oil prices bounced off 6 month low; US oil production matched record high; commercial crude inventories were at a 29 week low; gasoline inventories were at a 38 month low, distillates imports were at a four year low, distillates exports were a record high...
US oil prices finished lower for the sixth time in seven weeks on news of peace talks in the Middle East and on a sharp downward revision to US jobs data….after slipping 0.2% to $76.65 a barrel last week as US crude inventories unexpectedly increased and Chinese economic data disappointed, the contract price for the benchmark US light sweet crude for September delivery declined in early Asian trading on Monday, on concerns over weaker demand from China, and on the progress of ceasefire talks in the Middle East, then sold off sharply at midday in New York with news that further progress was being made in the Gaza ceasefire talks, and settled $2.28 lower at $74.37 a barrel on the prospect that successful Middle Eastern peace talks would reduce risks to supply…oil prices moved lower and hovered near 2 week lows in Asian trading Tuesday, as Middle East supply concerns eased after Israel accepted a US proposal to tackle the disagreements blocking a ceasefire deal in Gaza, but bounced higher during the morning in New York on the news of continued fighting in Gaza and the retrieval of the bodies of six hostages that had been held in Gaza, only to fade again by the close to expire 33 cents lower at a two week low of $74.04 a barrel on Israel's acceptance of the US cease fire proposal, and as economic weakness in China weighed on fuel demand, while the more actively traded US oil contract for October ended down 49 cents at $73.17 per barrel….with markets now quoting the contract for the benchmark US light sweet crude for October delivery as the widely traded front month, oil prices steadied in overseas trading early Wednesday after the American Petroleum Institute reported an unexpected small build in crude inventories, albeit with falling fuel supplies, then moved higher after the EIA reported large decreases in both crude and fuel inventories for the week, but reversed to trade lower following a significant downward revision to U.S. employment growth over the past year, and settled $1.24, or 1.7% lower at a seven month low of $71.93 a barrel as the 30% cut in US job growth more than offset the lower inventory reports…oil prices fell for a fifth straight session in Asian markets early on Thursday, as global demand concerns exerted pressure on the market, despite the decline in US fuel inventories, but rallied in New York as the minutes of the Fed’s July meeting showed most Fed officials thought the central bank was on track for an interest rate cut next month, and settled $1.08, or 1.5% higher at $73.01 a barrel, supported by the expectation that the Fed would cut interest rates in September….oil prices rose more than $2 a barrel early on Friday after Fed Chairman Powell endorsed easing the Fed’s policies, saying further cooling in the job market would be unwelcome, and settled the day’s trading up $1.82, or 2.5%, at $74.83 a barrel, after Fed Chair Powell indicated the central bank was preparing to cut interest rates, but still finished the week 2.4% lower, while the contract price for the benchmark US light sweet crude for October delivery which had finished the prior week priced at $75.54 a barrel, ended 0.9% lower..
meanwhile, natural gas prices finished lower for the fifth time in six weeks on a bearish storage report after temperature forecasts had shifted milder earlier in the week…after slipping 0.9% to $2.123 per MMBTU last week as a shift in the forecast to milder temperatures offset a rare summertime withdrawal from natural gas inventories, the price of the contract for natural gas for September delivery opened nearly five cents higher Monday morning, as weather forecasts indicated a bullish shift, and rallied to an intraday high of $2.245 by 10:35 AM, before trading sideways for the balance of the day and settling 11.2 cents higher at $2.235 per mmBTU on a decline in output for the month, and on forecasts for hotter weather next week than was previously forecast….however, natural gas opened down a penny on Tuesday and drifted lower from there, as traders weighed near-term cooling demand against stout storage supplies, to settle 3.7 cents lower at $2.198 per mmBTU as weather outlooks pointed to increasingly mild conditions across major natural gas-consuming regions…natural gas prices again moved lower early Wednesday as cooler near-term temperatures offset forecasted month-end heat, and settled 2.1 cents lower at $2.177 per mmBTU as the tremendous oversupply of gas still in storage offset a recent bullish decline in output, and forecasts for more hot weather over the next two weeks than had been expected…carrying over the previous day’s weather-induced bearish momentum, the natural gas contract traded around $2.095 early Thursday ahead of the weekly storage report, then tumbled further after a bearish injection print to settle down 12.4 cents or 6% lower stoked end-of-season supply concerns….those stubbornly high levels of storage supplies and forecasts for waning weather demand then weighed on prices through midday trading on Friday, leading natural gas to settle another 3.1 cents lower at a two-week low 2.022 per mmBTU, on forecasts for lower demand next week than previously expected, which left prices 4.8% lower for the week.
The EIA’s natural gas storage report for the week ending August 16th indicated that the amount of working natural gas held in underground storage rose by 35 billion cubic feet to 3,299 billion cubic feet by the end of the week, which left our natural gas supplies 221 billion cubic feet, or 7.2% above the 3,078 billion cubic feet that were in storage on August 16th of last year, and 369 billion cubic feet, or 13.0% more than the five-year average of 2,930 billion cubic feet of natural gas that had typically been in working storage as of the 16th of August over the most recent five years…the 35 billion cubic foot injection into US natural gas working storage for the cited week was more than the 25 billion cubic foot addition to storage that markets were expecting before the report, and also more than the 23 billion cubic feet that were added to natural gas storage during the corresponding week in August of 2023, but a bit less the average 41 billion cubic foot injection into natural gas storage that had been typical for the same midsummer week over the past 5 years…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending August 16th indicated that due to a increase in demand for oil that the EIA could not account for and a decrease in oil supplies that the EIA could not account for, we had to pull oil out of our stored commercial crude supplies for the seventh time in eight weeks, and for the 20th time in the past 36 weeks...Our imports of crude oil rose by an average of 366,000 barrels per day to 6,652,000 barrels per day, after rising by an average of 61,000 barrels per day over the prior week, while our exports of crude oil rose by 289,000 barrels per day to 4,045,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to a net import average of 2,607,000 barrels of oil per day during the week ending August 16th, 77,000 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, from natural gasoline, from condensate, and from unfinished oils averaged 519,000 barrels per day, while during the same week, production of crude from US wells was 100,000 barrels per day higher at a record 13,400,000 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 16,526,000 barrels per day during the August 16th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,689,000 barrels of crude per day during the week ending August 16th, an average of 222,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a net average of 573,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending August 16th averaged a rounded 410,000 barrels per day more than what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [ -410,000 ] barrel per day figure onto 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 indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed… Moreover, since 420,000 barrels per day of oil supply could not be accounted for in the prior week’s EIA data, that means there was a 830,000 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, making the week over week changes we have just cited 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” demand, see this EIA explainer….there is also an aging twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)
This week’s average 573,000 barrel per day decrease in our overall crude oil inventories came as an average of 664,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 91,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirty-seventh SPR increase in the past forty-four weeks, following nearly continuous SPR withdrawals over the prior 39 months… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,529,000 barrels per day last week, which was 4.8% less than the 6,860,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at a record 13,400,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 13,000,000 barrels per day, while Alaska’s oil production was 23,000 barrels per day higher at 410,000 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 was 2.3% higher than that of our pre-pandemic production peak, and it’s also 38.1% 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 92.3% of their capacity while processing those 16,689,000 barrels of crude per day during the week ending August 16th, up from their 91.5% utilization rate of a week earlier, but still a bit below normal utilization for mid-summer… the 16,589,000 barrels of oil per day that were refined this week were still 0.5% less than the 16,776,000 barrels of crude that were being processed daily during week ending August 18th of 2023, and 4.8% less than the 17,302,000 barrels that were being refined during the prepandemic week ending August 16th, 2019, when our refinery utilization rate was at a prepandemic normal 95.9% for mid August…
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 46,000 barrels per day to 9,768,000 barrels per day during the week ending August 16th, after our refineries’ gasoline output had decreased by 318,000 barrels per day during the prior week.. This week’s gasoline production was 0.5% more than the 9,715,000 barrels of gasoline that were being produced daily over week ending August 18th of last year, but was 1.3% less than the gasoline production of 9,897,000 barrels per day during the prepandemic week ending August 16th, 2019…at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 123,000 barrels per day to 4,892,000 barrels per day, after our distillates output had decreased by 267,000 barrels per day during the prior week. Even after seventeen production increases in the past twenty-five weeks, our distillates output was 3.4% less than the 5,066,000 barrels of distillates that were being produced daily during the week ending August 18th of 2023, and was 8.4% less than the 5,340,000 barrels of distillates that were being produced daily during the week ending August 16th, 2019…
Even with this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 19th time in twenty-nine weeks, decreasing by 1,606,000 barrels to a 38 week low of 220,597,000 barrels during the week ending August 16th, after our gasoline inventories had decreased by 2,894,000 barrels during the prior week. Our gasoline supplies fell again this week because the amount of gasoline supplied to US users rose by 148,000 barrels per day to 9,193,000 barrels per day, and even as our exports of gasoline fell by 142,000 barrels per day to 731,000 barrels per day, while our imports of gasoline fell by 57,000 barrels per day to 531,000 barrels per day.…Even after nineteen gasoline inventory withdrawals over the past twenty-nine weeks, our gasoline supplies were still 2.8% above last August 18th’s gasoline inventories of 216,158,000 barrels, but are now about 3% below the five year average of our gasoline supplies for this time of the year…
Even with this week’s increase in our distillates production, our supplies of distillate fuels fell for the 18th time in thirty-one weeks, decreasing by 3,312,000 barrels to 122,811,000 barrels over the week ending August 16th, after our distillates supplies had decreased by 1,673,000 barrels during the prior week. Our distillates supplies decreased by more this week because our exports of distillates rose by 313,000 barrels per day to a record high of 1,853,000 barrels per day, and because our imports of distillates fell by 18,000 barrels per day to a four year low of 63,000 barrels per day, and because the amount of distillates supplied to US markets, an indicator of domestic demand, rose by 27,000 barrels per day to 3,576,000 barrels per day.. ...But even with 18 inventory withdrawals over the past 31 weeks, our distillates supplies at the end of the week were 5.2% above the 116,688,000 barrels of distillates that we had in storage on August 18th of 2023, but they are now about 10% below the five year average of our distillates inventories for this time of the year…
Finally, with only small, offseting changes in documented supply and demand, our commercial supplies of crude oil in storage fell for the 17th time in twenty-six weeks, and for the 29th time in the past year, decreasing by 4,649,000 barrels over the week, from 430,678,000 barrels on August 9th to a 29 week low of 426,029,000 barrels on August 16th, after our commercial crude supplies had increased by 1,357,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were about 5% below the most recent five-year average of commercial oil supplies for this time of year, while they were still 28.0% above the average of our available crude oil stocks as of the third weekend of August 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 in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply due to higher exports relating to the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this August 16th were 1.7% less than the 433,528,000 barrels of oil left in commercial storage on August 18th of 2023, but 1.0% more than the 421,672,000 barrels of oil that we had in storage on August 19th of 2022, while 1.5% less than the 432,564,000 barrels of oil we had left in commercial storage on August 20th of 2021…
This Week’s Rig Count
In lieu of a detailed report on the rig count, we are again just including a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of August 23rd, the second column shows the change in the number of working rigs between last week’s count (August 16th) and this week’s (August 23rd) count, the third column shows last Friday’s August 16th 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 25th of August, 2023…
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Keen Wildlife Area and four ODOT parcels to be fracked – Save Ohio Parks -It took the Ohio Oil and Gas Land Management Commission (OGLMC) just 22 minutes Monday to rubber stamp fracking under Keen Wildlife Area and four Ohio Department of Transportation (ODOT) parcels. The four-member, unelected commission appointed by Gov. Mike DeWine ignored shouted questions and concerns from Save Ohio Parks audience members about the harms of fracking under Ohio’s state parks and public lands, and did not allow the public to speak either before the meeting or afterward.EOG Resources, Inc. of Houston, Tex. was selected to frack 84 acres of Keen Wildlife Area in Harrison County. The lease bonus is expected to bring in $211,650 to the state, plus royalties of 12.5 percent and an additional amount of 5.5 percent of production, according to an ODNR press release.EOG reported $6 billion in revenue in the second quarter of 2024, with $1.6 billion reported as profit, according to a company press release. Good Jobs First Violation Tracker, a database of more than 600,000 cases in which companies and large nonprofits paid monetary penalties for regulatory violations and other forms of misconduct, reports that EOG Resources has been fined over $1.8 million for 30 gas and oil-related violations from 2008 to 2022.The commission selected four ODOT parcels for fracking. Three parcels were awarded to Gulfport Appalachia, LLC of Oklahoma City: right of way along SR 331 in Flushing Township in Belmont County; right of way along SR 26 in Wayne Township, Belmont County; and right of way along SR 78 in Summit Township, Monroe County.A right of way along SR 265 in Belmont County was awarded to Tiburon Oil and Gas Ohio, LLC.Gulfport Appalachia has 447 oil wells in Ohio, according to ShaleXP.com. It has 451 producing wells and 46 permits to drill in Ohio, according to MineralAnswers.com. The Good Jobs First Violation Tracker lists five penalties totaling $5.4 million for environmental violations for Gulfport, including a $3.7 million settlement with the EPA to reduce emissions from oil and gas operations in Ohio in 2020.Tiburon Oil & Gas was formed in January 2022 and is based in Houston. It does not have fines listed in Good Jobs First Violation Tracker.A nomination to frack 257 parcels under Salt Fork State Park and Salt Fork Wildlife Area in Guernsey County was withdrawn. Salt Fork is Ohio’s largest state park at nearly 20,000 acres and is often called its most beautiful.While the Salt Fork nomination could be interpreted as a small victory for Save Ohio Parks, a nomination can be resubmitted to the OGLMC.Nominations to frack another ODOT right of way parcel along SR 265 in Somerset Township, Belmont County, and 30 acres in the Egypt Valley Wildlife Area in Belmont County were approved by the commission and will go out to bid in October, according to the ODNR.A nomination to frack ODOT right of way along SR 53 in Guernsey County was denied because the economic benefits were deemed too low.“It’s disturbing that the commission is leasing our beloved parks to oil and gas companies that have broken the law or are affiliated with companies that have done so,” said Jenny Morgan, a Save Ohio Parks steering committee member and longtime environmental and public health advocate. “This is an industry that uses dangerous chemicals, creates 3 billion gallons of contaminated, often radioactive waste annually nationwide, and is responsible for an accident nearly every day in Ohio. This industry has no business being in, adjacent to, or under our beloved parks. “How are all of these accidents impacting our Ohio land, creeks, plant and animal habitats, drinking water and health?” Morgan asked.Last month Morgan created the Daily Accident Report-Ohio Oil & Gas) (DAR) Facebook page at bit.ly/3Xi236X to publicize ODNR reports on thousands of gas and oil production accidentsthat have occurred over the last nine years in Ohio. DAR is challenging industry claims that fracking is safe and environmentally friendly, and that accidents are far and few between.More than 1,400 accidents related to gas and oil industry have been reported to the ODNR over the last five years. Ted Auch, Midwest program director for FracTracker Alliance, analyzed and mapped the accidents.FracTracker is a nonprofit that studies, maps, and communicates the risks and impacts of oil, gas, and petrochemical development.Auch said the ODNR accident trends indicate a troubling pattern of lax regulation along with superficial attempts to clean up oil, gas and radioactive fracking wastewater from lands and water across the state.Despite these accidents, one pending lawsuitand an appeal, plus a state investigation on the submission of alleged fraudulent pro-fracking emails to the OGLMC, the commission appears determined to keep on fracking.Public comments to frack two additional parcels totaling 127 acres under Leesville Wildlife Area and Muskingum Watershed Conservancy District Hunting Area are open until Aug. 25.Those parcels consist of 62 acres (24-DNR-0006) in Monroe Township, Carroll County and 65 acres (24-DNR-0006) in Orange Township, Carroll County. The lands were reclaimed from the effects of mining over the last 30 years and are popular with hunters, birders, anglers and hikers.
