad Commission, the state agency tasked with oversight of the oil and gas industry, mostly neglects its responsibilities. Will they step up this time? The railroad commission and county officials established a plan a year ago: After a quake of 4.5 or higher, the commission would prohibit operators from injecting wastewater underground for up to two years. ... The Houston Chronicle's Amanda Drane reported that up to 600,000 barrels a day of injection capacity could be lost if the commission imposes this rule, which of course would impact the bottom lines of many oil and gas operators, as well as the economic wellbeing of many West Texas boomtowns. Consider that the housekeepers at two "man camps" for oil field workers north of Mentone get paid $45,000, along with free room and board and a full benefits package. The railroad commission said it was working with operators to limit injection wells where the earthquake happened, though the agency did not specifically say whether it would enforce its own rule. Following through should be the minimum. Temporarily shutting down injection wells while hoping that others don't trip up fault lines is a shortsighted, whack-a-mole strategy. What the commission needs is a regulatory system that accounts for Texas' geographic limitations. We're not holding our breath. The railroad commissioners are so chummy with the industry that they rake in campaign donations from oil and gas companies, while also trading oil and gas stocks and owning mineral interests. Ideally, to decide where operators are allowed to drill, the commission would use the plethora of data that show which parts of the Permian Basin have problematic seismic activity. It would enforce responsible water management and spur investment in facilities and pipelines that recycle the produced water used for drilling. It would limit operators from blasting produced water back underground or discharging it in our rivers, creeks and streams. That level of planning would be good for business, giving operators the ability to invest and drill accordingly. It would also protect Texas' natural environment and mitigate the risk to property and people. It's the sort of commonsense policy that we wish we could expect of that commission all the time.

Bakken, Permian Take Spotlight in Quarterly Federal Oil, Natural Gas Auctions - The U.S. Bureau of Land Management’s (BLM) recent round of fourth quarter oil and natural gas lease sales drew less industry interest than prior sales, but more producers picked up acreage in North Dakota’s Bakken Shale and the New Mexico portion of the Permian Basin. The lease sales in New Mexico netted more than $22.3 million for six parcels in Eddy and Lea counties, in the heart of the Permian’s Delaware sub-basin. More than 150 bids were placed for the 430 acres offered, with the highest bid topping $16 million for 120 acres in Eddy County. Eddy and Lea counties accounted for 28% of all Permian natural gas production in 1Q2023, according to the U.S. Energy Information Administration (EIA). Associated natural gas production from the counties has nearly doubled over...

New Mexico governor proposes $500M to treat fracking wastewater - — New Mexico would underwrite development of a strategic new source of water by buying treated water that originates from the used, salty byproducts of oil and natural gas drilling, and help preserve its freshwater aquifers in the process, under a proposal from the state’s Democratic governor.The initiative from Gov. Michelle Lujan Grisham, announced Tuesday from theinternational climate conference at Dubai in the United Arab Emirates, would set water purification standards and purchase treated water that originates from oil fields as well as the state’s vast natural underground reservoirs of brine. It requires legislative approval. The idea is to create a government-guaranteed market for the commodity — treated water — and attract private enterprise to build desalinization and treatment facilities, securing new sources of water for industrial applications. The administration hopes to make the water available to businesses ranging from microchip manufacturers to hydrogen fuel producers that separate the element from water in an energy-intensive process.Lujan Grisham said she’ll ask the Legislature to set aside $500 million to underwrite acquisition of treated water. The arrangement would harness the state’s bonding authority and financial reserves held in its multibillion-dollar Severance Tax Permanent Fund. The trust, founded in the 1970s, is sustained by taxes on the extraction of oil, natural gas and other minerals from state land.“We’re going to turn water — this waste, which is a problem — into a commodity,” Lujan Grisham said at the conference. “We give a fixed, long-term, (let’s) say 30-year contract to any number of companies that can provide the technology to identify that water, to clean that water up, and to use it in chip manufacturing, solar manufacturing.”She said the goal is avoid a reckoning on fresh-water supplies as the Rio Grande and underground fresh-water aquifers recede. The state also has extensive underground reservoirs of salty water that have been of limited use.That brackish water is a crucial component in hydraulic fracturing, or fracking, and advanced drilling techniques that have helped turn New Mexico into the No. 2 oil production state in the U.S. The state’s oil wells draw out far more water than oil, by several multiples, according to oil field regulators.

House GOP Would Have Taxpayers Pay for Cleanup When Fracking Boom Goes Bust – A house committee is considering legislation introduced by Colorado Republican Rep. Lauren Boebert that could leave taxpayers on the hook for up to $17.7 billion in costs associated with cleaning up oil and gas wells abandoned on public lands by fracking companies and other polluters, according to a new report from the watchdog group Public Citizen. Oil and gas industry lobbyists and their allies on Capitol Hill are working to defeat a Biden administration proposal that would strengthen federal requirements designed to force fossil fuel companies to plug wells and clean up drilling sites on federal lands after extraction. Boebert’s bill would direct the federal Bureau of Land Management (BLM) to withdraw its proposal, and the House Natural Resources Committee considered the bill for markup on Wednesday. “The boom-and-bust nature of the oil and gas industry puts taxpayers at higher risk for well cleanup because, when prices fall for oil and gas, bad actors have an economic incentive to just walk away from their wells, leaving taxpayers in the lurch,” Alan Zibel, a Public Citizen research director, said in a statement. The BLM manages vast swaths of land in the Western U.S. and a leasing program that allows fossil fuel companies to extract oil and gas from more than 89,000 wells across 23.7 million acres. Public Citizen reports that the industry has for decades exploited loose federal rules for drilling on public lands while the government charges “woefully inadequate royalties” to compensate the public for extraction. The industry then exports the oil and gas overseas or sells it back to U.S. consumers. President Joe Biden pledged on the campaign trail that his administration would not offer new leases allowing fossil fuel extraction to expand on public lands, but the president instead signed legislation hiking royalties for fossil fuel leases and directed federal regulators to develop tougher rules to reduce pollution and ensure that taxpayers don’t get stuck paying for cleanup after fracking booms go bust.Under federal rules, fossil fuel companies are required to post a bond in order to obtain a lease for drilling on federal land. If an oil and gas company abandons an exploration site, goes bankrupt, or fails to “plug” a well securely to prevent pollution from leaking out, the posted bond covers the government’s cost of cleaning up the drilling site. If the company cleans up after extraction, then the bond is returned. Using three different estimates for the average cost of plugging oil and gas wells and cleaning up an extraction site ranging from $35,000 on the low end to $200,000, Public Citizen estimates that abandoned wells on federal public lands could cost taxpayers $2.9 billion to $17.7 billion. These figures include the current required bond payment of $2,122 per well, which the Biden administration is pushing to increase.Boebert said small oil and gas companies are upset about new costs of doing business on public land. Large fossil fuel corporations can easily absorb the costs and often support Biden-era regulations to save face during the climate crisis and gain a competitive advantage over smaller competitors.“These increases will impact smaller producers who can’t operate in the market,” Boebert said on Wednesday.Smaller oil and gas extractors in particular are notorious for abandoning “orphaned wells” and declaring bankruptcy when oil and gas prices drop or wells simply go dry. In Louisiana, where the oil and gas industry has been around for a century, more than 4,600 wells abandoned years ago have become the cash-strapped state’s responsibility and are known to pose a danger to children and the public while leaking pollution into sensitive ecosystems.Western states, such as Texas, New Mexico and Boebert’s home state of Colorado are currently experiencing a massive fracking boom and will likely face the same problem years down the line. There are currently more than 81,000 documented orphaned wells nationwide,according to the Environmental Defense Fund. Inactive and abandoned wells are often left to rust and are capable of releasing more climate-warming emissions into the atmosphere than active wells.

Standing Rock’s fight against DAPL far from over - – Doug Crow Ghost, Hunkpapa Lakota, opens a large binder labeled “Volume II: Dakota Access Pipeline Lake Oahe Crossing Project Draft Environmental Impact Statement.” The binder is supposed to contain instructions for the tribe should there be a leak in the Dakota Access Pipeline. Instead, the entire page is redacted, replaced with a massive black square. “So, this is what we do if there’s a leak,” said Crow Ghost, water administrator for the Standing Rock Sioux Tribe, holding the binder open to two entirely redacted pages. A public forum held November 1 and November 2 in Bismarck was meant to be an opportunity for concerned citizens and tribal officials to provide feedback on the draft Environmental Impact Statement (EIS). The EIS outlines five options for the future of the pipeline. Options include denying the easement that allows for the Cannon Ball, N.D.; crossing, abandoning or removing the segment; granting the easement with no changes or additional safety measures; or rerouting the pipeline north of Bismarck. The Bismarck format of the public forum upset many in attendance. Many, including Standing Rock officials, expected a public hearing-style forum. Instead, the forum was a one-on-one meeting with a stenographer present to write down concerns. There was also an opportunity for individuals to write comments. Standing Rock tribal leaders said several tribal leaders, citizens and general community members were unable to enter the building where the forum was held. Tribal officials said Bismarck law enforcement asked for identification from anyone attempting to enter. A sign posted outside on November 2 said meeting by invitation only, no media allowed. Standing Rock Chairwoman Janet Alkire called for the draft review to be invalidated and the pipeline shutdown. Alkire voiced concerns over online comments made not being fully considered. A press release from the tribe called the forum undemocratic. “The quietly announced sessions initially excluded key tribal participants. Would-be speakers were also asked to submit written comments or were siloed with a stenographer rather than being heard in a truly public forum,” the press release said.