Save Ohio Parks statement on deceptive comments – Save Ohio Parks --Save Ohio Parks was instrumental in uncovering 1100 supposed pro-fracking comments submitted to the Oil and Gas Land Management Commission that at least 150 people whose names were on the comments said they never submitted. We talked with over 100 Ohio citizens who told us they never submitted the comments bearing their names, addresses, phone numbers, and email addresses. Many told us they did not know what fracking is. Some did not speak English, some did not have a computer, and some were children. We learned these comments were submitted by Consumer Energy Alliance, which had gathered the personal information of Ohioans for a different purpose, then used it on comments supposedly in favor of fracking our state parks and public lands. CEA has a track record of using citizens’ personal information without their knowledge and consent on pro-fossil fuel comments in several states, including a previous case in Ohio in 2016. Save Ohio Parks brought this information to the Oil and Gas Land Management Commission chair in August 2023 and asked her to remove the comments from the commission website. She declined but instead referred us to Attorney General Dave Yost’s office. We provided our documentation to the attorney general’s office, but never heard anything back from either Yost or the commission chair. Now we find out Yost’s investigation was closed months ago. The attorney general’s findings confirm what we told the commission a year ago: that Consumer Energy Alliance had gathered personal information from at least 1100 Ohioans for one purported purpose, then without their knowledge or consent had used that information for public comments supposedly in favor of fracking our state parks and public lands. The attorney general has proposed a new administrative rule that would label what Consumer Energy Alliance did — collecting personal information of Ohio citizens for one purpose but using it for another unrelated purpose — as a “deceptive act.” We support this rule but would like to see penalties specified for engaging in such deception. Save Ohio Parks again calls on the Oil and Gas Land Management Commission to remove these 1100 comments, which the attorney general has now confirmed were never submitted by the people whose names are on the comments. It is not right to leave the personal information of Ohioans that they did not submit posted publicly on a state website. We further call on the commission to stop rubber-stamping fracking of our Ohio state parks and wildlife areas, and instead listen to the thousands of Ohioans who actually did submit public comments against oil and gas extraction from the public lands that Ohio citizens own, pay for, and use. The commission is required by statute ORC 155.33(B)(1)(h) to consider “any comments or objections … submitted to the commission by residents of this state” in deciding whether to approve or deny a parcel proposed for fracking — yet they have not once discussed or referred to the extensive public comments opposed to fracking Ohio public lands, even as they continue approving fracking of our parks and wildlife areas. This must stop. We the people of Ohio own and use our public lands — just 3% of all land in Ohio. We do not want to see this land irrevocably altered by industrial fracking.
Ohio Supreme Court rules against Lorain County Auditor in appeal of Nexus pipeline value disagreement - The Ohio Supreme Court ruled against Lorain County Auditor Craig Snodgrass in his fight to appeal the value of the billion-dollar Nexus natural gas pipeline for tax purposes. The 4-3 decision was announced Tuesday. The state's highest court ruled that the $950 million value of the pipeline agreed to by state officials following negotiations with Nexus' owners couldn't be appealed. Snodgrass said the ruling was "unfortunate." "I'll continue to fight for our taxpayers," he said Tuesday. Partners in the Nexus pipeline "built this thing for $2 billion" and the state is "taxing it for less than half of what they built it for," Snodgrass said. "I wish my homeowners could receive that same type of treatment," he said. Meanwhile, Nexus "is pleased by the decision which supports the finality of the settlement agreement, providing additional revenue and certainty to local school districts," said Kristen Henson, a spokeswoman for Enbridge, one of the two corporate partners in the pipeline. Snodgrass asked the Ohio Board of Tax Appeals, or BTA, to enforce an assessment made in 2019 by the Ohio tax commissioner that set the pipeline's value at more than $1.6 billion. Nexus argued the pipeline's value should be lower, allowing it to pay less in taxes. Justice Patrick DeWine, son of Gov. Mike DeWine, wrote for the four-member majority that the question before the Supreme Court was a difference in two laws. One allowed the state tax commissioner to set tax values, while another allowed county auditors to appeal those decisions. The majority declared that a county auditor's ability to appeal a tax commissioner's decision is limited and Snodgrass' arguments couldn't be appealed to the BTA, according to the Supreme Court and court records. Patrick DeWine and Joseph Deters, both Republicans, and fellow justices Michael Donnelly and Jennifer Brunner, both Democrats, were the majority. Justice Patrick Fischer and Chief Justice Sharon Kennedy, both Republicans, and Justice Melody Stewart, a Democrat, dissented. Fischer wrote in the three-member dissent that the laws Patrick DeWine described didn't conflict and that the matter should have been sent back to the BTA. The BTA had ruled that Snodgrass wasn't allowed to appeal a June 2022 settlement agreement between the tax commissioner and Nexus. After the BTA ruled against him in February 2023, Snodgrass appealed to the Ohio Supreme Court to reverse the decision. In his appeal, Snodgrass argued he wasn't a party to the agreement and "the settlement agreement itself stated that it was not binding upon any of the county auditors, and that each auditor would have the statutory right to appeal the tax commissioner’s final determinations" under Ohio law, according to documents Snodgrass filed with the Supreme Court. State law "expressly" grants a county auditor the right to appeal, Snodgrass argued. Snodgrass was represented by attorneys from the law firm Roetzel & Andress in Akron. The Lorain County Board of Commissioners voted 2-1 to allow Snodgrass to hire outside attorneys to fight the case, with Commissioner David Moore, a Republican, calling it "a waste of money" on "a case that cannot be won." The 36-inch diameter Nexus pipeline is 256 miles long, crosses 13 Ohio counties and is capable of delivering 1.5 billion cubic feet of natural gas per day, according to court records. More than 83 percent of its length is in Ohio, along with numerous support facilities. The Federal Energy Regulatory Commission approved construction in 2017 at an initial cost of $2.2 billion. The pipeline ended up costing $2.6 billion, according to court records. Nexus presented the Ohio Department of Taxation with an appraisal in 2019 that put the value of the property and pipeline at $1.182 billion, with just over $996,000,000 of that in Ohio. That valuation was rejected by the state tax commissioner in favor of a taxable value of nearly $1.426 billion. Nexus asked for a reassessment, was denied and the tax commissioner's value was upheld in 2020. Nexus appealed to the BTA later that year, and the case dragged on until it was settled by both parties in 2022. Snodgrass didn't participate in any of those negotiations. He disagreed with the reduced valuation of the pipeline and claimed that Nexus misled the county and taxpayers when it declared how much money the project would bring to Lorain County. Snodgrass estimated the settlement between the state tax commissioner and Nexus will short Ohio counties along the pipeline route $600 million over the next 30 years. Under the settlement, Lorain County will receive less than half of the $7.3 million it was promised when the pipeline was proposed, Snodgrass said in September 2023. Tax revenue due to Lorain County Public Health, the Lorain County Joint Vocational School Distrct, the Firelands, Keystone, Midview and Oberlin school districts, the village of Kipton, the Wellington Fire District, the Central Lorain County Ambulance District and several Lorain County townships were affected, Snodgrass said.
Assessing how energy companies negotiate with landowners when obtaining land for hydraulic fracturing | Nature Energy -To extract natural gas through hydraulic fracturing, energy companies often need to obtain consent from many different private landowners, whose properties lie atop the gas reservoir. Negotiations with these landowners have important economic, environmental and social implications. In this paper we present a dataset on negotiations in Ohio and use these data to investigate how landowners may be advantaged or disadvantaged in these lease negotiations. We find that they are disadvantaged in two ways. First, because energy companies can use persistent and personal strategies to overcome landowner reluctance. Second, because of the institutional context: specifically the widespread use of compulsory unitization. We conclude by discussing the implications of these findings for equity in energy policy and by drawing out the other potential uses of these data.
Ohio landowners forced to accept fracking, new study finds -The record U.S. oil and gas boom may lie on a bedrock of aggressive sales and legal “compulsion,” a new study has found. Many Ohio landowners who ended up with fracked wells on their properties were forced by state law to accept them, according to findings published Monday in Nature Energy. Others gave in only after repeated and aggressive sales attempts, researchers at New York’s Binghamton University found.The study highlights an under discussed topic in the public debate surrounding fracking, a practice which has drawn renewed scrutiny amid the dueling Vice President Harris and former President Trump presidential campaigns in Pennsylvania.That debate often hinges on “big-picture consequences for the climate and the economy,” lead author Benjamin Farrer said in a statement. But Farrer emphasized that this leaves out a key part of the story — the experience of private landowners whose properties oil and gas companies must access if the vast majority of U.S. oil and gas production is to go forward.Fracking uses explosives and a highly pressurized blend of water, sand and caustic chemicals to force open layers of rock deep underground to extract oil and gas — a suite of technologies that has enabled U.S. oil and gas production to reach record levels under President Biden. In 2023, fracking accounted for about two-third of U.S. oil production and more than three-quarters of U.S. gas.Fracking is different from traditional oil and gas development in a few key ways. Its combination of high pressure and proprietary blends of caustic chemicals raises the risk of localized pollution to land and water, according to the Environmental Protection Agency. And because it relies on horizontal drilling through broad swaths of geological strata — as opposed to vertical wells into traditional reservoirs — it tends to require far more wells spread across a far larger area.The record U.S. oil and gas boom may lie on a bedrock of aggressive sales and legal “compulsion,” a new study has found. Many Ohio landowners who ended up with fracked wells on their properties were forced by state law to accept them, according to findings published Monday in Nature Energy. Others gave in only after repeated and aggressive sales attempts, researchers at New York’s Binghamton University found. The study highlights an underdiscussed topic in the public debate surrounding fracking, a practice which has drawn renewed scrutiny amid the dueling Vice President Harris and former President Trump presidential campaigns in Pennsylvania. That debate often hinges on “big-picture consequences for the climate and the economy,” lead author Benjamin Farrer said in a statement. But Farrer emphasized that this leaves out a key part of the story — the experience of private landowners whose properties oil and gas companies must access if the vast majority of U.S. oil and gas production is to go forward. Fracking uses explosives and a highly pressurized blend of water, sand and caustic chemicals to force open layers of rock deep underground to extract oil and gas — a suite of technologies that has enabled U.S. oil and gas production to reach record levels under President Biden. In 2023, fracking accounted for about two-third of U.S. oil production and more than three-quarters of U.S. gas. Fracking is different from traditional oil and gas development in a few key ways. Its combination of high pressure and proprietary blends of caustic chemicals raises the risk of localized pollution to land and water, according to the Environmental Protection Agency. And because it relies on horizontal drilling through broad swaths of geological strata — as opposed to vertical wells into traditional reservoirs — it tends to require far more wells spread across a far larger area. The work of gaining access to properties for that drilling falls to one of the most important, and least well-known, jobs in the oil patch: the “landman,” whose role is to convince landowners to sign leases for oil and gas extraction. The structure of these deals — and how the landmen secure them — is often shrouded in secrecy. But the Binghamton team got access to detailed records of landmen’s dealings with 31 landowners who companies ultimately sought to force to lease their land. They found a distinct reluctance on the companies’ part to take no for an answer. “Overall, we find widespread use of personalized tactics like phone calls and visits, as well as evidence that these tactics are used persistently,” the researchers wrote in Nature Energy. Landmen, they found, spent many months making repeated attempts to contact reluctant landowners. In one instance, an Ohio man faced repeated visits from a drilling company representative while in the hospital for cancer treatment. Another property owner who was opposed to signing a lease to allow fracking on her land received repeated calls and letters after she refused to do so — and then had company agents seek to persuade her through in-person pitches to her neighbors and family. And when persuasion fails, the researchers wrote, “we also find that many negotiations end in compulsion rather than in consent.” In many states, when the hard sell doesn’t work, oil and gas drilling companies can seek to get the state to force landowners to accept wells they don’t want. This practice is called “compulsory unitization” or “pooling,” and it provides landmen with a powerful trump card against wavering landowners. In many oil and gas states, if a majority of landowners atop an oil and gas reservoir consent to drilling, then the state can force the rest to accept drilling as well. In the past, when companies were using conventional oil and gas drilling — a practice that poses equivalent risk of localized pollution to land or water supplies to fracking but uses much less land — this was “a net positive” for landowners, Binghamton political science professor and study coauthor Robert Holahan said in a statement. The practice kept a few holdouts from scuttling a lucrative oil deal for everyone else — or allowed those landowners who wanted in on a big deal to force oil companies to admit them, Holahan said. But fracking is different, because drilling happens horizontally under so many more properties over a far wider area than traditional drilling, he said — a situation where compulsory unitization allows companies to “force mineral owners who otherwise don’t want to lease their property to do so.” By looking at dozens of randomly-chosen properties that had been the subject of compulsory unitization applications in Ohio, the researchers found that the tactic was being used in early-stage negotiations with landowners — not just holdouts to largely-secured leases or those who refused to respond. Holahan argues that oil- and gas-producing states should reform their laws to better reflect the new reality of oil and gas drilling. “Legal instruments, like compulsory unitization or pooling, are often designed to solve one type of problem (ensuring all mineral owners get a fair share of revenues from an oil or gas well), but eventually can be used for other purposes (forcing mineral owners to lease their rights),” said Holahan. “Effective resource policy requires a continuous updating of the law as technologies change,” he added.