Dangerous proximity of ships, pipeline led to California oil spill - A federal agency wants changes in how container ships are anchored off Southern California as well as new safety measures for vessels near offshore pipelines to help prevent or minimize ruptures like the one that spilled 25,000 gallons of crude oil off Huntington Beach. The 2021 spill caused damage to beaches and wetlands and killed scores of fish and birds.

Surging U.S. Oil Production Brings Down Prices and Raises Climate Fears - American oil fields are gushing again, helping to drive down fuel prices but also threatening to undercut efforts to reduce greenhouse gas emissions. Only three years after U.S. oil production collapsed during the pandemic, energy companies are cranking out a record 13.2 million barrels a day, more than Russia or Saudi Arabia. The flow of oil has grown by roughly 800,000 barrels a day since early 2022, and analysts expect the industry to add another 500,000 barrels a day next year.The main driver of the production surge is a delayed response to the Russian invasion of Ukraine in February 2022, which sent the price of oil to well over $100 a barrel for the first time in nearly a decade. The wells that were drilled last year are now in full swing.With the surge in output, gasoline prices have fallen by close to $2 a gallon since the summer of 2022 and are back to levels that prevailed in 2021. The increase in production has also provided the Biden administration with substantial leverage in its dealings with oil-exporting foes like Russia, Venezuela and Iran while reducing its need to cajole more friendly countries like Saudi Arabia to temper prices.But the comeback in U.S. oil production poses big risks, too. More supply and lower prices could increase demand for fossil fuels when world leaders, who are meeting in Dubai, United Arab Emirates, are straining to reach agreements that would accelerate the fight against climate change. Scientists generally agree that the world is far from achieving the goals necessary to avoid the catastrophic effects of global warming, which is caused mainly by the burning of fossil fuels like oil, natural gas and coal.“We’re achieving energy security and reducing inflation by leveraging high-emitting, carbon-intensive oil production,” said Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University. “We’re going to need to address that conflict.”The United States now exports roughly four million barrels a day, more than any member of the Organization of the Petroleum Exporting Countries except Saudi Arabia. On balance, the United States still imports more than it exports because domestic demand exceeds supply and many American refineries can more easily refine the heavier oil produced in Canada and Latin America than the lighter crude that oozes out of the shale fields of New Mexico, North Dakota and Texas.Nearly every extra barrel of American crude produced is being exported, mostly to Europe and Asia, where supplies are tight. In addition, the natural gas that often bubbles up with oil has led to record exports of gas and helped to lower prices for that fuel and for electricity, much of which is produced at gas-fired power plants in the United States.

Growing U.S. Oil Exports Put Lasting Pressure on Prices - Until 2015, U.S. crude oil producers were prohibited from exporting oil without a special license. In 2015, this changed. Since then, the U.S. has become a top-five exporter. This has been positive for supply security and consumers by keeping a lid on prices. It has not, however, been positive for OPEC, especially recently, as the cartel struggles to reverse the latest price decline. What's more, U.S. exports continue to grow, expected to have hit yet another record last week. And WTI just fell below $70 per barrel on Thursday, meaning U.S. oil will remain attractive for importers in the observable future. And now there's talk about an actual oil glut. Cargo-tracking data from Kpler and Vortexa has suggested U.S. crude oil exports hit a record of nearly 6 million barrels daily last week. The two put the export rate at 5.7 million bpd. Per a Bloomberg report, Macquarie data goes even higher, seeing U.S. oil exports at 5.9 million bpd. Neither of these figures was confirmed by the Energy Information Administration in its latest weekly report, which put crude oil exports from the U.S. at 4.3 million bpd for the week to December 1, down from 4.75 million bpd a week earlier. The four-week average export rate, according to the EIA, stood at 4.69 million bpd.Despite the substantial discrepancy between export estimates, the fact remains that the U.S. is now a major exporter. And reports of rising exports have added fuel to emerging worries about a potential oversupply, even as OPEC prepares to remove even more oil from the market.Bloomberg noted in its report that the increase in exports has resulted from record-breaking production, which surprised many industry observers amid drillers' new focus on capital discipline and returning cash to shareholders. Somehow, however, they managed to ramp up production despite these.The outlet also noted that there is now talk of oversupply well into 2024. That might come as a surprise to commodity analysts who seem to expect higher oil prices next year. Goldman Sachs, for instance, said in late November it expected Brent crude to range between $70 and $100, noting that "the price of oil in 2024 will depend heavily on OPEC" and non-OPEC producers outside the U.S. It's strange that Goldman has missed the new shale boom and the record exports. ING has also focused on OPEC in its commodities outlook for 2024, highlighting the cartel's central role in oil price formation next year. In fact, ING forecast a modest deficit on oil markets in the first half of 2024.Indeed, Bloomberg points out that the estimated surge of U.S. oil shipments abroad in the last week of November could be seasonal. Producers are looking to get rid of as many barrels as they can as the end of the year and tax season approaches. The effect on prices remains the same, however, whatever the motivation behind the higher shipments—if the cargo trackers are right and not the EIA.In addition to the bearish news from cargo tracking service providers, Saudi Arabia reduced its oil prices for Asian buyers for January. While it did not reduce them as much as expected, the market read the reduction as a sign of despair—even as Bloomberg reported that disappointed buyers were looking for cheaper alternatives.

Alberta Sees Double-Digit Growth in Oil, Natural Gas Investments This Year - Alberta, Canada’s top hydrocarbon producing province, has seen strong investment in both oil and natural gas projects, which is leading to a strong revenue boost in 2023. “Prospects for the energy sector remain positive, underpinned by solid energy prices and the anticipated increase in Alberta’s takeaway capacity,” according to Alberta’s recent fiscal update. “Energy prices are anticipated to remain supportive of activity,” the researchers said. “Producers are also expected to continue drilling at a solid pace.” Producers, however, are still expected to maintain capital discipline in expanding production and would continue to invest in emissions reduction initiatives. Conventional oil production hit a five-year high in September. Natural gas output and...

Canada Oil, Gas Capital Spending Up at $7.85B in Q3 -- Canada’s oil and gas extraction industries deployed CAD 10.6 billion ($7.85 billion) in capital during the third quarter (Q3), up 1.68 percent from the prior three-month period and 12.76 percent from the same quarter last year, official data has shown. Total capital expenses for the oil and gas extraction industries for the first three quarters of 2023 rose 20 percent year-on-year, Statistics Canada recently reported. Oil and gas extraction capital expenditure in the country has consistently increased since 2021 as oil and gas prices rebounded from a decrease during the coronavirus pandemic. In the eight years from 2015 to 2022, capex for this sector peaked 2015 at CAD 31.61 billion ($23.41 billion) and fell to its lowest at CAD 14.16 billion ($10.49 billion) in 2020, a year into the pandemic, according to a database on the government agency’s website. In the oil province of Alberta in 2022 total capex for the sectors of oil and gas, oil sands and emerging resources climbed 44 percent to CAD 26.6 billion ($19.7 billion) compared to 2021, according to the Alberta Energy Regulator. “After the price recovery from the pandemic in 2021, global energy prices continued to rise significantly in 2022, leading to a more favorable investment environment”, the regulators says in a report on its website. Alberta expects investment in the oil and gas extraction industries to grow 18 percent or by over CAD 4.5 billion ($3.33 billion) in 2023, with moderate growths for 2024 and 2025, according to a fiscal statement by the provincial government November 30. “Energy prices are anticipated to remain supportive of activity”, said the statement on the provincial government’s website. “Producers are also expected to continue drilling at a solid pace ahead of TMX [Trans Mountain expansion pipeline] coming online in the second half of 2024”. However, nationally, refined petroleum products dropped 25.4 percent quarter-over-quarter in the July–September period. This drove the 0.3 percent quarter-on-quarter decline in real gross domestic product, according to a bulletin update by Statistics Canada. Nonetheless, Alberta’s “[i]ncomes for the non-financial sector in the third quarter were boosted by higher prices for crude oil and refined petroleum products”, the statistics agency stated. For the July–September 2023 quarter, among the country’s biggest oil and gas companies, Cenovus Inc. had reported CAD 1.03 billion ($762.82 million) in capex, up two percent against the prior quarter and 18 percent against the corresponding period a year ago. The capex “was primarily directed towards sustaining production in the Oil Sands segment, drilling, completion, tie-in, and infrastructure projects in the Conventional business as well as refining reliability initiatives in the U.S. Manufacturing segment”, the company said in its quarterly report November 2. Cenovus logged CAD 1.86 billion ($1.38 billion) in net profit and CAD 17.31 billion ($12.82 billion) in revenue, according to the company’s quarterly report November 2. Imperial Oil Ltd. posted CAD 387 million ($286.61 million) in capex for the third quarter of 2023, down 21.5 percent against the prior quarter and five percent compared to the corresponding quarter 2022. Upstream accounted for most of its latest quarterly capex. Imperial Oil recorded CAD 1.6 billion ($1.18 billion) in net income and CAD 13.92 billion ($10.31 billion) in revenue, according to its earnings announcement October 27. Suncor Energy Inc. meanwhile had CAD 1.51 billion ($1.12 billion) in capex for the third quarter of 2023, down 2.51 percent from the prior quarter but up 13.17 percent from the corresponding quarter 2022. It attributed its third quarter 2023 expenses primarily to “a share-based compensation expense in the current quarter compared to a recovery in the prior year quarter, increased operating expenses associated with the company’s additional working interest in Fort Hills that was acquired in the first quarter of 2023, and increased mining activity at the company’s mines”, as stated in its quarterly report November 8.