Encino Signs 2nd Lease with Cambridge, OH City School -Marcellus Drilling News - - We spotted news that the Cambridge City School District (in Guernsey County, Ohio) has signed a second lease with Encino Energy (EAP Ohio LLC) to allow shale drilling under 4.8 acres. The first lease (which we missed) was signed in February of this year, allowing Encino to drill under 182 acres. The land is located along Wills Creek Valley Drive, often called the main campus. EGADS! Drilling *under* little chil’ren? Monstrous! (That’s sarcasm, folks. We know of other wells drilled directly next to schools in PA, with zero health and safety effects on the kiddies.)
OH’s Precision Pipeline Buys PA Pipe Fixer Allegheny Contracting - Marcellus Drilling News - We spotted a press release about pipeline repair company operating in the Marcellus/Utica, located in Ohio, Precision Pipeline Services, buying out a pipeline repair company based in Pennsylvania, Allegheny Contracting. We checked, and we’ve never written about either company. We always get a thrill when uncovering new companies involved in the M-U we didn’t know about. Both companies are privately-held, and the financial particulars of the deal were not disclosed.
In Ohio's Utica Shale, Oil Wildcatters Are at Home - For generations of wildcatters, the adage “oil is found where it’s been found before” has proven true. Today, it’s proving true in Ohio, which has been producing crude since 1814. That first well, the Thorla-McKee, was a shallow one and actually drilled for brine, a valuable commodity at the time, near Caldwell in Noble County. The salt was saturated with oil, though. The well’s partners, Silas Thorla and Robert McKee, decided to soak up the oil with blankets, ring it out and sell it as a topical medicine, calling it Seneca Oil. In 1859, a hole was made in Trumbull County in northeastern Ohio specifically for oil a few months after the global oil industry’s opener, the Drake well in Pennsylvania. More than a couple of centuries since that 1814 brine well, EOG Resources put four horizontals far deeper, landing them in the Ordovician Age’s Utica Shale. These flowed a combined 30,800 bbl in their first eight days in March, averaging 963 bbl/d each. Turns out, that EOG pad, White Rhino, is just a few miles from the 1814 Thorla-McKee. The EOG holes are among the southernmost tests of the new Utica oil play, in which operators are putting completions in laterals after other operators did the same during the past decade, but with completion recipes that were minted at that time. For example, a pad in Carroll County is being completed with slickwater today, while initial wells were pumped with gel in 2015. In the renewed play, more than 700 horizontals have been landed in the Utica Formation’s Point Pleasant since 2019—in the dry-gas, wet-gas and volatile oil phases. Among those targeting oil are Encino Energy’s three David Weaver holes in Harrison County, Stock township, near Tappan Lake. Brought online in December of 2020, they made a combined 104,000 bbl their first 31 days online. They haven’t sputtered out either. This past first quarter, they produced 30,000 bbl. Altogether, in 40 months online each, they’ve made 1.05 MMbbl through March 31. Solution gas totaled 6.5 Bcf; water, 379,000 bbl. Some of Encino’s wells in Stock are under Tappan Lake, a reservoir in the Muskingham Watershed Conservation District that’s named for the community that was displaced in 1938 by the damming, along with Laceyville which is now under the lake. With royalties, the district is earning from the oil and associated gas, a bar and grill was opened at one of the marinas in April and other improvements are underway in the 7,350-acre recreational area. Back south, in the area of that 1814 well, is a Microtel Inn & Suites that advertises, “Close to [the] Utica Shale.” It’s in Cambridge, about a half-hour north of Caldwell and the Guernsey County seat. Conversations are easily struck up in the area. Eventually, a local will ask, “What brings you to Ohio?” In New York City, “oil and gas” typically prompts confrontation. In Ohio, the answer brings smiles. “They’re drilling a well near my home!” one said, excitedly. In Ohio, the oil and gas industry is at home.
Utica Shale Academy opens new learning spaces - Three newly renovated buildings for the Utica Shale Academy are officially open. Their more than 100 students in grades 7 through 12 have more space for heavy equipment, welding, industrial maintenance and electrical robotics training. The academy aims to teach local kids skills at a younger age and encourages them to fill Ohio jobs. “There’s great things here. You can raise a family here and that's really what we tell our kids is you don't have to leave,” William Watson, Superintendent of the Utica Shale Academy said. “There's good jobs. We want you to be here because we love you here.” After graduation, students are connected with opportunities in several fields including the oil and gas industry. “The oil and gas industry in Ohio isn't just surviving, it’s thriving,” Mike Chadsey, the Director of External Affairs of the Ohio Oil & Gas Association, said. “Natural gas and crude oil can be refined into 6,000 products as well as power our economy and so our message to students that are considering this program or that are here today is that you have a bright future in this industry.” Superintendent Watson said as enrollment continues to grow they’ll offer more programs and are even thinking about training for new technologies. “We applied for an EV grant … so we have the thoughts and the vision. It's just now we have to make sure we write a good application and secure the funding,” Watson said. The academy was able to renovate the buildings after receiving a $2.65 million grant from Governor Mike DeWine and donations from the Williams family. The Williams Collaboration Center and the Energy Center are both located on E. Main Street in Salineville. The third building for the academy is located in Salem.
16 New Shale Well Permits Issued for PA-OH-WV Aug 12 – 18 -Marcellus Drilling News -- This week’s permit report is a bit different. Technically, for the week of August 12 – 18, a total of seven new permits were issued across the Marcellus/Utica. However, last week’s permit report omitted West Virginia numbers because the state’s online data service was out of order (see 26 New Shale Well Permits Issued for PA-OH-WV Aug 5 – 11). It’s back online this week, so we’ve included August 5 – 11 with August 12 – 18 for West Virginia, bumping the number much higher. So, for this report, we’re reporting a total of 16 new permits across all three states, but nine of those permits are from WV from two weeks ago. The big surprise for August 12 – 18 is that Pennsylvania issued no new permits. That’s the first time we remember that happening, not a single permit in PA. ARSENAL RESOURCES | ASCENT RESOURCES | EQT CORP | GUERNSEY COUNTY | HARRISON COUNTY | MARION COUNTY | MONROE COUNTY | OHIO COUNTY | SOUTHWESTERN ENERGY
Georgia Natural Gas Claims Customers Blocked 500 Million Lbs of CO2 - Marcellus Drilling News -According to an announcement from Georgia Natural Gas (GNG), the utility company's "Greener Life" program, which helps customers make their natural gas usage carbon neutral, has reached a new milestone of 500 million pounds of carbon emissions offset from the atmosphere. That amount is equivalent to taking over 50,000 cars off the road for a year. GNG buys natural gas from producers (in the Marcellus/Utica) that certify their gas as low-emissions using the MiQ protocol.
New O&G Pipeline Approvals Dropped 50% Under Biden-Harris - Marcellus Drilling News - Here’s a sobering fact: A web of red tape and environmentalist lawfare in the courts have derailed six of the last seven proposed interstate pipeline projects that could have delivered Appalachian natural gas to New England, the Southeast, and other regions of critical demand. The only pipeline to survive was the Mountain Valley Pipeline, and it took a literal Act of Congress to get it across the finish line. Here’s another sobering fact: Oil and gas pipeline approvals have dropped by 50% during the Biden-Harris administration (compared to the last three presidents before Biden). The precipitous drop was on purpose.
Op-ed: To build or not to build… Are we even permitted? - Appalachia is an American energy powerhouse, supplying the natural gas that underpins U.S. energy security, national security and our nation’s leading role in reducing carbon emissions. These are truths widely recognized and fiercely defended by residents in Pennsylvania, Ohio and West Virginia, so much so that candidate Harris’ campaign walked back her opposition of the industry to appeal to voters in the area. Although the debate over “fracking bans” has dominated headlines, it’s a red herring in the broader battle for U.S. energy leadership and environmental progress. Make no mistake, banning domestic energy development would wreak havoc on global stability, but the real crisis at hand lies in the cumbersome, outdated approval processes that stymie energy infrastructure projects. Think about it: We can produce all the energy in the world, but that means nothing if we can’t transport it to where it’s needed. Nowhere in the country are these infrastructure frustrations more prevalent than the Appalachian region. The Marcellus and Utica Shale formations that lie below are the most prolific in the nation and the resources are produced under the strictest environmental standards. However, with pipelines at maximum capacity, output from the region is restricted, unnecessarily limiting access to clean, abundant energy. A web of red tape and environmental activism in the courts have derailed six of the last seven proposed interstate pipeline projects that could have delivered Appalachian natural gas to New England, the Southeast and other regions of critical demand. These were considered a “win” for the environmentalist movement, but the biggest losers were energy consumers, like New England residents paying ~31% more for natural gas than the U.S. average. The lone project to survive this onslaught is the Mountain Valley Pipeline, which went through a grueling 10-year battle and eventually required an act of Congress to come online this summer. Despite clear demand for affordable, clean energy in mid-Atlantic states, environmental activists weaponized the regulatory and judicial process in hopes investors would eventually walk away. While the Supreme Court and Congress intervened to prevent the project’s demise, the potential of costly delays and legal challenges continues to loom large and may act as a deterrent on future investments in the region. The Biden-Harris administration’s track record reinforces a dire need for permitting reform in this country. Average pipeline approvals have declined by more than 50% under them compared to the last three occupying the White House. In addition, activists continue to use the legal system to slow down if not stop infrastructure development. Consider the recent federal appeals court decision threatening an existing pipeline’s expansion to serve 3 million new customers. Indeed, these are the back-door bans truly holding our country back from its full energy potential, not to mention climate progress. They pose significant reliability and security risks as power demand continues to climb at unprecedented levels. With our nation and modern societal needs continuing to grow and evolve, so too must our infrastructure. Sens. Joe Manchin and John Barrasso’s bipartisan Energy Permitting Reform Act (EPRA), introduced this summer, offers a glimmer of hope. If adopted, EPRA has the potential to create workable timelines to secure investment, provide surety to developers, and fast-track infrastructure key to bringing more Appalachian energy to users across the globe. Moving forward, let us remember that our goal is not only to build pipelines, transmission lines or LNG terminals but to build a stronger, more resilient energy system that serves all Americans. By reforming our outdated permitting processes, we can unlock the full potential of our energy resources, ensuring a brighter, more prosperous future for the nation.
Op-ed: Expanding oil and gas use not the answer - It should come as no surprise to anyone that the presidents of the Marcellus Shale Coalition, the West Virginia Oil & Gas Association and the Ohio Oil & Gas Association would claim that the industry they’re paid to promote and lobby on behalf of is the key to U.S. energy security and national security, and even that it reduces carbon emissions because its use emits less CO2 than coal. We can’t fault them for doing their jobs, but we can fault them for ignoring facts, painting over other facts and disparaging the name of environmental activists and others while they’re at it. In a piece in last weekend’s edition of the Parkersburg News and Sentinel titled “To build or not to build… Are we even permitted?,” these industry representatives claimed that “The Marcellus and Utica Shale formations that lie below [the Appalachian region] are the most prolific in the nation and the resources are produced under the strictest environmental standards.” While “strictest environmental standards” is a questionable assertion at best, it also ignores the realities spelled out annually in the Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking and Associated Gas and Oil Infrastructure (see: concernedhealthny.org). This report by the Concerned Health Professionals of New York, a program of the Science & Environmental Health Network and Physicians for Social Responsibility, currently in its ninth edition, is a fully referenced, 637-page report clearly and unequivocally demonstrating the immense and ongoing environmental, climate and public health harms related to fracking and the oil and gas industry more broadly. While these industry PR personnel and lobbyists claim that attempts to ban fracking are “red herrings,” communities faced with the devastation laid out in the aforementioned compendium do not consider preventing or stopping it to be a misleading or distracting ruse. What the authors describe as an “onslaught” caused by “a web of red tape and environmental activism in the courts”putting a stop to dangerous pipeline projects like the Atlantic Coast Pipeline and delaying the in-service date for the Mountain Valley Pipeline (MVP) was especially insulting to citizens of West Virginia and Virginia looking to protect their homes and health. Had the authors described these folks by name instead of simply as part of the “environmental movement,” their piece could have arguably been libelous.The Mountain Valley Pipeline is a 303.5-mile, 42-inch in diameter pipeline built to transport approximately 2 billion cubic feet of methane (aka “natural”) gas per day at up to 1,480 pounds per square inch of pressure. Part of the pipeline already ruptured during a water pressure test in Virginia earlier this year. A rupture while in full operation could be utterly catastrophic. Methane is 86 times more efficient a heat-trapping gas than CO2 over a 20-year period (though it stays in the atmosphere a far shorter time) and explosions are frighteningly possible.