Mexico Pacific Nears Sold-Out Capacity for Saguaro LNG with Woodside SPA - Woodside is further diversifying its LNG portfolio with more U.S.-sourced gas from a new supply agreement with Mexico Pacific Ltd. (MPL), tallying another major offtaker for the proposed Mexican terminal. Woodside has inked a 20-year, 1.3 million metric ton/year (mmty) sales and purchase agreement (SPA) for offtake from the Saguaro Energia LNG terminal on a free-on-board basis. Prices are to be linked to U.S. indexes. MPL President and Chief Commercial Officer Sarah Bairstow said Woodside’s addition as a foundational offtaker for Saguaro’s third train further validates “the value of West Coast Mexican LNG.

Mexico Pacific LNG Project Could Have Positive Impacts on Overall Natural Gas Market - Column - In the last decade, monumental infrastructure projects in Mexico have changed the landscape of the natural gas industry. The Ramones system bringing in U.S. gas was designed by Petróleos Mexicanos (Pemex) to solve the problem of critical alerts in central Mexico. As soon as its operation began, this system, which operated in coordination with the national pipeline system, became the main gas injection point throughout the country. Its 2 Bcf/d of transport capacity provided security of supply at the same time that Pemex’s production fell dramatically.

Essequibo: Venezuelans approve takeover of oil-rich region of Guyana in referendum — Venezuelans voted by a wide margin Sunday to approve the takeover of an oil-rich region in neighboring Guyana – the latest escalation in a long-running territorial dispute between the two countries, fueled by the recent discovery of vast offshore energy resources. The area in question, the densely forested Essequibo region, amounts to about two-thirds of Guyana’s national territory and is roughly the size of Florida. Sunday’s largely symbolic referendum asked voters if they agreed with creating a Venezuelan state in the Essequibo region, providing its population with Venezuelan citizenship and “incorporating that state into the map of Venezuelan territory.” In a news conference announcing preliminary results from the first tranche of counted votes, the Venezuelan National Electoral Council said voters chose “yes” more than 95% of the time on each of five questions on the ballot. It is unclear what steps Venezuela’s government would take to enforce its claim, however. Venezuela has long claimed the land, which it argues was within its borders during the Spanish colonial period. It dismisses an 1899 ruling by international arbitrators that set the current boundaries when Guyana was still a British colony, and Venezuelan President Nicolas Maduro has cast the referendum in anti-imperialist sentiment on social media. Guyana has called the move a step towards annexation and an “existential threat.” Last week, Guyanese President Irfaan Ali visited troops in Essequibo and dramatically hoisted a Guyanese flag on a mountain overlooking the border with Venezuela. The International Court of Justice, based in The Hague, ruled before the vote that “Venezuela shall refrain from taking any action which would modify the situation that currently prevails in the territory in dispute.” It plans to hold a trial in the spring on the issue, following years of review and decades of failed negotiations. Venezuela does not recognize the court’s jurisdiction on the issue, however. What happens next The vote’s result was widely expected within Venezuela, although its practical implications are likely to be minimal, analysts say, with the creation of a Venezuelan state within the Essequibo a remote possibility. It’s unclear what steps the Venezuelan government would take to follow through on the result, and any attempt to assert a claim would certainly be met with international resistance. Still, the escalating rhetoric has prompted troop movements in the region and saber-rattling in both countries, drawing comparisons from Guyanese leaders to the Russian invasion of Ukraine. Many residents in the predominantly indigenous region are reportedly on edge.

Brazil gears up to become fourth largest oil producer - Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP) reports that the country’s oil production is steadily increasing, projecting the country to become the world’s fourth largest oil producer, informs OilPrice. The country’s large reserves, particularly pre-salt reserves, coupled with a rise in exploration and drilling activities, underscore the potential for significant production expansion. Despite concerns over government intervention and taxation, foreign energy companies like TotalEnergies and Equinor continue to invest heavily in Brazil, signalling the country’s strong position in the global oil industry. Data from Brazil’s hydrocarbon regulator, the National Agency of Petroleum, Natural Gas and Biofuels (ANP – Portuguese initials), shows that for April 2023, the country pumped an average of 3.1 million barrels of oil per day. That number is almost 1% higher than a month earlier and 5% greater year over year. Total hydrocarbon output for April 2023 amounted to just over 4 million barrels of oil equivalent per day which was 1.1% higher month over month and 4.4% greater than a year earlier. That growth indicates Brazil possesses the potential to become the world’s largest oil producer, especially when it is anticipated the country 2023 will add 300,000 barrels per day, taking production to 3.4 million barrels daily by the end of the year. During 2022, Brazil was ranked ninth globally by oil production, ahead of Kuwait and behind Iran, lifting an average of just over 3 million barrels per day. Suppose Latin America’s largest economy is to become the world’s fourth-largest oil producer. Another key aspect that will support those plans is Brazil’s copious hydrocarbon reserves. According to the ANP, at the end of 2022, Latin America’s largest oil producer held proven or 1P petroleum reserves totaling 14.9 billion barrels, of which 77% were categorized as pre-salt. There are also 21.9 billion barrels of proven and possible or 2P reserves and 27 billion barrels of 3P reserves, known as proven possible and probable reserves. This illustrates that Brazil possesses considerable hydrocarbon potential and the reserves required to support a significant increase in oil production. Those reserves will keep growing as exploration and development drilling gains momentum, with the Baker Hughes International Rig Count showing 17 active rigs at the end of May 2023 compared to 11 a year earlier.

Brazil to join OPEC+ in 2024, seeks oil market stability: minister | S&P Global Commodity Insights --- Brazil will join the OPEC+ alliance from January 2024, in a move that adds South America's largest oil producer to the group's market influence, OPEC confirmed in a statement Nov. 30. "This is a historic moment for Brazil and the energy industry and we look forward to joining this distinguished group," Brazilian Minister of Mines and Energy Alexandre Silveira de Oliveira said in an speech to OPEC+ ministers during a virtual meeting on Nov. 30. "The OPEC+ agreement has effectively protected the stability of oil markets." Silveira didn't provide details on Brazil's membership, or whether it would participate in quotas. However, delegates earlier told S&P Global Commodity Insights that the country -- which produces mostly medium-sweet crude from its offshore basins -- isn't expected to participate in cuts. "Brazil benefits significantly from the stability of oil and energy markets," Silveira said in reference to the role played by OPEC+. The addition of Brazil to the 10 existing OPEC+ allies led by Russia is a major coup for the cartel, which has struggled to reach consensus on cuts to arrest weak oil prices. Platts, part of S&P Global Commodity Insights, last assessed benchmark Dated Brent crude at $82.28/b on Nov. 29. Brazil currently produces around 3.2 million b/d of crude and is a major supplier to China, according to S&P Global data. In October, a high-level OPEC delegation led by Secretary General Haitham al-Ghais met with Silveira in Brasilia. Also in attendance was Jean Paul Prates, CEO of state-controlled oil giant Petrobras. The company committed earlier this month to increasing investment spending by 31% to $102 billion through to 2028. Under its latest plans, approved by the board of directors, Petrobras expects to pump 2.8 million b/d of oil equivalent in 2024 and 2025, gradually rising to 3.0 million boe/d in 2026 and 3.1 million boe/d in 2027. Oil and natural gas production will peak at 3.2 million boe/d in 2028.

LNG Imports Continue Flowing Into Europe at High Rates Despite Bearish Fundamentals - High inventories, a bearish demand outlook and forecasts of a mild winter have failed to limit European LNG imports. Although Kpler data shows the continent’s total liquefied natural gas intake year-to-date has fallen to 113.68 million tons (Mt) from 114.95 Mt, LNG is still expected to make up around 43% of the European Union’s total gas imports this year, up from 36% in 2022 and 26% in 2021, according to ING Research. Moreover, Kpler data that includes Turkey also show that Europe has steadily increased imports of the super-chilled fuel since the heating season started in October. The continent took in 10.27 Mt that month and 10.55 Mt in November. Energy Aspects’ James Waddell, head of European Gas and Global LNG, told NGI that unless there’s extreme cold, weak...

OMV Petrom and Vulcangas to build LNG, CNG stations in Romania - Romania’s energy firm OMV Petrom is teaming up with a unit of Italy’s Vulcangas to build liquefied and compressed natural gas filling stations in Romania. According to a statement by OMV Petrom, the firm and Vulcangas Romania entered into a partnership and plan to launch the first station in 2025 at a Petrom filling station located in Chitila Sat, Ilfov County. This station will supply light and heavy transportation vehicles. Also, other future filling stations will be installed depending on the evolution of LNG and CNG demand in Romania, it said. Radu Caprau, member of the OMV Petrom executive board, said that through this partnership, “we continue to diversify our mobility offer for medium and long-distance freight transport, by supporting the growth of the LNG and CNG market.” “Natural gas can be a viable option for the transition to cleaner transportation,” Caprau said. The company in which Austria’s OMV holds a 51.2 percent stake claims LNG/CNG freight transportation generates about 15 percent less CO2 emissions, 50 percent less SOx emissions and almost no heavy particulate emissions. A truck fueled by LNG/CNG can benefit from an autonomy of up to 1,600 kilometers, it said.