Natural Gas Demand for Data Centers? It’s No Hype, Says Kinder Morgan Exec -- Natural gas generation is likely to expand as a proliferation of data centers are built across North America, offering a fortuitous advantage for midstream giant Kinder Morgan Inc., according to Chief Commercial Officer Will Brown. A map of Kinder Morgan infrastructure across the United States. The top executive discussed the Houston-based company’s gas strategy during a keynote address at the LDC Gas Forums Rockies & West conference in San Diego. “Is it real? Or is it hype?” Brown asked the audience about what data centers could mean for gas demand. It’s both, he answered. “It’s hyper…scale.”
Proposed Bluegrass Pipeline Poses Serious Risks to Kentuckians - Two out-of-state companies, Williams Companies, Inc and Boardwalk Pipeline Partners, are in the initial phases of getting approval to build a natural gas pipeline through Central Kentucky. The pipeline, an extension to an existing pipeline in Hardinsburg, Ky, will aim to connect natural gas liquids (NGLs) from the Marcellus and Utica Shale in the Northeastern US to the export markets along the Gulf Coast. This pipeline would cause major inconveniences to community members and increase safety and health risks, but no known benefit to Kentuckians other than those landowners leasing their property at a low, one-time payout. The Kentucky Student Environmental Coalition (KSEC), an organization comprised of Kentucky students from over 11 colleges and universities, believe that this pipeline is a bad deal for the Commonwealth and if allowed, will damage our landscapes and natural history, put our communities at risk, exacerbate climate change, and threaten our local agriculture and outdoor tourism. It is important to note that these natural gas liquids (a mixture of butane, ethane and propane) aren't meant exclusively for us [in Kentucky]. These arent even the kind of natural gases used to produce energy. They are mainly intended for export, to be sold on the global market. Kentucky seems to be merely a vehicle for getting NGLs to petrochemical refineries in the Gulf.
'Mostly unusable' | Existing gas pipes would need massive retrofit or crippling de-rating to carry hydrogen: study | Hydrogen Insight - ‘Serious safety and environmental risks associated with re-purposing pipes, alongside technical and economic challenges’, says peer-reviewed report.
Worker killed in natural gas pipeline explosion in Louisiana, authorities say - A pipeline worker who went missing after an explosion near South Pass, Louisiana, was found dead, according to the U.S. Coast Guard. The cause of the explosion is under investigation.The Louisiana State Police Emergency Services Unit reported that the explosion took place shortly after 8 p.m. Saturday in a marshy area near Venice in Plaquemines Parish. Joshua Nichols, 40, who was believed to be working on the pipeline at the time, was killed, WVUE reports.Police say when the explosion and fire occurred, Nichols had been operating a mud boat near a natural gas pipeline. His body was recovered by the Plaquemines Parish Sheriff’s Office on Sunday morning near the site of the explosion.The Coast Guard’s New Orleans Sector initially received information about the explosion, triggering a joint search effort involving boat and aircrew units.The cause of the explosion is still being investigated.Police say the pipelines have been blocked while one remains on fire. It is said to be burning the remaining natural gas in the line. Air monitor readings were done, and there is no threat to the public, according to police.
DC appeals court tosses Biden administration pipeline safety rules - A Washington appeals court on Friday ordered the Biden administration to rewrite sweeping new pipeline safety rules issued in 2022. In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled against the most recent standards finalized by the Pipeline and Hazardous Materials Safety Administration. In its ruling, siding with the Interstate Natural Gas Association of America (INGAA), the court invoked the governing statute for the agency, the Administrative Procedure Act, which requires the regulations to conduct a cost-benefit analysis for new rules. Writing for the majority, Judge Florence Pan, an appointee of President Biden, said the government’s cost-benefit analysis did not properly lay out why the benefits exceed the cost, the main source of the trade group’s objection. “We agree with INGAA that the agency failed to adequately explain why the benefits of the final standards outweigh their costs,” Pan wrote. “Because the agency imposed a new safety requirement without properly addressing the costs of doing so, the standard cannot stand.” In another of the rule’s standards, she wrote, “the agency’s reasoning fails because it neglected to analyze the costs altogether.” The Biden administration standards, which took effect in May 2023, imposed new regulations for pipeline operators to protect against corrosion or cracks. The appeals court allowed one of five standards, governing monitoring of pipes for certain types of stress damages, to remain in place. The newer rules finalized a decade-long process that began after the September 2010 rupture of a natural gas pipeline in San Bruno, Calif., which killed eight people and injured dozens more. In 2022, Transportation Secretary Pete Buttigieg said the updated rule would “significantly improve safety and environmental protections for our nation’s natural gas pipeline system, which will help save lives, avoid costly disruptions to gas service, and strengthen our supply chains.”
NextDecade Nixes Plans for CCS to Reduce Rio Grande LNG Emissions -- NextDecade Corp. has withdrawn its request for FERC to review a proposed carbon capture and storage (CCS) project in Brownsville, TX, that was previously proposed to reduce emissions from its Rio Grande LNG (RGLNG) export project. The Houston-based firm disclosed it voluntarily ended the application process to amend its Federal Energy Regulatory Commission authorization for the liquefied natural gas project to include the CCS facility. “We appreciate the FERC’s diligence during the review process,” CEO Matt Schatzman said. “The CCS project at RGLNG is not sufficiently developed to allow FERC review to continue at this time. We remain committed to advancing and lowering the cost of utilizing carbon capture and storage and helping companies reduce their facility emissions and achieving their clean energy goals.”
NextDecade withdraws carbon capture and storage application at FERC -- NextDecade Corporation announced that its subsidiary Rio Grande LNG, LLC withdrew its application at the Federal Energy Regulatory Commission (FERC) for the proposed carbon capture and storage (CCS) project at the Rio Grande LNG facility and requested that the FERC terminate the CCS proceeding. “We appreciate the FERC’s diligence during the review process,” said NextDecade Chairman and CEO Matt Schatzman. “The CCS project at RGLNG is not sufficiently developed to allow FERC review to continue at this time. We remain committed to advancing and lowering the cost of utilizing carbon capture and storage and helping companies reduce their facility emissions and achieving their clean energy goals.”
Calcasieu Pass LNG Customers Ask FERC to Deny Commissioning Extension --After reviewing a collection of private documents about commissioning of Venture Global LNG Inc.’s Calcasieu Pass export terminal, several of its foundational customers are again urging FERC not to approve an extension. Venture Global has been seeking an additional year to commission its Calcasieu Pass liquefied natural gas facility since February, the same month the facility was expected to be commercially operational. In the months since, the Federal Energy Regulatory Commission’s decision has been held up by a legal back and forth over documents Calcasieu Pass contract holders have said they need before being able to fully comment on Venture Global’s request. After an agreement to share the information was reached in administrative court, comments from Edison SpA LLC, Galp Energia SA, PKN Orlen SA, Repsol SA and Shell plc were published earlier this month. In their responses, counsel for the companies asked FERC staff to deny the extension.
TC Sanctions Natural Gas System to Supply Cedar LNG, Mulls CGL Expansion -- TC Energy Corp. is moving forward with the Cedar Link lateral from the Coastal GasLink (CGL) natural gas pipeline to supply the Cedar LNG Partners LP export project on Canada’s west coast. Map of Cedar LNG project. The decision comes two months after the Pembina Pipeline Corp. and the Haisla Nation sanctioned the Cedar liquefied natural gas export facility in Kitimat, British Columbia (BC). The C$1.2 billion ($734 million), 0.4 Bcf/d Cedar Link project would add a 0.4-kilometer (0.25-mile) Cedar Link Connector pipeline from Shell plc-led LNG Canada terminal to the Cedar floating LNG (FLNG) project. Additionally, TC plans to build a Mount Bracey Compressor Station in Prince George, BC and a meter station.
Tanker docks at Louisiana Plaquemines LNG plant for cooldown -- A tanker full of liquefied natural gas (LNG) docked at Venture Global LNG's Plaquemines export plant in Louisiana (U.S.), according to shipping data from LSEG on Friday, in what energy analysts said was a sign the plant could start up in test mode soon. The vessel named Qogir came from Norway full of LNG, according to LSEG data and energy analysts. LNG plants under construction, like Plaquemines, use super-cooled fuel to test and cool equipment in preparation for startup. After Plaquemines started pulling in small amounts of natural gas from U.S. pipelines in late June, analysts have said the plant could start turning gas into small amounts of LNG in test mode in coming months. Plaquemines took in small amounts of pipeline gas for several days in late June and then again in mid-July, and was on track to pull in the fuel for 25 days in a row on Friday, according to LSEG data. As part of its testing process, Venture Global sought permission in early July from the U.S. Federal Energy Regulatory Commission (FERC) to introduce gas to a gas turbine generator as part of its testing process. FERC regulates U.S. interstate gas pipelines and LNG terminals. Venture Global has said building the two phases at Plaquemines would entail an investment of about $21 B. Analysts have said they expect Venture Global to complete work on the first 1.8-Bft3d phase of Plaquemines from 2024 to 2026 and the second 1.2- Bft3d phase from 2025 to 2026. The U.S. is already the world's biggest LNG exporter with seven export plants able to turn about 13.8 Bft3d of gas into about 104.6 metric MMtpy of LNG. One Bft3 is enough gas to supply about 5 MM U.S. homes for a day. Analysts expect U.S. LNG export capacity will rise to around 17.0 Bft3d of gas or 129.4 MMtpy of LNG in mid-2025 as the first phase of Plaquemines and Cheniere Energy's expansion at its Corpus Christi, Texas plant start to enter service in 2024.
US natgas prices jump 5% to four-week high on hotter forecasts (Reuters) -U.S. natural gas futures jumped about 5% to a four-week high on Monday on a decline in output so far this month and forecasts for hotter weather next week than previously expected that should boost the amount of gas power generators burn to keep air conditioners humming. Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange rose 11.2 cents, or 5.3%, to settle at $2.235 per million British thermal units (mmBtu), their highest close since July 22. That price increase came even though there was still about 13% more gas in storage than is normal for this time of year. Storage builds, including last week's rare August withdrawal, have been smaller than normal in 13 of the past 14 weeks because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. The storage decline during the week ended Aug. 9 was the first weekly withdrawal in August since 2006. Higher prices in April and May prompted some drillers, including EQT and Chesapeake Energy, to start boosting output again. But after prices dropped 22% in July, some analysts said producers could keep their drilling activities reduced for longer. But with gas futures up about 9% so far in August, speculators last week boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the third time in four weeks to their highest since July, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. Financial firm LSEG said gas output in the U.S. Lower 48 states slid to an average of 102.4 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July. That compares with a monthly record high of 105.5 bcfd in December 2023. Meteorologists forecast weather across the country would remain mostly near normal through Aug. 23 before turning hotter than normal from Aug. 24-Sept. 3. With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 104.0 bcfd this week to 105.5 bcfd next week. The forecast for this week was lower than LSEG's outlook on Friday, while its forecast for next week was higher. Gas flows to the seven big U.S. LNG export plants rose to 12.8 bcfd so far in August, up from 11.9 bcfd in July when Freeport shut for nine days for Hurricane Beryl. That compares with a monthly record high of 14.7 bcfd in December 2023. Gas prices were trading around $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and at an eight-month high near $15 at the Japan Korea Marker (JKM) benchmark in Asia.
US natgas prices ease 1% as storage surplus offsets rising demand (Reuters) -U.S. natural gas futures eased about 1%on Wednesday as the tremendous oversupply of gas still in storage offset a bullish decline in output in recent days and forecasts for more hot weather over the next two weeks than previously expected. That heat should boost the amount of gas power generators burn to keep air conditioners humming next week. Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange fell 2.1 cents, or 1.0%, to settle at $2.177 per million British thermal units (mmBtu). The tremendous oversupply of gas in storage has kept a lid on gas prices all year. There was still about 12% more gas in storage than normal for this time of year even though weekly builds, including last week's rare decline in August, have been smaller than normal in 13 of the past 14 weeks. In Texas, power demand in the Electric Reliability Council of Texas (ERCOT) grid peaked at a preliminary record of 85,559 megawatts (MW) on Tuesday, topping the prior peak of 85,508 MW set on Aug. 10 2023. Real-time power prices in ERCOT topped $4,000/MW for three 15-minute intervals around 8 p.m. local time on Tuesday, peaking at $4,853 per MW, according to the ERCOT website. Day-ahead prices, where most firms sell energy, however, peaked at a much lower $123/MW-hour around 8 p.m. Producers increase and decrease output in reaction to prices, but it usually takes a few months for changes in drilling activity to show up in the production data. Average monthly spot prices at the U.S. Henry Hub benchmark in Louisiana hit a 12-month high of $3.18 per mmBtu in January before dropping to a 44-month low of $1.72 in February and a 32-year low of $1.49 in March, according to Reuters and federal energy data. In reaction to that price plunge, producers cut average monthly output from 106.0 billion cubic feet per day (bcfd) in February to 102.7 bcfd in March, 101.5 bcfd in April and a 17-month low of 101.3 bcfd in May, according to federal energy data. As monthly spot Henry Hub prices increased to $1.60 per mmBtu in April, $2.12 in May and $2.54 in June, some producers started to increase drilling activities, boosting output to 101.0 bcfd in June and 103.4 bcfd in July. But with average spot Henry Hub prices back down to $2.08 per mmBtu in July and $2.01 so far in August, analysts said output would likely decline as some producers reduce drilling activities again. Financial firm LSEG said gas output in the U.S. Lower 48 states has slid to an average of 102.3 bcfd so far in August, down from 103.4 bcfd in July. On a daily basis, LSEG said output was on track to drop by 1.3 bcfd over the past two days to a preliminary nine-week low of 100.6 bcfd on Wednesday. Analysts, however, noted that preliminary data is often revised later in the day.