Net zero policy for new gas projects abandoned after industry objected | Australia news - The Northern Territory government walked away from a proposal to set net zero emissions requirements for new onshore gas developments after the industry objected, government documents show. Letters and emails released to Guardian Australia under freedom of information laws show the Fyles government quietly consulted the gas industry in late 2022 about a plan to meet the key climate recommendation from a scientific inquiry into fracking. Other key stakeholders and the public do not appear to have been consulted about the proposal. “It isn’t every day that we obtain this level of insight into the direct influence that the fossil fuel sector has on the climate policies of Australian governments,” said Harriet Kater, special adviser at the Australasian Centre for Corporate Responsibility. “Unfortunately, this has a strong sense of being the tip of the iceberg. “The unchecked influence of the fossil fuel sector on policymakers is a primary reason that emissions continue to rise on a trajectory that is catastrophic for human safety.” Communities in the NT are on the frontline of a proposed massive expansion of the gas industry. That expansion is advancing despite science and energy agencies, including the International Energy Agency, warning there can be no more exploitation of new oil, gas and coalfields if the world is to limit global heating to 1.5C. By the middle of the century, the number of days above 35C is projected to be at least double in many places across the territory. Research published this year projected Darwin could become too hot to live in within 50 years if the planet keeps warming at current rates. In May this year, the NT government gave the greenlight for companies to apply for approval to commence gas production in the Beetaloo basin between Katherine and Tennant Creek. The government said it was satisfied it had met a commitment to deliver on all 135 recommendations of a territory-wide scientific inquiry into fracking. That included the key climate commitment – recommendation 9.8 – that the NT and federal governments would “seek to ensure” that new onshore gas projects in the NT did not cause a net increase in Australia’s greenhouse gas emissions. Guardian Australia has previously revealed that the NT government knew it could not meet this recommendation and sought the federal government’s help in September 2022. New documents show that during that same month it was also contacting gas companies with a proposal to partially meet this commitment by regulating the upstream – or direct – emissions from production activities for gas projects. According to correspondence released by the NT environment department, the former environment and climate change minister Lauren Moss notified gas companies that the government had given “in-principle support to a policy approach that would require interest holders to achieve net zero greenhouse gas emissions for all upstream onshore shale gas production activities in the Territory”. Senior bureaucrats wrote to companies including Santos, Inpex, Empire Energy, Hancock Prospecting and Top End Energy, seeking their feedback on the idea by late October 2022 before a submission was put to cabinet. The companies raised strong objections. Empire Energy, one of the operators in the Beetaloo basin, wrote in an 18 October email to the department it had “numerous, serious concerns regarding the NT government’s proposed approach to implementation of recommendation 9.8”. Inpex, which operates a liquefied natural gas (LNG) processing facility on Darwin harbour, wrote in a 25 October letter to Moss about “a number of concerns”. These included that the policy could “increase cost and complexity for proponents, without necessarily achieving improved outcomes”, and that the NT government’s introduction of a specific net zero requirement for shale gas production might set a “potential precedent” that could be applied more broadly to other industries and activities. One email shows Santos executives met with senior NT bureaucrats to discuss the proposal on 28 October. Later, in a five-page letter dated 30 November, the company stated its “strong belief that the most effective and efficient way to Australia and the NT achieving their targets of net zero emissions by 2050 is to allow industry to find the best ways to decarbonise their businesses”.

The bill that could stop fracking at Beetaloo Basin -- For the uninitiated, the words “water trigger” might be associated with a garden hose attachment, or maybe a kid’s Super Soaker toy. But it’s actually a powerful weapon with which the federal government could avert environmental disaster. Should she choose to act on changes to environmental law forced on her by the Greens this week, Environment and Water Minister Tanya Plibersek could, for a start, put paid to plans to extract enormous quantities of gas from the Beetaloo Basin, a 28,000 square kilometre expanse of semi-arid land about 500 kilometres south-east of Darwin. And we mean enormous – far bigger than any current project on Western Australia’s North West Shelf. The bumf from the Northern Territory government says the basin’s gas reserves “are equivalent to more than 1000 times the current annual domestic consumption in Australia, or the amount of energy required to drive a car 483 million kilometres”. It also claims development of the Beetaloo would produce 17,000 jobs by 2040 and bring a $17 billion boost to the economy. There is one glaringly obvious problem. Exploiting those reserves also would pump massive amounts of greenhouse gases into the atmosphere. By the calculation of physicist and climate scientist Professor Bill Hare, chief executive of Climate Analytics, just getting the gas out of the ground and processing it in Darwin would produce up to 49 million tonnes of carbon dioxide-equivalent a year and increase Australia’s total domestic emissions by about 11 per cent. That is just half of the emissions. Once it is burnt, Hare calculates that emissions will be as much as 1.2 billion tonnes over 25 years. As readers by now will be well aware, the International Energy Agency warned in 2021 that if the world was to have any hope of reaching its goals of reaching net-zero emissions by 2050 and keeping the global temperature rise to 1.5 degrees, it had to immediately stop opening new fossil fuel projects. Mike Seccombe Labor has wrested support for its legislation to save the Murray–Darling Basin with concessions to the Greens and independent senators, but the plan’s heavy reliance on water buybacks will do little to appease farmers and state governments. But the territory government is pressing ahead and the former federal government allocated about $200 million in subsidies and infrastructure spending to accelerate development. At time of writing, the current federal government was still prevaricating over whether or not it would join the large and growing number of nations at the COP28 climate conference in Dubai advocating a phase-out of all fossil fuel extraction. Bottom line, Beetaloo and the various other planned major gas projects are being developed in defiance of the science that suggests they are a threat on a world scale. Moreover, the gas in the Beetaloo is hard to get at. It’s not as if there is a big underground void filled with gas that can be easily tapped. It is tightly bound in the rock, which necessitates mining by an unconventional method, called hydraulic fracturing, or fracking. This involves injecting liquid – primarily water, mixed with sand and chemicals – at high pressure into the gas-bearing strata, which opens up fissures in the rock for extracting the gas (or oil).

Japan Secures LNG Cargoes for Country’s First Strategic Natural Gas Reserve - Jera Co. Inc., Japan’s largest power producer, has secured three LNG cargoes to ensure winter demand is met through February 2024 in a purchase made as part of the government’s plan for a strategic reserve of the super-chilled fuel. Previously, only commercial stocks of liquefied natural gas were held in Japan. Now, like the country’s strategic oil reserves, the Ministry of Economy, Trade and Industry’s (METI) “Strategic LNG Buffer” would keep gas stocks in government-owned and private facilities. “This buffer plan is sensible,” said Poten & Partners’ Jason Feer, global head of business intelligence.

Asia spot LNG prices fall to 7-week low on tepid demand, improved supply -- Asian spot liquefied natural gas (LNG) prices fell this week to a 7-week low despite cold weather, as demand remains muted and global supply conditions ease after recent maintenance and geopolitical tensions. The average LNG price for January delivery into north-east Asia LNG-AS fell 6% to $15.7 per million British thermal units (mmBtu), the lowest since mid-October, industry sources estimated. “Rates in Asia and notably Europe continue to slide. Demand has remained weak across all players,” said Toby Copson, head of energy, APAC, at commodities broker Marex. “It’s clear weather and industrial demand hasn’t brought any urgent covering going in to winter which doesn’t set a good precedent for a bullish outlook,” Copson added. Samuel Good, head of LNG pricing at commodity pricing agency Argus said that despite low overnight temperatures, end-users across northeast Asia have largely stayed away from the spot market, relying instead on term supply or spot cargoes secured before winter, aided in part by daytime temperatures that have held closer to seasonal norms or even above them. Good added gas-fired generation is being squeezed out of the generation mix by an increase in nuclear output. Meanwhile, global supply is improving after the end of maintenance at a Qatargas plant and at Australia’s Prelude facility. This is in addition to the return of Egypt’s LNG exports after a halt in the immediate period following the outbreak of conflict in Gaza, according to Alex Froley, LNG analyst at data intelligence firm ICIS. “The boosts from Qatar, Egypt and Australia offer improved supply potential over coming weeks. That has helped pull near-term prices lower, despite the onset of colder weather in Europe that has increased the draw-down of underground storage reserves and helped use up the queue of floating storage cargoes that had earlier been building up around European shores,” Froley said. While European gas storage levels have started to fall, they are still at record highs for this time of the year, at around 95.9% full, reducing the risk of the region running short over winter as a whole, Froley added. Argus’ Good said the sendout from European LNG terminals into the grid has been quick, in response to the higher consumption being driven by the ongoing cold weather. “But cargo availability in the wider Atlantic basin remains high, with only a few firms facing an incentive to redirect loadings away from Europe and to northeast Asia instead,” Good said. S&P Global Commodity Insights assessed its daily northwest Europe LNG Marker (NWM) price benchmark for cargoes delivered in January on an ex-ship (DES) basis at $12.46/mmBtu on Nov. 30, a $0.87/mmBtu discount to the January gas price at the Dutch TTF hub. “Northwest Europe’s LNG prices were pressured over the week shedding almost 13%, or $1.828/mmBtu, since Nov. 23 to near 2 -month lows,” said Karim El Afany, managing editor of S&P’s Atlantic LNG. Argus assessed the price at $12.70/mmBtu, while Spark Commodities assessed it at $12.689/mmBtu.

Russian crude exports to India slump amid soaring freight costs, currency dispute --Russia’s crude oil exports to India collapsed to below 1 million b/d for the first time in 13 months during November, according to preliminary tanker tracking data, amid rising freight rates, tighter sanctions compliance and a reported dispute over rupee payments for Moscow’s crude from its biggest buyer. India overtook China to become Russia’s biggest buyer of seaborne crude last year with flows peaking at almost 2 million b/d in May as Indian refiners snapped up discounted Russian oil. However, Russia’s monthly exports to India have averaged just 892,000 b/d in November, a 47% slide on the month and down from an average of 1.53 million b/d this year, according to S&P Global Commodities at Sea. The sharply lower flows to India come amid shrinking discounts for Russian crude arriving at Indian ports as Russia sources more non-G7 shipping capacity to sidestep the G7’s $60/b price cap on its exports and as values for medium sour crudes continue to strengthen globally on the back of OPEC+ production cuts. Although Urals FOB values have weakened against Dated Brent recently, the discount for cargoes arriving on India’s west coast remains at $4.10/b, the tightest differential since Platts, part of S&P Global Commodity Insights, began evaluating the assessment in January. The lump sum value for 100,000 mt cargoes from both the Baltics and Black Sea bound for India has now jumped to between $8.7 million and $9.25 million, according to sources familiar with the subject. This compares with around $4.2 million for the same journey in early October. Speaking in October, the chairperson for Indian Oil Corp. said the state-run refining company is shifting to other crude sources to feed its refineries as the steep discounts for Russian crude available over the past year and half have dwindled. Freight costs initially increased on the back of a tight tonnage list and low availability of dirty tankers, and recent moves by the US and the UK to crack down on sanctions busting in the shipping sector and EU plans to tighten compliance rules for transporting crude have further raised freight costs, traders said. Some major tanker operators that need to comply with the G7 price cap regime have exited the Russian trade, with the West focus on tightening enforcement. Three top Greek tanker operators have stopped transporting Russian oil in recent weeks to avoid sanctions now being imposed on some shipping companies carrying Russian oil, Reuters reported Nov. 24, citing unnamed traders and data.

Russia pledges more oil data to ship trackers to soothe OPEC+ - The Hindu -Russia has pledged to disclose more data about the volume of its fuel refining and exports after OPEC+ asked Moscow for more transparency on classified fuel shipments from the many export points across the vast country, sources at OPEC+ and ship-tracking firms told Reuters. Russia is the only member of OPEC+ which contributes to export cuts rather than production cuts as part of its participation in the group's agreement to curb supplies. Market analysts have struggled to verify the exact volumes of cuts achieved by Moscow. Deputy Energy Minister Pavel Sorokin made the offer to provide more information last week in a call with six ship-tracking consultancies and price-reporting agencies tasked by OPEC+ to work with Moscow on the issue, three sources told Reuters. Mr. Sorokin told the firms - S&P Global Platts, Argus Media, Energy Intelligence, Wood Mackenzie, Rystad and Kpler – Moscow would provide more data on crude production, inventories and refinery fuel output to give a more comprehensive picture of its compliance, according to the sources, one of whom attended the meeting.

Proposed 5% biogas blending with natural gas can cut LNG imports worth USD 1.17 bn: IBA - The proposed 5 per cent blending of biogas with natural gas supplies in the country can cut LNG imports worth USD 1.17 billion annually, says a study by the Indian Biogas Association (IBA). The study comes against the backdrop of the government's recent mandate to blend one per cent biogas with piped natural gas (PNG) supplies in the country from April 1, 2025 under the compressed biogas blending obligation (CBO) scheme. The biogas blending is proposed to be further increased to 5 per cent by fiscal year 2028-29. According to the study, this blending initiative gels well with the government's macro-level move to make India a gas-based economy, with a target to increase the current share of gas in the energy mix from 6 per cent currently to 15 per cent by 2030. The IBA estimates show that 5 per cent blending of biogas with natural gas can reduce LNG imports worth USD 1.17 billion. This can also bring down per capita CO2 emissions by two per cent, benchmarked to the 2019 figure, which was 1.9 metric tonne of CO2 per person in India. Additionally, the body says preventing organic waste going to landfills can bring innumerable benefits.

CPCL Denies Leakage At Refinery In Chennai As Oil Spill Hits Waterlogged Areas After Cyclone Michaung -- The Chennai Petrochemicals Corporation Limited (CPCL) on Thursday denied claims floating around on social media that leaks in pipelines at its refinery in Chennai's Manali area are behind a crude oil spill in the city, which is reeling under waterlogging in the aftermath of Cyclone Michaung. The company also said it was investigating the oil spill. "There is no pipeline leak at CPCL Manali Refinery," the public sector undertaking (PSU) said in a statement issued via social media platform X (formerly Twitter). The clarification came after several social media users blamed CPCL following the emergence of videos that showed films of oil floating on the surface of flood water in Chennai's Ennore area.

Russia takes control of Iraq’s biggest oil discovery for 20 years - - Preliminary estimates suggested that Iraq’s Eridu oil field holds between 7-10 billion barrels of reserves. Senior Russian oil industry sources spoken to exclusively by OilPrice.com said the true figure may well be 50 percent more than the higher figure of that band. In either event, the Eridu field – part of Iraq’s Block 10 exploration and development region – is the biggest oil find in Iraq in the last 20 years, and Russia wants to control all of it, alongside its chief geopolitical ally, China. The approval last week by Iraq’s Oil Ministry for Inpex – the major oil company of key U.S. ally Japan – to sell its 40 percent stake in the Block 10 region that contains the huge Eridu discovery leaves the way clear for Lukoil to take total control of the entire oil-rich area. Block 10 lies in the southeast of Iraq, approximately 120 km west of the key oil export route from Basra, and just south of the huge oil fields in and around Nassirya. Back in 2021 – at least before the U.S. formally withdrew from Iraq by ending its ‘combat mission’ there at the end of December – it was clear that Washington knew what Russia and China were up to long term in the country, and how the U.S. was being manipulated by Iraq. In a moment of insight, the then-U.S. Deputy Assistant Secretary of Defense, Dana Stroul, said: “It’s […] clear that certain countries and partners would want to hedge and test what more they might be able to get from the United States by testing the waters of deeper co-operation with the Chinese or the Russians, particularly in the security and military space.” This view could equally have been aimed, not just at Iraq, but also at most other countries in the Middle East at that time – most notably Saudi Arabia, and the UAE. That said, this profound insight had no effect on Washington at that point, and posed no impediment at all to either Russia or China’s continued drive to entirely push the U.S. out of the Middle East, as analysed in depth in in my new book on the new global oil market order. Multiple field exploration and development deals, plus countless lower-profile ‘contract-only’ agreements, with Russian and Chinese firms allow the two countries plenty of scope to leverage these out into a harder geopolitical presence across the country, including into the very fabric of its key infrastructure. These plans, in turn, link into corollary plans by Russia and China to turn the entire southeast region of Iraq – that culminates with the major oil export hub of Basra – into a region criss-crossed by Russian- and Chinese-controlled oil and gas fields and transportation hubs.

Iraq announces additional oil output cut for Q1 2024 -Iraq will voluntarily cut oil production by 220,000 barrels per day (bpd) between January and March 2024, the country’s oil ministry said in a statement. The measure was taken in coordination with OPEC+ and its allies to stabilize the global oil market, it added. The ministry statement came hours after OPEC+ oil producers on Thursday agreed to voluntary output cuts of about 2 million bpd for early next year to bolster the market. On April 2, the ministry said Iraq would voluntarily cut oil production by 211,000 bpd from May until the end of this year. Oil prices rose after the outbreak of the Russia-Ukraine conflict in February last year, benefiting oil-exporting countries, including Iraq. However, oil prices declined in the past few months due to fears of lower demand in global markets. Iraq’s economy relies heavily on crude oil exports, which account for more than 90 percent of its revenues.

Angola protests to OPEC over its lower oil output quota --Angola has sent a note of protest to OPEC over a decision by the wider OPEC+ oil producer group to reduce the country’s oil output quota for 2024, the office of Angola’s oil minister said in a statement. OPEC+ lowered Angola’s oil output target for 2024 at a meeting on Thursday to 1.11 million barrels per day. This followed a review by outside analysts to verify production figures for Nigeria, Angola and Congo. “Because the decision was not taken unanimously and was against Angola’s position, during the meeting we reiterated our proposal for a quota of 1,180,000 barrels of crude oil per day for 2024 and afterwards a note of protest was sent to the OPEC Secretariat,” the statement said. OPEC did not immediately respond to a request for comment. Disagreements over African output quotas was cited by OPEC+ sources as a reason why it postponed a meeting that was originally scheduled for Nov. 26 until Thursday. Angola’s OPEC Governor Estevao Pedro was quoted on Thursday by Bloomberg as saying the country was unhappy with its 2024 target and did not plan to stick to it. He did not respond to a Reuters request for comment on Friday.