EIA NatGas Storage Report Comes in at 10 Bcf Above Forecast -- Producers added 35 Bcf of natural gas to U.S. storage for the week ending Aug. 16, surpassing forecasts by 10 Bcf, the Energy Information Administration (EIA) announced Aug. 22. The news disappointed the market. Following the release, the cost of natural gas dropped at the Henry Hub and was $2.05/MMbtu at 12:30 a.m. EST on Aug. 22. Most of the additional gas in storage came from the Appalachian Basin. The Midwest added 19 Bcf and the East added 12 Bcf, according to the EIA. No other region of the country added more than 3 Bcf, and the South Central region, including Texas and Louisiana, added 0 [Bcf]. The amount is the largest weekly increase in natural gas added to storage since the first week of July. Last week, the EIA reported a rare summertime drop of 6 Bcf for the first time since 2018. Natural gas stocks are 369 Bcf above the five-year average for this time of year with a total of 3.3 Tcf currently in storage.
U.S. natgas prices drop 6% to 2-week low on big storage build, less heat U.S. natural gas futures dropped by about 6% to a two-week low on Thursday on a bigger-than-expected weekly storage build and forecasts for less hot weather over the next two weeks than previously expected. That less hot weather should reduce the amount of gas electric power generators burn to keep air conditioners humming. The U.S. Energy Information Administration (EIA) said utilities added 35 Bft3 of gas into storage during the week ended Aug. 16. That was more than the 29-Bft3 build analysts forecast in a Reuters poll and compares with an increase of 23 Bft3 in the same week last year and a five-year (2019–2023) average rise of 41 Bft3 for this time of year. Even though the storage build was less than expected, it was still smaller than normal for a 13th time in the past 14 weeks, including the rare summer withdrawal during the week ended Aug. 9. That withdrawal was the first weekly decline in August since 2006. With the latest build, gas stocks were still about 13% above normal for this time of year. Front-month gas futures for September delivery on the New York Mercantile Exchange fell 11.9 cents, or 5.5%, to $2.058 per MMBtu, putting the contract on track for its lowest close since Aug. 6. In the spot market, pipeline constraints caused next-day gas prices at the Waha hub in the Permian Shale in West Texas to average in negative territory again for a record 28th time this year. Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six in 2020 and once in 2023. Financial firm LSEG said gas output in the U.S. Lower 48 U.S. states has slid to an average of 102.3 Bft3d so far in August, down from 103.4 Bft3d in July. LSEG forecast average gas demand in the Lower 48, including exports, will rise from 103.7 Bft3d this week to 103.9 Bft3d next week. Those forecasts were lower than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants rose to 12.9 Bft3d so far in August, up from 11.9 Bft3d in July. That compares with a monthly record high of 14.7 Bft3d in December 2023.
US natgas prices slide to two-week low on ample storage, lower demand (Reuters) -U.S. natural gas futures slid about 2% to a two-week low on Friday on forecasts for lower demand this week than previously expected. Energy analysts also noted that the oversupply of gas in storage has kept a lid on gas prices all year. There was still about 12.6% more gas in storage than normal for this time of year even though weekly builds, including a rare decline during one week in August, have been smaller than normal in 13 of the past 14 weeks. That price decline came despite forecasts for hotter-than-normal weather over the next two weeks that should prompt power generators to burn more gasto keep air conditioners humming into early September. Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange fell 3.1 cents, or 1.5%, to settle at $2.022 per million British thermal units (mmBtu), their lowest close since Aug. 6 for a second day in a row. With the contract down for fourdays in a row, the front-month dropped about 5% this week aftereasing about 1% last week. In Canada, next-day gas prices at the AECO hub in Alberta fell to 20 cents per mmBtu, their lowest since hitting a record low of around 2 cents in August 2022, according to pricing data from financial firm LSEG going back to 1993. SUPPLY AND DEMAND Producers increase and decrease output in reaction to prices, but it usually takes a few months for changes in drilling activity to show up in the production data. Average monthly spot prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana hit a 12-month high of $3.18 per mmBtu in January before dropping to a 44-month low of $1.72 in February and a 32-year low of $1.49 in March, according to Reuters and federal energy data. In reaction to that price plunge, producers cut average monthly output from 106.0 billion cubic feet per day (bcfd) in February to 102.7 bcfd in March, 101.5 bcfd in April and a 17-month low of 101.3 bcfd in May, according to federal energy data. As monthly spot Henry Hub prices increased to $1.60 per mmBtu in April, $2.12 in May and $2.54 in June, some producers, including EQT EQT.N and Chesapeake Energy CHK.O, started to increase drilling activities, boosting output to 101.0 bcfd in June and 103.4 bcfd in July. But with average spot Henry Hub prices back down to $2.08 per mmBtu in July and $2.02 so far in August, analysts said output would likely decline as some producers reduce drilling activities again.
When Will Waha Natural Gas Prices Find Firm Footing in Positive Territory? -- Permian Basin benchmark Waha cash prices, mired in a protracted slump amid limited natural gas takeaway capacity and a supply glut, may see the summer come and go without relief. But a massive new pipeline is slated to enter service this fall, promising to free up an abundance of associated gas and ease pricing pressure. NGI's SoCal Citygate, Waha & Henry Hub natural gas prices versus Lower 48 production. Waha traded in negative territory through most of the spring and summer, with producers forced to pay to have excess supply taken away and often stored underground. The hub on Tuesday averaged negative 69.0 cents/MMBtu, down 2.0 cents on the day, according to NGI data. Permian supplies are driven by associated gas produced alongside oil. Crude production in the prolific basin reached record levels this year amid global demand strength and slower activity among Saudi Arabia-led OPEC and allied oil-rich countries. Overall U.S. petroleum output hit all-time highs above 13 million b/d multiple times, according to the latest U.S. Energy Information Administration (EIA) data. Nearly half of that supply came from the Permian. That remains the case in August.
Top US Oilfield Firm Halliburton Hit by Cyberattack - Top U.S. oilfield services firm Halliburton on Aug. 21 was hit by a cyberattack, according to a person familiar with the matter. The attack appeared to impact business operations at the company's north Houston campus, as well as some global connectivity networks, the person said, who declined to be identified because they were not authorized to speak on the record. Spokespeople for the company did not immediately respond to requests for comment. The company has asked some staff not to connect to internal networks, the person said. Cyberattacks have been a major headache for the energy industry. In 2021, hackers attacked the Colonial Pipeline with ransomware, causing a days-long shutdown to the major fuel supply line. That breach, which the FBI attributed to a gang called DarkSide, led to a spike in gasoline prices, panic buying and localized fuel shortages. It also created a major political headache for President Joe Biden as the U.S. economy was starting to emerge from the COVID-19 pandemic. Several major U.S. companies have suffered ransomware attacks in recent years, including UnitedHealth Group, gambling giants MGM Resorts International, Caesars Entertainment and consumer goods maker Clorox.
Pemex reports small diesel spill into Houston ship channel (Reuters) -Pollution response teams are responding to a two-gallon diesel spill into the Houston ship channel from the Pemex Deer Park refinery in Texas, the U.S. Coast Guard said on Tuesday, revising down an earlier estimate of the spill size. An estimated two gallons of diesel was discharged at Pemex’s Deer Park facility due to a flange leak, the Coast Guard said in an emailed statement, adding that the source is secured, and boom has been deployed to contain the discharge. "The diesel was partially captured by their secondary containment, with an unknown amount entering the Houston Ship Channel," it said. An earlier response from the Coast Guard had indicated 30 gallons of hydraulic oil leaked. "Our oil spill team is working to deploy oil booms to contain the spill. We have notified the appropriate government agencies," Pemex said in a community alert. Mexican national oil company Pemex operates a 312,500 barrel-per-day (bpd) oil refinery in Deer Park.
Zombie Wells: A $280 Billion Problem the U.S. Can’t Ignore - One hundred and fifty years of oil and gas production in the United States has left millions of decommissioned wells scattered around the country. While they no longer have much, if any, oil and gas to offer, the wells are still highly productive. Unfortunately, what they’re producing is a veritable pandora’s box of toxins threatening local human and environmental wellbeing.“These legacy pollution sites are environmental hazards,” declares a United States Department of the Interior site dedicated to orphan wells. “[They] jeopardize public health and safety by contaminating groundwater, emitting noxious gases like methane, littering the landscape with rusted and dangerous equipment, creating flooding and sinkhole risks, and harming wildlife.”Many of these wells – known as ‘orphan wells’ no longer have any official owner, and their proper decommissioning has therefore become the responsibility of the United States government. And while the country has made major inroads toward addressing the widespread and growing problem of orphan wells, most notably through the Biden Administration’s recent Bipartisan Infrastructure Law, which earmarks $4.7 billion just for this purpose, there is still a long way to go toward solving the issue.While private and public interests have made efforts over time to plug up and properly seal old wells so that they don’t leak harmful gasses and chemicals, about 2.6 million onshore wells remain unsealed according to a 2020 report from environmental watchdog Carbon Tracker. And those are just the ones that we know about. The report estimates that another 1.2 million undocumented wells exist nationwide. It’s projected that plugging just the 2.6 million wells we know about will cost a blistering $280 billion – meaning that the $4.7 billion allocated by the Bipartisan Infrastructure Law will barely make a dent.What’s more, many of the wells that have been plugged are now bursting open. According to Reuters reporting in West Texas, “over the last two years, more and more abandoned wells have started to spill or even gushed geyser-like, formed salt and chemical-laden lakes or caused sinkholes.” There are several possible explanations for this phenomenon.The first of which is that The Railroad Commission (RRC), which for some reason is the regulatory body that oversees oil and gas operations in Texas, has been doing a shoddy job on the sealing process. In the absence of a solvent owner of record for an abandoned oil and gas well, the RRC is legally responsible for its proper sealing.The second major issue seems to be coming from increased underground pressure from the region’s shale boom. When hydraulic fracturing is used to extract oil and gas, huge quantities of water gush out of the well along with it. This salty ‘wastewater’ contains hazardous elements like radium and boron, and is largely pumped back into the ground. But if it’s pumped too deep, it risks triggering earthquakes. And if it’s pumped too shallow, underground pressure increases, and poorly sealed wells start to blow.This has become a major issue in Texas, home to the Permian Basin, the heart of the U.S. shale revolution and the nation’s largest oilfield. Billions of gallons of wastewater have been injected into underground reservoirs there, and are likely contributing to the problem of previously plugged ‘zombie wells’ roaring back to life.While the RRC has pushed back on reports that the problem of ‘zombie wells’ is widespread, and whether their connection to wastewater injections are empirically founded, scientific evidence for the connection is building – and so is public and private scrutiny. Indeed, the U.S. Environmental Protection Agency has said that it will investigate whether there is a need to revoke the RRC’s permitting authority for disposal wells for such wastewater in response to a federal complaint filed by Texas watchdog group Commission Shift.
Federal officials begin decommissioning of old gas pipeline in New Mexico - A natural gas pipeline built in the 1940s across northern New Mexico is being decommissioned by federal officials. Some of the final restoration work is underway. The Valles Caldera National Preserve is where the retired natural gas pipeline exists and work is undereway on the third and final phase of decommissioning the line. It crosses the caldera, a large area where once a volcano exists before it exploded, leaving behind a crater that could stretch for miles or even more greater distances. This phase continues with restoring natural ecological processes to a nine-mile-long section disturbed by the pipeline corridor, including reducing erosion, reconnecting wetlands, recontouring to promote natural revegetation, and removing evidence of the access road. During this reclamation work, the project area along with trail access from the park’s east boundary will be closed for the remainder of the year. The pipeline – built in the 1940s by the US Department of Energy to transport natural gas to Los Alamos National Laboratory – was retired in 2022 and restoration efforts began that same year. The National Park Service (NPS) and New Mexico Gas Company have worked together to develop the restoration plan. This phase covers rehabilitating the landscape along the central and eastern nine miles of the pipeline route within the park, from the San Antonio Cabin area to the eastern boundary of the park. The reclamation activities, funded entirely by New Mexico Gas Company, will involve smoothing out the old roadbed, removing berms, installing water bars and plugs, removing culverts, reconnecting wetlands bisected by the route, tilling and harrowing the soil in the reclaimed sections, and replanting with native plant seeds. The entire route of the old pipeline corridor will be closed to all visitor use to allow vegetation to regrow. The NPS is working on a trail reroute for the 2025 season and will provide details early next year. The work is expected to be mostly completed by early November. The NPS will monitor the restoration effort to evaluate vegetation establishment to ensure that erosion reduction measures are successful.