OPEC oil output drops in November, in first fall since July: survey(Reuters) — OPEC oil output fell in November in the first monthly drop since July, a Reuters survey found, as a result of lower shipments by Nigeria and Iraq as well as ongoing market-supporting cuts by Saudi Arabia and other members of the wider OPEC+ alliance.The Organization of the Petroleum Exporting Countries pumped 27.81 million barrels per day (bpd) last month, down by 90,000 bpd from October, the survey on Wednesday found. Production had risen in the three months to October.

The Oil Market Continued to Sell Off on Monday Posting a Third Consecutive Day of Losses -The oil market continued to sell off on Monday posting a third consecutive day of losses. The market remained under pressure on concerns over slowing demand and some skepticism that OPEC+ output cuts will amount to actual cuts. The cuts are voluntary, raising doubts about whether or not producers would fully implement them and traders are also unsure about how the cuts would be measured. The crude market posted a high of $75.03 in overnight trading and continued to trend lower and posted a low of $72.63 by mid-morning. The market retraced some of its losses and traded back over the $74.50 level on comments made by Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said OPEC+ oil production cuts can “absolutely” continue past the first quarter if needed. The market however, erased those gains and traded back to the $73.00 level ahead of the close. The January WTI contract settled down $1.03 at $73.04 and the February Brent contract settled down 85 cents at $78.03. The product markets ended the session in mixed territory, with the heating oil market settling down 18 points at $2.6597 and the RB market settling up 1.31 cents at $2.1342. Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ oil production cuts can “absolutely” continue past the first quarter if needed, as he pledged the cuts would be delivered in full. He said the supply reductions of more than 2 million bpd will only be withdrawn after consideration of market conditions and using a “phased-in approach.”U.S. Deputy Energy Secretary, David Turk, said the U.S. is taking advantage of low oil prices and refilling the SPR as much as it can. However, he said the amount is limited by physical constraints in the caverns. He said the Biden administration may not be able to take full advantage of the recent fall in oil prices. He said physical constraints and maintenance at the network of underground caverns along the U.S. Gulf Coast have been limiting the amount the Energy Department can purchase to about 3 million barrels a month. The more than 700 million barrel oil reserve currently stands at about 350 million barrels, following the Biden administration’s 180 million barrel withdrawal. So far efforts to refill the reserve have been slow, with two of the reserve’s sites in Texas and Louisiana offline for maintenance and a $1.4 billion modernization program, funded through oil sales, behind schedule and over budget. The Energy Department, which solicited a request for 3 million more barrels for the reserve, said it has “secured” 12 million barrels for the reserve, including the direct purchase of 9 million barrels and the return of 4 million barrels from oil companies.Saudi Aramco's Chief Executive, Amin Nasser, told a panel on the sidelines of the COP28 climate summit in the UAE that that all the renewable energy coming to market is still not enough to handle additional demand. He added that more investment in the oil and gas sector is still needed.The United Arab Emirates’ Energy Minister, Suhail al-Mazrouei, said that investments in hydrocarbons were necessary to avoid a “high pricing environment” during the green transition.OPEC Secretary General, Haitham al-Ghais, said that to say that oil has to stay under the ground will not lead to energy transition but to energy chaos. He said "We don't feel that vilifying (the) industry is a constructive approach."

Brent Futures Slide below $78 After Saudi Aramco Cut OSPs -- Erasing morning gains, oil futures fell again on Tuesday after Saudi Aramco lowered its official selling oil prices for January loadings to the key Asian market for the first time in seven months, further bolstering the view that market fundamentals are softening heading into the first quarter 2024. Saudi state-owned giant Aramco sliced the price of its flagship Arab Light crude shipped to Asia by $0.50 bbl for the month of January to $3.50 bbl over Platts Dubai/Oman basket. Aramco further reduced official selling prices for Northwest Europe, down a sizable $2 bbl compared to December loadings against ICE Brent futures. U.S. Gulf Coast buyers saw a more modest reduction of $0.30 bbl to $7.15 bbl over Argus Sour Crude Index. The price cuts follow another extension of Saudi voluntary production cuts of 1 million bpd into the first three months of next year. The announcement was made in conjunction with voluntary reductions of 1.2 million bpd from the rest of the OPEC+ alliance. Traders mostly shrugged at supportive comments from Saudi and Russian officials this week who attempted to reassure markets that OPEC+ will deliver on the pledged curtailments. Saudi oil minister Prince Abdulaziz bin Salman further added that those cuts "could be absolutely extended beyond the first quarter 2024." Also on Tuesday, oil traders positioned ahead of the U.S. inventory report to be released by the American Petroleum Institute at 4:30 PM ET followed by official data from the U.S. Energy Information Administration Wednesday morning. Tuesday's macroeconomic data showed lopsided growth at the start of the fourth quarter, with the number of new job openings in the United States having dropped sharply in October, while business conditions in the service industry modestly improved. The Job Openings and Labor Turnover Survey revealed 8.7 million new jobs were available for the month of October -- the lowest in two years, as employers readjusted demand for available labor with a slowing economy. On the other hand, the economy's growth engine -- the services sector -- reported a modest uptick in November, with the headline index in business conditions moving further from contraction territory, while prices eased, and the new orders index surged. "Things look good for the sector right now with some new opportunity especially moving into the first quarter 2024," said Anthony Nieves, Chair of the Institute for Supply Management. At settlement, NYMEX January West Texas Intermediate futures declined $0.72 to $72.32 per bbl, while Brent February dropped back $0.83 to $77.20 per bbl. NYMEX ULSD futures for January delivery softened $0.0186 to settle at $2.6411 per gallon, while RBOB futures dropped back to $2.1103 per gallon, down $0.0239.

WTI Extends Losses To 5-Month Lows Despite Crude Draw, Production Decline - Oil prices extended their recent plunge (to five-month lows) overnight following across-the-board inventory builds reported by API (especially at the Cushing hub). This morning's weak ADP report added more selling pressure (demand anxiety building on China concerns) as supply soars with US oil exports near record highs amid record high domestic crude production flooding the market, overshadowing Saudi Arabia’s pledges that OPEC+ will deliver on its planned production cuts.Non-OPEC countries are driving oil production growth, with the US, Brazil and Guyana contributing 1.4 million barrels per day, 0.43 million b/d and 0.2 million b/d, respectively. In 2024, the increase in non-OPEC production is likely to be in the range of 2 million b/d, according to ANZ Bank. API

Crude +594k (-1.00mm exp)
Cushing +4.28mm - biggest build since April 2020
Gasoline +2.83mm (+700k exp)
Distillates +890k (+1.00mm exp)

DOE

Crude -4.63mm (-1.00mm exp) - biggest draw in 3 months
Cushing +1.83mm
Gasoline +5.42mm (+700k exp)
Distillates +1.27mm (+1.00mm exp)

Flipping the script on API's data, the official DOE data shows a large 4.6mm barrel crude draw - the biggest in 3 months. Cushing stocks increased for the seventh straight week and products also saw builds... This occurred amid a massive negative 'adjustment'... For the second week in a row, the Biden admin added crude to the SPR (+330k barrels)... Cushing stocks rose to their highest since August... US Crude production actually declined by 100k b/d - the first weekly drop since July...

Oil Falls to 5-month Low on Supply Overhang, Demand Softness -- New York Mercantile Exchange oil futures accelerated a selloff into the afternoon session Wednesday following inventory data from the U.S. Energy Information Administration showing total refined product stockpiles climbed by a sizable 8 million bbl last week as domestic refineries emerge from fall maintenance while fuel demand is weak. Wednesday's inventory report was mixed-to-bearish, showing a much larger-than-expected build in gasoline and distillate stockpiles despite a slower-than-usual return of refining utilization following a heavy turnaround season this fall. Domestic refiners processed 16.2 million bpd of crude oil during the week-ended Dec. 1, which was 179,000 bpd more than the previous week's average but still 384,000 bpd below the 2022 processing rate. On the week, refiners raised run rates 0.7% to 90.5% of capacity compared to a 95.5% utilization rate during the same week a year ago. EIA figures showed gasoline inventories jumped 5.4 million bbl in the reviewed week to 223.6 million bbl, some 1% below the seasonal five-year average. Analysts mostly expected a 700,000-bbl increase. Distillate stockpiles rose 1.3 million bbl from the previous week to 112 million bbl and are now 13% below the five-year average. Jet fuel stocks rose 1.3 million bbl. Supporting elements in Wednesday's inventory report could be found in the crude complex where commercial stockpiles dropped by a much larger-than-expected 4.6 million bbl as oil producers scaled back output by 100,000 bpd from a record-high 13.2 million bpd. Oil stored at the Cushing tank farm in Oklahoma, the delivery point for the West Texas Intermediate contract on NYMEX, rose 1.8 million bbl to 29.6 million bbl. Wednesday's move lower in the oil complex follows Saudi Arabia's announcement to cut official selling prices for its flagship Arab Light crude for all key markets in January, underscoring weak demand fundamentals globally. Saudi Aramco sliced the price of Arab Light crude for January loadings to Asia by $0.50 bbl to $3.50 bbl over Platts Dubai/Oman average. Aramco further reduced official selling prices for Northwest Europe, down a sizable $2 bbl compared to December loadings against ICE Brent futures. U.S. Gulf Coast buyers saw a more modest reduction of $0.30 bbl to $7.15 bbl over Argus Sour Crude Index. The price cuts follow another extension of Saudi voluntary production cuts of 1 million bpd into the first three months of next year. The announcement was made in conjunction with voluntary reductions of 1.2 million bpd from seven other participants of the 24-country OPEC+ alliance. At settlement, NYMEX January WTI futures declined $2.96 to $69.38 per bbl, while Brent February dropped back $2.90 to $74.30 per bbl. NYMEX ULSD futures for January delivery fell $0.0649 to $2.5762 per gallon, while RBOB futures declined to $2.0302 per gallon, down $0.0801.