Piñon Dark Horse Fire Reveals How Oil Industry Environmental ‘Solution’ Spurs Climate Crisis - - The trouble began at Piñon Midstream’s Dark Horse Treating Plant in Jal, New Mexico, on November 25, 2023, with an unexpected loud “pop” in the early afternoon, the company would later tell state regulators. A poisonous mix of flammable gasses hissed out from a pipeline feeding into the plant.Within a minute, a worker radioed in to the plant’s control room that a dense cloud of vapor had enveloped part of the plant. Within two minutes, Dark Horse was ablaze in what the company would later call an “intense and sustained fire.” Within 15 minutes, more pipes ripped open, and a towering fireball tore through the plant.Black plumes of smoke streamed over the desert and the Permian Basin shale below. An onlooker swore in Spanish as the fireball expanded across the sky, one anonymous video posted on Instagram shows. A second burst of flames erupted after dark as the fire burned on.It was two days before the first Piñon workers, wearing firefighter-style air tanks, could approach the plant’s perimeter. It was another day before the fire was fully extinguished.The November explosion involved some of the oilfield’s deadliest chemicals, though fortunately no injuries were reported from the fire.The incident offers a rare window into some of the inner workings of private oil companies while also revealing how taxpayers can wind up paying enormous subsidies to carbon capture and sequestration (CCS) operations that generate far more climate-altering pollution than they prevent.The fuel feeding into Dark Horse on the day of the explosion was a particularly dangerous mix, made up of methane gas, carbon dioxide (CO2), other fossil fuels, and poisonous hydrogen sulfide (H2S) gas — a toxic blend that oil companies nicknamed “sour gas” and “acid gas” due to the sulfur-like odor of hydrogen sulfide and CO2’s ability to acidify water. Dark Horse is designed to remove and dispose of the hydrogen sulfide and carbon dioxide contaminants so the rest of the gas can be sold. The company markets itself as the largest such project in New Mexico.Dark Horse’s anchor shipper is Ameredev II, a private-equity backed driller that’s one of New Mexico’s top 25 oil producers. In June, Matador Resources (NYSE:MTDR) announced plans to acquire Ameredev II for $1.9 billion in cash. As that deal was announced, Matador management acknowledged Ameredev II’s oil production saw disruptions at the end of 2023 due to “issues” at Piñon.State production data shows Ameredev II’s New Mexico oil production abruptly dropped by over 400,000 barrels a month in the Dark Horse fire’s aftermath — a roughly 80 percent dive.That’s enough oil to create roughly 18 times as much climate-altering CO2 pollution as the plant would have captured if it was up and running, a review of company filings and EPA emissions data by DeSmog finds.This summer, just seven months after the fire ripped through Dark Horse, the EPA approved a key “monitoring, reporting, and verification” plan for the project — a key step in enabling the company to claim carbon capture tax credits that could be worth over a quarter of a billion dollars.Tax credits for Piñon would be another way that CCS incentives are being used by the oil and gas industry to fuel fossil fuel development. The EPA’s 712-page approval makes no mention of the plant’s safety record, the fire, or its causes.Sour gas is a growing curse for the oil and gas industry. “As oil and gas wells age, the H2S levels of fields where they are located may increase,” the Texas Commission on Environmental Quality (TCEQ) warns.Some in the industry are already citing estimates that “40% of natural gas reserves are sour, with 20% being so sour they can’t be economically or technically accessed.”Certain oil wells also produce high levels of carbon dioxide gas — not the byproduct of burning oil, but carbon dioxide that was naturally trapped below ground or injected by drillers for enhanced oil recovery. And when carbon dioxide and H2S come into contact with water, they can form corrosive acids. And there’s a lot of water involved when you drill shale oil — both the salty brines that were previously trapped underground alongside the crude and the enormous volumes of water injected underground during drilling and fracking.Producers tend to avoid sour gas-tainted oil because when there’s enough H2S and CO2 in the mix, you need specialized equipment to remove those deadly and corrosive gasses. That adds costs and creates a single point of failure that can throw a wrench in production from multiple wells.A small handful of Permian drillers nonetheless seem determined to tap oil deposits contaminated with particularly high levels of sour gas, reserves hazardous or expensive enough to scare off other producers.Piñon offers a uniquely important service for those drillers. The Dark Horse plant is designed to siphon off carbon dioxide and hydrogen sulfide, turning gas considered too sour to sell into a “sweetened” fossil fuel blend that pipeline companies will accept for shipment. Dark Horse “unlocks previously challenged resource development” in Lea County, New Mexico, and in Texas’ Winkler and Loving counties, Black Bay Energy Capital, a private equity company backing Piñon, says on its website.The company injects the removed carbon and hydrogen sulfide waste deep underground, via a pair of disposal wells — meaning that even though it doesn’t get its carbon from burning fossil fuel, what Dark Horse does is considered carbon capture and sequestration. Supporters of CCS have predicted that tax credits — massively increased when the Inflation Reduction Act became law in September 2022 — will ultimately aid the fight against climate catastrophe. By creating a market for carbon, companies burning fossil fuels for power or working in “hard to abate” industries will be incentivized to capture their carbon emissions, ultimately reducing climate-altering pollution, advocates say. So far, that’s not what’s happening. Instead, most of today’s captured carbon comes from natural gas processors like Piñon. “The majority of CO2 being captured today is not captured from power plants or industrial processes like steel or cement, which is how CCS is often marketed,” a November 2023 report from Oil Change International found. “Instead, 67% of CO2 captured today comes from gas processing plants.”
Newsom vetoes bill to strengthen air pollution monitoring near refineries --California Gov. Gavin Newsom (D) on Monday vetoed a bill aimed at tightening air pollution monitoring provisions for so-called fence-line zones that mark the perimeter of oil refineries. “While I share the author’s desire to protect communities from air pollution, local air quality management districts are already carrying out the necessary action to do just that,” Newsom said in his veto message.The bill in question, SB 674, would have updated air monitoring protocols for fence-line zones to include facilities beyond petroleum refineries and would require these sites to maintain records of data collection for at least five years.Refineries included under the bill’s provisions would have been those that produce gasoline, diesel fuel, aviation fuel, biofuel, lubricating oil, asphalt, petrochemical feedstock and other similar products, per the legislation.These facilities would have been subject to third-party audits, quarterly reports and mandates to complete root cause analyses within 24 hours of any incident. State Senate Majority Leader Lena Gonzalez (D), who sponsored the bill, described Newsom’s veto as “a devastating blow to the years of hard work and advocacy by communities affected by refinery air pollution,” according to a Monday statement.“ Fenceline communities urgently need improved air monitoring, and it shouldn’t be this difficult to establish a system that provides them with the most basic necessities — transparency and information about the toxic chemicals being released into their neighborhoods,” Gonzalez said. A press release from the state senator’s office touted the bill’s ability to establish a statewide air monitoring standard, which could have ensured that best practices were being used to prevent dangerous outcomes in these areas. “I am deeply disappointed by this outcome, but we cannot walk away from this issue,” Gonzalez added. “Our communities demand and deserve stronger protections.” Oscar Espino-Padron, a senior attorney for Earthjustice’s community partnerships program,said in a statement that he viewed the veto as “a missed opportunity to enact meaningful change that could have saved lives and improved public health.”
Woodfibre LNG Construction Advances for 2027 Startup - As concrete pouring and substantial site preparation begins at the Woodfibre LNG project in British Columbia (BC), project partners are targeting for the facility to be Canada’s second operational terminal. Touted as one of the world’s lowest greenhouse gas emitting liquefied natural gas export projects, Woodfibre is designed to access Western Canada’s prolific natural gas reserves to send more volumes on an abbreviated route to Asian customers from the Pacific Coast. Early construction began in the fall of 2022, and work began last year on the first out of 18 Chinese fabricated modules that would make up the LNG project. All modules are scheduled to arrive by fall 2025. “Once the facility is up and running, it will have the capacity to liquefy up to 2.1 million tonnes of LNG per year (mmty) and store up to 250,000 cubic meters,” Woodfibre spokesperson Sean Beardow told NGI. “Under normal conditions, the project expects to load one ship approximately every 10 days.”
Pilot Launching Mexico LNG Terminal With Sights on Bunkering Opportunities in North and Central America --Houston-based Pilot LNG LLC plans to develop a liquefied natural gas bunkering and transshipment The company said it would develop Salina Cruz LNG in a joint venture (JV) with Houston-based affiliate GFI LNG LP, which has sold commodities in Mexico for more than 20 years. The facility would be near Salinas Del Marqués and Salina Cruz in Oaxaca state. On the Pacific side of the Panama Canal, the facility would be positioned to supply North and Central American bunker and fuel markets, the JV said.
An oil spill occurs off the Caribbean coast of Venezuela - An oil spill from the El Palito refinery in Venezuela polluted a bay in the Caribbean Sea. An oil slick covering an area of about 225 km² covered the Morrocoy National Park and affected coastal areas. A few days ago, Venezuela's El Palito oil refinery allegedly spilled oil that polluted a bay off Venezuela's north-central coast in the Caribbean Sea. This was reported by Reuters on Saturday by five sources, UNN reports. Biologist Eduardo Klein has published satellite images on X that he says show an oil slick of about 225 square kilometers (87 square miles) in the Golf Triste that completely covers the Morrocoy National Park, known for its palm-lined beaches and mangrove trees. Neither the state-owned company Petroleos de Venezuela PDVSA nor the Ministry of Oil had any comments. The El Palito refinery, with a capacity of 146,000 barrels of crude oil per day, is the smallest refinery in Venezuela and is located in the municipality of Puerto Cabello on the coast of the central state of Carabobo. “The spill came from El Palito. This morning, some beaches in Boca de Aroa woke up with a lot of hydrocarbons on the shore and it affected some boats, some artisanal fishing boats,” one source told Reuters. Another source reported seeing three large oil slicks that had washed ashore.
Global LNG: Asia spot prices ease from 8-month top on weaker demand - Asian spot liquefied natural gas (LNG) prices eased this week from a more than eight-month top on the back of easing spot demand and as European gas prices also fell. The average LNG price for October delivery into north-east Asia was at $13.80 per million British thermal units (mmBtu), industry sources estimated, down from $14.10/mmBtu last week. Despite hot weather in east Asia driving up gas consumption for power demand, the higher prices limited buying from some importers in the region. Asian LNG prices could continue to drop next week as well, said Ana Subasic, natural gas and LNG analyst at data and analytics firm Kpler. “While there may be some spot demand from Japan and South Korea due to high power sector gas consumption, price-sensitive buyers in South and Southeast Asia are expected to hold off on purchases until prices fall,” she said. “Recently, buyers in India and Thailand have failed in awarding spot tenders,” she added. The price declines come despite supply disruptions from one of the two trains at Australia’s Ichthys LNG plant in Darwin this week, its second outage in the past month. In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in October on an ex-ship (DES) basis at $12.047/mmBtu on Aug. 22, a $0.15/mmBtu discount to the October gas price at the Dutch TTF hub. Argus assessed it at $12.00/mmBtu, while Spark Commodities assessed the September price at $11.794/mmBtu. Europe gas prices eased on Friday amid cooler temperatures and weak renewables generation. Temperatures across Europe are also seen dropping this weekend, said Kpler’s Subasic, adding that strong renewable power generation is likely to reduce the need for gas-fired power. Meanwhile, U.S. feedgas flows have been stable, while regulatory filings show Corpus Christi’s stage 3 and the Plaquemines terminals are stepping closer to first feedgas receipts and first LNG production, in line with their planned start-up dates, said Samuel Good, head of LNG pricing at commodity pricing agency Argus. On LNG freight, Atlantic rates fell for a second straight week to $61,500/day on Friday, said Spark Commodities analyst Qasim Afghan. This is the biggest week-on-week decrease in over a month, and marks an over $15,000 decline in the last two weeks, he added. Pacific rates also declined, easing to $78,750/day.
What’s the Outlook for Global LNG Market This Winter? — Listen Now to NGI’s Hub & Flow -- Click here to listen to the latest episode of NGI’s Hub & Flow. Susan Sakmar, a visiting law professor at the University of Houston Law Center and a board member at Flex LNG Ltd., covers the state of the global liquefied natural gas market at the end of summer with NGI’s LNG Managing Editor Jamison Cocklin. The two discuss the geopolitical tensions and supply security issues that are likely to factor heavily into the winter heating season. The conversation covers the recent court decision impacting Rio Grande and Texas LNG projects that could have far-reaching impacts for other export terminals under development. Sakmar and Cocklin also review some of the key events that have shaped the market in recent years, and how they’re likely to influence its future. Believing that transparent markets empower businesses, economies and communities, NGI – which publishes daily, weekly and monthly natural gas indexes at pricing points across North America – works to provide natural gas price transparency for the Americas. NGI’s Hub & Flow podcast is a part of that effort.
Arrow Energy to Develop Additional Feed Gas for Queensland Curtis LNG -- Shell plc and PetroChina Co. Ltd. are moving ahead with plans to develop the second phase of the Surat Gas project in Queensland, Australia. Arrow Energy, a joint venture formed by the companies in 2010, would develop the onshore project in the eastern part of the country. Phase 2 would produce 22,400 boe/d, or about 130 MMcf/d of natural gas. Those volumes would be used to feed the 8.5 million metric tons/year Queensland Curtis LNG (QCLNG) facility near Gladstone, as well as domestic customers in the region. Arrow signed a 27-year gas supply agreement with QCLNG in 2017.
Russian Natural Gas Flows Continue Through Ukraine, Lowering Price Volatility For Now – A rally in global natural gas prices cooled as traders eye the latest signs of volatility on the Russian-Ukrainian border, but searing heat and a possible spike in Asian demand are still lurking. Several days after Ukrainian forces pushed into Russian territory and captured a key pipeline gas intake point in Sudzha, contract prices have slightly retreated or floated around the same levels in some cases. “All eyes on the gas market remain on the situation in Southern Russia following the Ukrainian offensive earlier this month, which has led to fighting close to the important pipeline which transports Russian gas to Southern Europe,” analysts with energy trading firm Energi Danmark wrote in a note. “The market has for long feared that the pipeline could be damaged but for now, this has not happened yet.”
Polish leader urges Nord Stream patrons to 'keep quiet' as pipeline mystery returns to spotlight— Polish Prime Minister Donald Tusk on Saturday reacted to reports that revived questions about who blew up the Nord Stream pipelines in 2022, saying the initiators of the gas pipeline project should "apologize and keep quiet." That comment came after one of his deputies denied a claim that Warsaw was partly responsible for its damage. The Wall Street Journal reported on Thursday that Ukrainian authorities were responsible for blowing up the Nord Stream 1 and 2 pipelines in September 2022, a dramatic act of sabotage that cut Germany off from a key source of energy and worsened an energy crisis in Europe. Germany was a partner with Russia in the pipeline project. Poland has long said its own security interests have been harmed by Nord Stream. “To all the initiators and patrons of Nord Stream 1 and 2. The only thing you should do today about it is apologise and keep quiet,” Tusk wrote on the social media portal X Saturday. Tusk appeared to be reacting specifically to a claim by a former head of Germany’s foreign intelligence agency, BND, August Hanning, who told the German daily Die Welt that the attack on the Nord Stream gas pipelines must have had Poland’s support. Hanning said Germany should consider seeking compensation from Poland and Ukraine. Hanning, who retired from his spy chief job, did not provide any evidence in support of his claim. Some observers noted that he served under former German Chancellor Gerhard Schroeder, who went on to work later for Russian state-owned energy companies, including Nord Stream. Krzysztof Gawkowski, a deputy Polish prime minister and the minister of digital affairs, strongly denied reports that Poland and Ukraine had damaged the Nord Stream gas pipeline in an interview Friday on the Polsat broadcaster. Gawkowski alleged that the comments of the former member of the German intelligence service were “inspired by Moscow” and were aimed at destabilizing NATO countries. “I believe that this is the sound of Russian disinformation,” he added. On Wednesday, Polish prosecutors confirmed that they had received a warrant for a Ukrainian man wanted by Germany as a suspect in the pipeline attack, but that he left the country before he could be arrested. The Nord Stream project, with its two pipelines created to carry gas from Russia to Europe along the Baltic Sea bed, went ahead despite opposition from Poland, the U.S. and Ukraine. They allowed Russia to send gas directly to Western Europe, bypassing Poland and Ukraine. With all gas previously going over land, Warsaw and Kyiv feared losing huge sums in transit fees and political leverage that came with controlling the gas transports. The Wall Street Journal said in its report published Thursday that it spoke to four senior Ukrainian defense and security officials who either participated in or had direct knowledge of the plot. All of them said the pipelines were a legitimate target in Ukraine’s war of defense against Russia. Ukrainian authorities are denying the claims. Nord Stream 1 was completed and came online in 2011. Nord Stream 2 was not finished until the fall of 2021 but never became operational due to Russia’s full-scale invasion of Ukraine in February 2022.
Experts suspect Chinese hand behind Finland-Estonia gas pipeline damage -- Western officials and analysts are suspicious about the involvement of a Chinese container ship in damaging the Balticconnector Gas Pipeline, a vital Baltic Sea gas pipeline linking Estonia and Finland, reported Voice of America (VOA). The incident occurred in October last year. According to the Chinese government, the damage was caused by a Hong Kong-registered ship called Newnew Polar Bear. However, Beijing has attributed the destruction to an oceanic storm, despite reports that no such storm occurred, Voice of America reported. This discrepancy has raised concerns and suspicions among experts who are investigating the incident. In an interview on August 13 with Estonia public radio, ERR, Estonian Defense Minister Hanno Pevkursaid he was sceptical of China (/topic/china)'s claim that a storm caused the incident, Voice of America reported. "Personally, I find it very difficult to understand how a ship's captain could fail to notice for such a long time that its anchor had been dragging along the seabed, but it is up to the prosecutor's office to complete the investigation," he said. Markku Mylly, the former director of the European Maritime Safety Agency, also claimed that the capital of Finland, Helsinki had witnessed no storms in the Gulf of Finland at the time. Reportedly, a Finnish newspaper, 'Iltalehti' had also consulted data from the Finland (/topic/finland) Meteorological Institute and confirmed Mylly's claims. Meanwhile, Pevkur in a statement to ERR had mentioned that Estonia (/topic/estonia) will not give up claims against China (/topic/china) for compensation of the damage, VOA reported. According to the VOA report, the Baltic Sea oil and gas pipeline (/topic/gas-pipeline) between both countries was built with EU's assistance and was commissioned in 2019 at a cost of around USD 331 million, to detach Finland (/topic/finland), Estonia (/topic/estonia), Latvia, and Lithuania's dependence on Russia for natural gas.
Oil Cargo Transfer: Philippines begins transfer of oil cargo from sunken tanker -- The Philippines said Wednesday it began retrieving 1.4 million litres of industrial fuel oil from a sunken tanker off Manila Bay that for weeks has threatened to cause an environmental disaster. One of the worst oil spills in Philippine history occurred in February 2023, when a tanker carrying 800,000 litres of industrial fuel oil sank off the central island of Mindoro.The Philippines said Wednesday it began retrieving 1.4 million litres of industrial fuel oil from a sunken tanker off Manila Bay that for weeks has threatened to cause an environmental disaster. The Philippine coast guard said a private company is transferring the cargo, an operation the government earlier indicated could take one week to complete. "The syphoning operation for the first tank is ongoing," a coast guard media officer told reporters. The Filipino-flagged tanker capsized and sank off Manila on July 25, killing one crew member as the ship tried to return to port amid bad weather fuelled by Typhoon Gaemi. It was carrying eight tanks of industrial fuel oil when it sank. Advt It took authorities three weeks to control the spillage of the cargo and install the equipment to remove the fuel oil from the vessel that now rests at the bottom of the bay about 34 metres (112 feet) below the waves. The coast guard had warned the release of the cargo onto the bay would be an "environmental catastrophe" and the country's worst oil spill. The coast guard later said the spillage has been minimal, but local governments nonetheless imposed "no-catch" zones affecting tens of thousands of fishermen in the bay. The Bureau of Fisheries and Aquatic Resources has urged the public to "exercise caution when consuming fish from the affected areas due to the risk of petrochemical contamination". One of the worst oil spills in Philippine history occurred in February 2023, when a tanker carrying 800,000 litres of industrial fuel oil sank off the central island of Mindoro. Diesel fuel and thick oil from that vessel contaminated the waters and beaches along the coast of Oriental Mindoro province, devastating the fishing and tourism industries. The oil dispersed over hundreds of kilometres of waters famed for having some of the most diverse marine life in the world.
Iran’s natural gas grid expanded by 53,000 km since 2021 --CEO of the National Iranian Gas Company (NIGC) says the gas grid in the country has expanded by 53,000 kilometers in the past three years. Majid Chegeni said on Sunday that Iran had built more than 1,800 kilometers of new high pressure gas transmission pipelines since August 2021 when the outgoing government took office. Chegeni said the number of gas grid customers in Iran had increased by nearly a million over the past three years, adding that some 50 new cities and 6,800 villages had also been connected to the country’s nationwide gas pipeline network over the same period. Natural gas became available to 24 new power plants and 21,000 industrial units across Iran over the past three years, he said, adding that the NIGC had also built seven new pumping stations with 24 compressors to power long-distance gas pipelines in the country. Iran is one of the four largest producers and consumers of natural gas in the world. The country injects more than 850 million cubic meters per day of natural gas to its nationwide grid during cold winter months. Total gas output in Iran has exceeded 1 billion cubic meters per day, a bulk of which comes from South Pars, the world’s largest gas field which is located on the maritime border between Iran and Qatar in the Persian Gulf. Chegeni’s comments on Sunday came during a ceremony to inaugurate a 176-kilometer gas pipeline in eastern Iran where the NIGC has been carrying out projects to boost gas supplies to households and industries in the region. A report on the Iranian Oil Ministry’s news website said that the government had spent 72 trillion rials ($124.1 million) on the pipeline connecting Dashtak in Sistan region to Nehbandan in the South Khorasan province.
Oil dips on concerns over China demand drop, Middle East ceasefire talks; Brent crude at $79.55/bbl -- Oil prices declined in early Asian trading on Monday, influenced by concerns over weaker demand in China, the world's largest oil importer. Market sentiment was also affected by investor attention on the progress of ceasefire talks in the Middle East, which could potentially lower supply risks. By 0032 GMT, Brent crude futures fell by 13 cents, or 0.2%, to $79.55 per barrel, while U.S. West Texas Intermediate (WTI) crude futures also decreased by 13 cents, or 0.2%, to $76.52 per barrel. “Crude oil futures continue to see high price swings and are currently down 0.5%, as focus remains on developments in the middle-east conflict and the progress of ceasefire talks. Also in focus will be China's prime loan rate decision on Tuesday and the weekly oil inventory data on Wednesday," . Both benchmarks dropped by nearly 2% last Friday as investors scaled back their expectations for demand growth from China. However, they ended the week relatively flat compared to the previous week, thanks to U.S. data indicating moderating inflation and strong retail spending. On Thursday, data from China indicated a slowdown in its economy in July, with new home prices dropping at the fastest rate in nine years, a decline in industrial output, and rising unemployment. This heightened concerns among traders about reduced demand from China, where refineries significantly lowered crude processing rates last month due to weak fuel demand. Meanwhile, U.S. Secretary of State Antony Blinken arrived in Tel Aviv on Sunday for another Middle East tour aimed at securing a ceasefire in Gaza. However, Hamas cast doubt on his mission by accusing Israel of undermining his efforts. Despite months of intermittent negotiations, mediating countries—Qatar, the United States, and Egypt—have yet to bridge enough differences to reach an agreement, and the violence in Gaza continued on Sunday.
Oil Prices Tumble on Economic Concerns and Diplomatic Developments - While the oil markets were on the defensive at the start of trading Sunday night and into early Monday, based on the economic malaise that continued to be reflected in the economic statistics coming out of China late last week and again over the weekend, the market posted a sharp sell off at midday as news of further progress being made in the Gaza ceasefire talks. With the reports of Israeli agreement to accept the ceasefire proposal suggested by the U.S., crude oil prices fell over $1.50 per barrel in just under 60 minutes of trading this afternoon and September WTI settled at $74.37 per barrel, down $2.28, posting its lowest settlement since August 6th. The bearish move was even greater in the products markets with September gasoline market off 4.49 cents and the spot heating oil contract off 6.25 cents. The technical damage was greater in the product markets as the September gasoline contract reached lows not seen since February of this year while the September distillate contract dropped to its lowest settlement since June 23rd of last year. U.S. Secretary of State Antony Blinken on Monday called the latest diplomatic push by Washington to achieve a ceasefire deal in Gaza “probably the best, maybe the last opportunity” and urged all parties to get the agreement over the finish line. The talks towards a ceasefire that has been going on for months are set to continue this week in Cairo, following a two-day meeting in Doha last week. The U.S. Secretary of State will intensify U.S. diplomatic pressure to ensure negotiators secure a breakthrough later this week after the U.S. put forward last week bridging proposals that the mediating countries believe would close gaps between the warring parties. Monday afternoon Secretary Blinken said following his constructive meeting with Israeli Prime Minister Netanyahu today, the prime minister confirmed his administration would accept and support the bridging ceasefire proposal put forth by the U.S. Reuters is reporting that production from Libya’s Sharara oilfield has risen back to 85,000 b/d, as operators appear to be seeking to supply the Zawia oil refinery. The field had been producing some 300,000 b/d before NOC declare a force majeure event back on August 7th following a political issue that prompted protesters to blockade the facility. IIR Energy said U.S. oil refiners are expected to shut in about 389,000 bpd of capacity in the week ending August 23rd, increasing available refining capacity by 99,000 bpd. Offline capacity is expected to fall to 298,000 bpd in the week ending August 30th. The U.S. National Hurricane Center is currently not expecting any other tropical cyclone development in the Atlantic basin for the next seven days. But longer range model guidance is beginning to show the possibility of a robust tropical wave to push off the coast of Africa next weekend and will be entering an area where environmental conditions are expected to be quite favorable for development. The model guidance has this system approaching the Leeward Islands by the end of next week and then continuing to move westward the following week. The long range models also are indicating the Gulf of Mexico could also be an area of additional tropical development next week as well.
Oil falls by more than $2 a barrel on Gaza ceasefire talks and weak Chinese economy (Reuters) - Oil prices fell by more than $2 a barrel Monday on the prospect of successful Middle Eastern peace talks reducing supply risks, while leading oil importer China's economic weakness threatened to curb demand. Brent crude futures settled at $77.66 a barrel, dropping $2.02, or 2.5%. U.S. West Texas Intermediate crude futures settled at $74.37 a barrel, falling $2.28, or 3%. "This market is under pressure under expectations that they're going to continue to hammer away at the ceasefire talks," U.S. Secretary of State Antony Blinken on Monday said the latest diplomatic push by Washington to achieve a ceasefire deal in Gaza was "probably the best, maybe the last opportunity" and implored all stakeholders to get the agreement over the finish line. Israeli Prime Minister Benjamin Netanyahu's office said the he "reiterated Israel's commitment to the latest American proposal regarding the release of our hostages - taking into account Israel's security needs." "Much of the past week's selling across the energy complex has represented a reduction in Mideast risk premium," said Jim Ritterbusch, of Ritterbusch and Associates in Florida. China's economic problems also pressured oil prices, with data last week showing new home prices falling at the fastest pace in nine years. Chinese refineries sharply cut crude processing rates last month in response to weak fuel demand. Both crude benchmarks fell nearly 2% on Friday as investors tempered their Chinese demand growth expectations, but ended the week largely unchanged after U.S. data showed inflation was moderating despite robust retail spending."Persistent concerns about slow demand in China led to a sell-off," said Hiroyuki Kikukawa, president of NS Trading, adding that the approaching end of peak driving season in the United States was another factor weighing on prices.However, supply risks from continued tensions in the Middle East and escalation of the Russian-Ukraine war are underpinning the market, he said. Energy investors also awaited clues on the U.S. Federal Reserve's next interest rates decision.A slim majority of economists polled by Reuters said they expected that the Fed would cut interest rates by 25 basis points at each of the remaining three meetings this year, one more reduction than predicted last month, and that a recession was unlikely.
Oil prices hover near two-week low over easing MidEast tensions, weak China data; Brent at $77/bbl -- Global crude oil prices declined on Tuesday, August 20, hovering near a two-week low as Middle East supply concerns eased after Israel accepted a proposal to tackle disagreements blocking a ceasefire deal in Gaza and as economic weakness in China weighed on the country's fuel demand. China is one of the top consumers of crude oil apart from India. Brent futures for October delivery fell 27 cents, or 0.4 per cent, to $77.39 a barrel. US West Texas Intermediate (WTI) crude for September fell 21 cents, or 0.3 per cent, to $74.16 on its last day as the front-month. The more actively traded WTI futures for October, which will soon become the front month, were down about 27 cents to $73.39 per barrel.