The Crude Market on Thursday Traded Lower After it Retraced Some of its Recent Sharp Losses - The crude market on Thursday traded lower after it retraced some of its recent sharp losses. The market opened 10 cents lower at $69.28 before it rebounded and gradually traded to a high of $70.48 early in the morning. It later erased all of its earlier gains and breached its previous low of $69.11 as it extended its losses 58 cents to a low of $68.80 in afternoon trading. The prospects of weak economic growth over the next few quarters, after almost two years of interest rate increases by most of the world’s central banks, are weighing on the crude market. The market later settled in a sideways trading range ahead of the close. The January WTI contract ended lower for the sixth consecutive session, down 4 cents at $69.34, its lowest settlement since June 27th. The February Brent contract also settled lower for the sixth consecutive session, down 25 cents at $74.05, its lowest settlement since June 28th. Meanwhile, the product markets ended the session in negative territory, with the heating oil market settling down 2.7 cents at $2.5492 and the RB market settling down 2.9 cents at $2.0012. On Thursday, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman called for all OPEC+ members to join an agreement on oil output cuts, saying they were for the good of producers and the broader global economy. Hours after the two leaders’ meeting, the Kremlin released a joint statement detailing wide-ranging talks between them on oil, OPEC+, the wars in Gaza and Ukraine and even Iran's nuclear program. The Kremlin said Russian President Vladimir Putin discussed OPEC+ cooperation on oil markets and the Middle East situation during talks with Saudi Crown Prince Mohammed bin Salman on Wednesday. Kremlin spokesman, Dmitry Peskov, said "The parties agree that our countries bear a great responsibility for interaction in order to maintain the international energy market at the proper level, in a stable, predictable state." The Kremlin said "They stressed the importance of continuing this cooperation, and the need for all participating countries to join to the OPEC+ agreement, in a way that serves the interests of producers and consumers and supports the growth of the global economy." Iraq’s Oil Minister, Hayan Abdel-Ghani, said Iraq renews its support of the OPEC+ agreement and its commitments to the voluntary output cut. He said Iraq’s decision comes within the framework of joint efforts to achieve oil market balance and stability. According to ANZ Research commodity strategists, the oil market has been overly bearish following the OPEC+ output cuts. They said the deal should be seen as a success even though the cuts are voluntary and added that a surprise unwinding of the additional cuts in the second quarter of next year can’t be ruled out.” They said market sentiment is unlikely to change until there is material evidence of the cuts. According to LSEG tracking, diesel arrivals in Europe in November reached 4.54 million metric tons, down from 4.62 million tons in October. LSEG analyst Raj Rajendran, said Brazil overtook Turkey as the biggest buyer of Russian diesel loaded in November, increasing to a record near 1 million tons.

Oil Gains on Improved Sentiment After Robust Jobs Report - West Texas Intermediate futures settled Friday's session 2.5% higher after a stronger-than-expected U.S. employment report diminished the outlook for recession early next year but complicated the outlook for Federal Reserve's efforts to bring inflation back to its 2% target in a timely manner. U.S. labor market delivered yet another surprise to the upside in November, adding 199,000 jobs and the unemployment rate fell back to a four-month low 3.7%, showed data released Friday morning by the U.S. Bureau of Labor Statics. The labor force participation rate increased to 62.8%, meaning more workers are entering the labor market towards the end of the year. What's notable is employment gains were spread out across different sectors of the economy, including healthcare, up 77,000 from the previous month, government, up 49,000, and leisure and hospitality, up 40,000 from October's 19,000 increase, which could signal a reacceleration of activity for the restaurant and travel industries. Equities gained, the U.S. dollar rallied, and WTI futures jumped back above $71 bbl as investors continued to assess the impact of the November employment report on the path of the federal funds rate next year as recession still seems to be far in the distance. This week's macroeconomic data could have suggested that the labor market is indeed losing its post-pandemic momentum, with new job openings falling to a 2-1/2 year low 8.733 million in October and employment in the private sector increased by a modest 103,000 as employers pulled back on new hiring in a "wait-and-see" approach towards the end of the year. At settlement, WTI futures for January delivery on NYMEX jumped $1.89 to $71.23 bbl after the contract plunged below $70 bbl on Wednesday for the first time since July. Gains for WTI come despite the U.S. dollar index rallying 0.46% against a basket of foreign currencies to settle the session at 103.983. The international crude benchmark Brent contract on ICE advanced $1.79 per bbl, pushing above $75 per bbl to settle at $75.84 per bbl. NYMEX RBOB January futures gained $0.0486 from a two-year low to settle at $2.0498 per gallon. NYMEX ULSD futures for January delivery increased $0.0318 to $2.5810 per gallon.

Kuwait calls for commitment to UN sea convention in Gaza siege -- Kuwait affirmed the need to commit to the articles of the United Nations Convention on the Law of the Sea, noting that Palestine is deprived of its right to benefit from the Gaza Sea, due to the Israeli occupation siege.Kuwait considers the convention as a UN constitution that determines the rights of all countries in seas and oceans, said diplomatic attaché at Kuwait's permanent delegation to the UN Hamad Al-Saeedi, during a UN General Assembly meeting on Oceans and the Law of the Sea, held in New York late Thursday.Palestine joined the convention in January 2015, however, the country is deprived of all sea rights by the Israeli occupation force, he noted.Al-Saeedi called on the UN to look into the issue in the near future, as the "Gaza humanitarian aid ship" will sail towards the strip, with the participation of 30 Kuwaiti charity societies, in cooperation with the Turkish Red Crescent. He hoped the ship would reach the Gaza Strip safely without harm by Israeli occupation aggression.

Iran sets up working group to stop fuel supply to Israel: deputy FM –--(Xinhua) -- Iran's Foreign Ministry has set up a special working group to explore ways to stop fuel supply to Israel, the official news agency IRNA reported on Sunday. At a meeting held in the Iranian capital Tehran to show support to Palestine, Iranian Deputy Foreign Minister for Political Affairs Ali Bagheri Kani said the ministry formed the group to engage with Israel's fuel suppliers in order to stop Israel from bolstering its fuel reserves, according to the report. The move followed remarks made by Iran's Supreme Leader Ali Khamenei last month, in which he urged Muslim states to cease oil export to Israel, according to Bagheri. Iran has been a vocal opponent to Israel's attacks on the Gaza Strip, which have killed 15,200 people in the Palestinian enclave. The Israeli attacks were triggered by Hamas's surprise attack on southern Israel on Oct. 7, during which about 1,200 people were killed and about 240 people were held hostage

US Launches Airstrike in Iraq, At Least Five Militia Members Killed - -- A US airstrike killed at least five Iraqi militia members in Iraq’s northern Kirkuk province as the situation in the region is escalating following the resumption of Israel’s assault on Gaza.Iraqi security sources told AFP that the strike targeted a site used by the Popular Mobilization Forces (PMF), a state-sponsored coalition of mainly Shia militias that was formed in 2014 to fight ISIS.According to Al Mayadeen, the Islamic Resistance of Iraq, a relatively new umbrella group of Iraqi Shia militias, said five of its members were killed in the strike. The group has claimed many of the recent attacks on US bases in Iraq and Syria, including two earlier on Sunday.A US official speaking on the condition of anonymity confirmed the strike in comments to AFP, but it has not been officially announced by the Pentagon. “A self-defense strike was carried out on a drone staging site,” the official claimed.US troops based in Iraq and Syria have been attacked over 70 times since October 17 in response to President Biden’s support for Israel’s onslaught in Gaza. There was a period of relative calm during the truce between Israel and Hamas, but attacks ramped up again when the pause ended on Friday.The US has now launched several rounds of airstrikes in Syria and Iraq in response to attacks on US troops. The situation will likely continue to escalate as the Islamic Resistance of Iraq is vowing to intensify attacks until US forces are “expelled, humiliated, and defeated from” Iraq.

Pentagon Says US Warship and Commercial Vessels Came Under Attack in Red Sea - The Pentagon said Sunday that a US Navy destroyer and several commercial vessels came under attack in the Red Sea, The Associated Press reported.“We’re aware of reports regarding attacks on the USS Carney and commercial vessels in the Red Sea and will provide information as it becomes available,” a Pentagon official told AP.Later on Sunday, US Central Command said the USS Carney responded to attacks on three commercial vessels, the Unity Explorer, the Number Nine, and the Sophie II. CENTCOM said the Carney shot down a total of three drones, including two that were heading in its direction.CENTCOM blamed the attacks on Yemen’s Houthis, who announced that they attacked the Unity Explorer and Number Nine but did not mention firing on the USS Carney. CENTCOM also claimed the attacks were “fully enabled by Iran,” although there’s no evidence of Iranian involvement.“The United States will consider all appropriate responses in full coordination with its international allies and partners,” CENTCOM said.The Houthis, formally known as Ansar Allah, have been targeting Israeli-linked ships and firing missiles and drones at Israel in response to the Israeli onslaught in Gaza, which resumed in full force on Friday. The Houthis also recently downed a US MQ-9 Reaper drone that was flying near Yemen.

Oil pipeline in S. Yemen sabotaged by unidentified gunmen (Xinhua) -- A group of unidentified gunmen carried out an attack and sabotaged a crude oil pipeline in southern Yemen's oil-rich province of Shabwa, a government official said on Monday. The gunmen used explosives to bomb the main crude pipeline near the Jannah Hunt oil field on Sunday night, which has caused significant damage and resulted in a substantial crude oil spill, said the official who required anonymity. He added that the motives behind the attack remain unclear as the gunmen's identities are yet to be unveiled. The pipeline, connecting the Jannah Hunt oil field with the crude oil storage facilities in Alam, Jardan district, is now inoperative, posing a challenge to the region's oil distribution network, according to the official. Security forces and an engineering team were dispatched to repair the damage, who were however hindered by the gunmen, leading to an armed confrontation near the oil field. The situation escalated until the Giants Brigades, a militia loyal to the Southern Transitional Council, intervened. These forces have been governing Shabwa since early 2022. The region's oil infrastructure has been vulnerable to repeated attacks by various armed groups, often motivated by service demands or as a means to exert pressure on local authorities for various reasons, including the release of prisoners..

Saudis Ask U.S. for Restraint As Houthis Direct Missiles At Israel --As Yemen’s Houthis continue to target vessels in the Red Sea, and claimed on Wednesday to have launched missiles directly at Israel, Saudi Arabia is calling on the U.S. to show restraint as U.S. naval forces respond to Houthi attacks. On Wednesday, the Houthis launched “several” ballistic missiles at Israeli military posts in the city of Eilat, Reuters reports, citing a Houthi spokesperson. That statement followed the U.S. Navy’s shooting down of a Houthi drone earlier in the day. Analysts seem to be of the opinion that the Saudis are calling for restraint in order to avoid further escalation as this vital oil shipping route comes under attack. The calls for restraint follow an incident on Sunday in which three commercial ships were attacked by Houthis in international waters. The Houthis claimed the vessels had connections to Israel, which the Israelis have denied. The U.S. Navy shot down three Houthi drones when the vessels came under attack. Vaguely, the Pentagon has simply said if it decides to take more direct action against the Houthis, it will be “at a time and place” of its own choosing, apparently referring to the Saudi call for restraint. The Houthis pose a significant threat to commercial shipping through the Bab el-Mandeb Strait. The Bab el-Mandeb Strait is a sea route choke point between the Horn of Africa and the Middle East, connecting the Red Sea to the Gulf of Aden and Arabian Sea. Most exports of petroleum and natural gas from the Persian Gulf that transit the Suez Canal or the SUMED Pipeline pass through both the Bab el-Mandeb and the Strait of Hormuz. With Israel’s war on Gaza raging, the Saudis are concerned with maintaining several balances, including the fragile semi-peace in Yemen that has resulted from its restoration of diplomatic ties with long-time arch-rival Iran, who has backed the Houthis, which have a sizable weapons arsenal. That arsenal was used in 2019 to attack Saudi Aramco oil facilities to devastating (if short-lived) impact on oil markets. Reuters has cited “senior sources in the Iran-aligned camp” as saying that the Houthis were using Red Sea attacks to pressure the U.S. to push Israel to cease its offensive on Gaza.

US Tells Israel Not to Strike the Houthis in Yemen - The Biden administration has asked Israel not to respond to recent attacks by Yemen’s Houthis, The Wall Street Journal reported on Thursday.The Houthis, formally known as Ansar Allah, have fired missiles and drones at Israel in response to the Israeli onslaught in Gaza and have targeted Israeli-linked commercial ships in the Red Sea. US warships have responded to the Houthi attacks and have downed several Houthi missiles and drones in recent weeks.According to the Journal, the US is concerned an Israeli response could spark a major regional war. US officials told Israel that the US would handle any potential response, although POLITICO reported that the administration is not planning on directly targeting the Houthis, at least for now.The POLITICO report said the Pentagon has drawn up plans to strike the Houthis, but they have not been presented or recommended to President Biden. The report said there is a “high-level consensus within the administration that it does not make sense for the US military to respond directly to the Houthis.”Saudi Arabia has also urged the US not to strike the Houthis over concerns that such an attack could jeopardize the Saudi-Houthi peace process. A ceasefire between the Saudis and the Houthis has held relatively well since April 2022, but a lasting peace deal has not yet been signed.The US announced sanctions targeting the Houthis on Thursday that target 13 people and firms allegedly involved in the sale and shipment of Iranian commodities. The Treasury Department claims the network has transferred tens of millions of dollars worth of foreign currency to the Houthis.

US Considers Forming Red Sea Task Force Amid Houthis Attacks - US officials are considering forming a Red Sea task force with other nations after a series of attacks by Yemen’s Houthis against commercial shipping that’s come in response to the Israeli onslaught in Gaza.“We are in talks with other countries about a maritime task force of sorts involving the ships from partner nations alongside the United States in ensuring safe passage of ships in the Red Sea,” National Security Advisor Jake Sullivan said on Monday.Sullivan’s comments came a day after the Pentagon said a US Navy destroyer, the USS Carney, responded to attacks on three commercial vessels in the Red Sea that were launched from Houthi-controlled areas of Yemen. The Pentagon said the USS Carney shot down three drones heading in its direction, but Sullivan said the US “cannot assess” if the US warship was purposely targeted. The Houthis, formally known as Ansar Allah, took credit for attacks on two of the commercial vessels, saying they were tied to Israel, but did not say they targeted the USS Carney. The Houthis have also recently fired missiles and drones at Israel, and some have been intercepted by US warships in the Red Sea.The US has backed a Saudi-led coalition against the Houthis in a brutal war in Yemen since 2015, but it’s rare the US and the Houthis exchange direct fire. Back in 2016, the US bombed Houthi radar sites in response to attacks on a US warship in the region. At the time, the Houthis denied targeting the US vessel…

Israeli Defense Minister Threatens Military Action to Push Hezbollah Back from Lebanon Border - Israeli Defense Minister Yoav Gallant said Wednesday that Hezbollah must be pushed back from the Israeli border, and if it’s not achieved through diplomatic means, Israel will take military action.The comments suggest Israel is considering opening a second front in Lebanon beyond the cross-border strikes Israel and Hezbollah have been exchanging since October 7.According to a recent report from Axios, some US officials are concerned that Israel might provoke Hezbollah to justify a wider war in Lebanon. The report said that Secretary of Defense Lloyd Austin had “expressed concern” in a phone call with Gallant in November about the risk of escalation on Israel’s northern border.Gallant made the comments on Wednesday while visiting the northern coastal city of Nahariyya. He said the Israeli government would not encourage the approximately 80,000 civilians who evacuated areas of northern Israel to return to their homes until Hezbollah is pushed back beyond the Litani River, which is 18 miles north of the Israel-Lebanon border in southern Lebanon.At the end of the 2006 Israel-Lebanon war, UN Security Council Resolution 1701 established a demilitarized zone between the border and the Litani River, requiring Israeli forces to withdraw from southern Lebanon and Hezbollah to move north of the river.According to The Times of Israel, Gallant said the best option would be to reach a diplomatic solution to agree on the enforcement of Resolution 1701. If that didn’t happen, he said Israel would “act with all the means at its disposal” to push Hezbollah back through military action.Last month, Gallant threatened a major war with Lebanon, saying Israel could turn Beirut into rubble like Gaza. “Hezbollah is dragging Lebanon to a possible war, and is making mistakes,” he said. “What we can do in Gaza, we can also do in Beirut … Our pilots are sitting in their cockpits, their aircraft facing north.”

Putin Trots Around Middle East, All Smiles With MbS, While US Can't Secure Ukraine Funding -It was no mere awkward fist bump, but instead Russian President Vladimir Putin's reception in Riyadh Wednesday was clearly very warm and enthusiastic.From the moment Putin walked out onto a royal purple carpet-bedecked airport tarmac to later being officially greeted by crown prince Mohammed bin Salman (MbS), it was chummy handshakes, back slaps and smiles all the way around."Nothing can prevent the development of our friendly relations," Putin told MbS, and invited him to visit Moscow in return."It is very important for all of us to exchange information and assessments with you on what is happening in the region. Our meeting is certainly timely," Putin said.Below is the moment of Putin's being received and welcomed by a glowing MbS, ironically at the very moment President Biden gave a White House speech bemoaning the inability of Congress to pass Ukraine defense funding, which runs out in three weeks...

Focus on Fracking

Sunday, December 10, 2023

January natgas price is lowest on record; oil price losing streak is longest in five years; 18.9 million barrels of oil disappear

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