- -Analysts said that they expect a volatile session today as efforts toward an Israeli/Gaza ceasefire appear to be gaining enough traction to announce an official deal. US Secretary of State Antony Blinken visited Egypt and pushed for progress toward a Gaza ceasefire and hostage release deal. Other major differences still need to be resolved in talks this week.
- -According to analysts, despite ongoing ceasefire negotiations, clashes between Israel and Hamas continue, and the markets will remain highly sensitive to any developments in the region. If the market fundamentals don't break this bearish trend, OPEC may hesitate to unwind their voluntary cuts anytime soon.
- -OPEC, the Organization of the Petroleum Exporting Countries (OPEC), and allies like Russia have said global oil demand growth must accelerate in the coming months. Otherwise, the market will struggle to absorb the group's planned increase in supply from October.
- -OPEC member Saudi Arabia, the world's biggest oil exporter, said crude exports fell to 6.047 million barrels per day (bpd) in June from 6.118 million bpd in May. Data from China, the world's second-largest economy, showed that new home prices fell in July at their fastest pace in nine years, industrial output slowed, export and investment growth dipped, and unemployment rose.
- -Analysts said that the main culprit is China, whose economic struggles are mirrored in falling product export figures, sluggish refinery runs and waning thirst for foreign crude oil. US prices for heating oil futures fell to their lowest since May 2023 for a second straight day. The heating oil crack spread, which measures refining profit margins, stayed near its lowest since November 2021.
- -Prices for US gasoline futures fell to their lowest since February 2024. According to news agency Reuters, analysts projected US energy firms pulled about 2.9 million barrels of crude out of storage during the week ended August 16.
- -If correct, that would be the seventh time US crude stocks declined in the past eight weeks. There was a withdrawal of 6.1 million barrels during the same week last year and an average decrease of 3.4 million barrels over the past five years (2019-2023).
WTI crude oil fell three per cent yesterday, dropping to $74.20 per barrel, weighed down by concerns about reduced demand from top importer China and the prospect of easing supply disruptions amid ongoing ceasefire talks. According to analysts, China produced 6.1 per cent less fuel in July than the previous year, marking the fourth consecutive monthly decline, owing to weak fuel demand and lower profit margins. ‘’China's oil processing rate fell to approximately 13.91 million barrels, the lowest level since October 2022. US Secretary of State Antony Blinken announced that Israel has agreed to a ceasefire proposal for Gaza, with the next step dependent on Hamas's acceptance of the plan aimed at de-escalating the long-standing conflict,''
The Market Appeared to Bounce During the Morning on the News of a Continued Fighting in Gaza - The oil markets acted nervously on Tuesday. While the overriding theme in the markets continued to be the economic malaise in China and the potential progress in a ceasefire deal for the fighting in Gaza, the market appeared to bounce during the morning on the news of continued fighting in Gaza and the retrieval of the bodies of six hostages that had been held in Gaza by Hamas. But this rally was short-lived as it appeared the potential ceasefire deal was still alive as Secretary Blinken shuttled between Israel, Egypt and Qatar all in the last 24 hours.The WTI options market appeared to reflect the nervous uncertainty in the market today as the two most active option strikes were the October $70 put and the October $80 call, as it appeared traders were seeking protection if the market made a substantial move in either direction. U.S. Secretary of State Antony Blinken traveled to Egypt and Qatar on Tuesday, pushing for areas of possible progress on a Gaza ceasefire and hostage release deal in talks planned for later this week. He arrived in Egypt from Tel Aviv, where he said Israeli Prime Minister Benjamin Netanyahu had accepted a U.S. “bridging proposal” aimed at narrowing the gaps between the two sides after talks last week paused without a breakthrough. At the end of the day he was reported to have arrived in Qatar as he continued his efforts in seeking an agreement He urged Hamas to also accept the proposal as the basis for more talks. The Palestinian militant group has not definitively rejected the proposal, but has said it backtracks from areas previously agreed and has accused Israel and its U.S. ally of spinning out the negotiations process in bad faith.According to General Administration of Customs data, China’s fuel oil imports fell for a third consecutive month in July. China’s fuel oil imports in July totaled 1.38 million metric tons or about 282,000 bpd, 8% lower than in June and 9% down from a year earlier. Meanwhile, fuel oil export volumes for bunkering totaled 1.66 million tons in July, up 5% from June and 8% higher than in the corresponding month last year.Goldman Sachs in a research note to clients this week noted that “soft china oil demand and downside risks to China GDP growth strengthen our view that risks to our $75-$90 range for Brent in 2025 skew to the downside.” The investment bank now expects Brent falling to $68 per barrel by late 2025 versus a $81 base case if Chinese oil demand remains flat. Goldman saw Chinese oil demand growing by only 200,000 b/d over the first six months of the year, while demand this summer has turned negative versus a year ago.Norway’s Equinor has begun work to resume output at its Gullfaks C oil and gas platform in the North Sea after a shutdown on Sunday. The incident was caused by problems with one of the platform’s wells, adding that the Gullfaks A and B platforms were running as normal. Late on Monday, Equinor tested the well and concluded that the situation had normalized.Kpler data is estimating EU and UK gasoline exports have reached 981,000 b/d so far in August, well below July’s 1.21 million b/d exported in July.
U.S. crude oil holds at roughly $74 per barrel after selling off on softer demand - U.S. crude oil futures fell to roughly $74 per barrel Tuesday, after selling off in the previous session amid demand worries in Asia and cease-fire talks in the Middle East."We are seeing oil prices mean reverting on the back of frankly a lot more supply but also softer demand," Francisco Blanch, commodity strategist at Bank of America, told CNBC's "Fast Money" on Monday."Oil is really trading on supply and demand fundamentals and we have a bit of an air pocket right now with China slowing down here," Blanch said. U.S. crude and Brent prices have fallen 9.2% so far this quarter. Here are Tuesday's closing energy prices:
- West Texas Intermediate September contract: $74.04 per barrel, down 33 cents, or 0.44%. Year to date, U.S. crude oil has gained 3.2%.
- Brent October contract: $77.20 per barrel, down 46 cents, or 0.59%. Year to date, the global benchmark is flat, up just 0.2%.
- RBOB Gasoline September contract: $2.25 per gallon, down less than 1 cent, or 0.33%. Year to date, gasoline is up 7.4%.
- Natural Gas September contract: $2.19 per thousand cubic feet, down more than 3 cents, or 1.6%. Year to date, gas is down 12.6%.
U.S. Secretary of State Antony Blinken is in the Middle East, where he is making a renewed push to reach a cease-fire deal in Gaza and return hostages held by Hamas. Blinken said Israeli Prime Minister Benjamin Netanyahu had accepted a bridging proposal and called on Hamas to do the same.But Hamas leader Yahya Sinwar views the latest round of cease-fire talks as a bluff to give Israel additional time to wage war in Gaza, Arab mediators told The Wall Street Journal. He hopes to pressure Israel by launching attacks from the West Bank, the mediators told the Journal.Oil prices have pulled back as Iran has refrained so far from attacking Israel in response to the assassination of a Hamas leader in Tehran in late July. The U.S. hopes a cease-fire deal in Gaza can prevent a wider war in the region."The market is really to some extent wrongly assuming that this geopolitical risk is gone," Amena Bakr, senior research at Energy Intel, told CNBC's "Capital Connection" on Tuesday.
Oil Ticks Higher as EIA Reports Inventory Draws Across the Board - Crude oil prices moved higher today after the U.S. Energy Information Administration reported a decline in inventories for the week to August 16.Those shed 4.6 million barrels over the period, compared with a build of 1.4 million barrels that surprised traders last week.On Tuesday, the American Petroleum Institute reported another unexpected inventory increase, but a moderate one, at 347,000 barrels.In fuels, the EIA also estimated draws in inventories.Gasoline inventories fell by 1.6 million barrels over the week to August 16, which compared with a draw of 2.9 million barrels for the previous week.Gasoline production averaged 9.8 million barrels daily last week, which compared with 9.7 million barrels daily for the previous week.In middle distillates, the authority reported an inventory draw of 3.3 million barrels for the week to August 16, which compared with a draw of 1.7 million barrels for the previous week.Middle distillate production last week averaged 4.9 million barrels daily, which compared with 4.8 million barrels daily for the previous week.Oil prices meanwhile remain depressed, with API’s inventory report becoming the latest contributing factor despite the modest size of the estimated build. In addition to that, hopes of a ceasefire in the Middle East also weighed on oil prices as they reduced the risk of a supply disruption, and the perception of weak Chinese demand remained stable.“While weaker Chinese demand has been well reported, refinery margins around the globe have been under pressure for much of August, suggesting that these demand concerns are not isolated to just China,” ING analysts said, as quoted by Reuters, suggesting there could be more pain for oil bulls ahead.On the other hand, “We think any fall in oil prices tied to a Gaza truce will likely be short lived,” Commonwealth Bank of Australia analyst Vivek Dhar told Bloomberg, adding that this was because the actual chances of a ceasefire being signed by Israel and Hamas were slim.
Oil Prices Hit New 2024 Low as US ‘Jobs Cut’ Scare Offsets Crude Draws (Sputnik) - Crude prices hit 2024 lows on Wednesday as a downward revision in US jobs numbers sparked concerns about the economy that offset strong weekly consumption numbers for oil in the United States. West Texas Intermediate (WTI), the benchmark for US crude, settled down $1.24, or 1.7%, at $71.93 per barrel, adding to its 5.5% decline over the past three sessions. Earlier on Wednesday, WTI sank to $71.47, its lowest since a December bottom of $71.41. Year-to-date, the US crude benchmark is up 0.1%, after rallying 22% at one point. UK-origin Brent finished the New York session down $1.15, or 1.5%, at $76.05 per barrel, adding to its 4.7% tumble over three prior sessions. Earlier in the day, Brent tumbled to a November low of $74.79. Year-to-date, the global crude benchmark is down 1.5%, after running up some 20% earlier. The freefall in crude prices continued despite the US Energy Information Administration reporting an across-the-board draw in crude and fuel stockpiles for the just-ended week. Crude inventories fell by 4.649 million barrels during the week that ended on August 16, reversing the prior week’s build of 1.357 million, which itself came after a decline of some 30 million barrels over six straight weeks. Gasoline stockpiles fell 1.606 million barrels for the week to August 16, adding to the prior week’s draw of 2.894 million. Distillate stockpiles tumbled by 3.312 million, after the previous week’s deficit of 1.673 million. Gasoline is the primary motor fuel in the United States and makes up the largest component of the country’s energy mix. “The market is raising questions about a major downward revision in US jobs numbers [that] may suggest that the Fed was behind the curve in rate cuts,” Phil Flynn, energy analyst at the Price Futures Group in Chicago, said. Earlier on Wednesday, the US Labor Department said it has revised down by 818,000 the jobs growth it originally reported for the 12 months to March, citing a “statistical error.” Prior to the revision, initial payroll figures indicated an addition of some 2.9 million total jobs during the year to March, or an average of 242,000 per month. With the revision, the monthly pace of growth is at around 174,000 - still robust though a moderation from the post-COVID-19 peak of job growth, economists said.
The Oil Market Traded Lower on Wednesday Following a Downward Revision to U.S Employment Growth -The oil market traded lower on Wednesday following a downward revision to U.S. employment growth and outweighed the session’s early gains attributed to the draws in crude and products stocks. The revision to U.S. nonfarm payrolls added fuel to increasing concerns for global economies. The U.S. added 818,000 fewer jobs than previously reported from the spring of 2023 to the spring of 2024. The government’s revised estimate of employment growth showed the U.S. gained about 2.1 million jobs from April 2023 to March 2024, compared with the previously reported 2.9 million increase. The crude market traded mostly sideways and posted a high of $74.16 as the EIA reported draws in crude stocks of over 4 million barrels and draws in product stocks. However, the market gave up its gains and sold off to a low of $71.46 ahead of the close. The October WTI contract settled down $1.24 at $71.93 and the October Brent contract settled down $1.15 at $76.05. The product markets ended the session in negative territory, with the heating oil market settling down 1.35 cents at $2.2497 and the RB market settling down 5.13 cents at $2.2050.U.S. crude oil export gains should plateau in 2024 after years of strong growth, with domestic output expected to increase by the smallest amount since the pandemic at a time when global oil demand remains low. According to U.S. government data, crude oil exports from U.S. ports averaged about 4.2 million bpd so far this year. That was up 3.5% from a year earlier or the lowest percentage increase since 2015, when the U.S. exported its first cargo of domestic crude oil after a 40-year federal ban on export of domestic crude ended. Last year, exports grew 13.5%. They have grown every year except in 2021 when COVID-19 crushed global oil demand. U.S. oil production is set to grow just 2.3% this year, as shale producers remain focused on shareholder returns and limit new spending on production. Offshore production is expected to rise this year on new project startups, such as Chevron’s Anchor platform in the Gulf of Mexico. However, output is expected to ramp slowly over several years, meaning exports this year will not benefit.IIR Energy said U.S. oil refiners are expected to shut in about 389,000 bpd of capacity in the week ending August 23rd, increasing available refining capacity by 99,000 bpd. Offline capacity is expected to fall to 298,000 bpd in the week ending August 30th.BP has scheduled a shutdown of its 435,000 b/d refinery in Whiting for maintenance in September.According to company filings, Enbridge is cutting tolls on Canadian oil export pipelines in the wake of increased competition from the recently opened Trans Mountain Expansion pipeline. Companies will be charged $9.4877 a barrel, down from a rate of $10.7006 a barrel, to ship heavy crude from Hardisty, Alberta to Texas.
The Market Steadied Following Four Days of Declines Over the Global Demand Outlook - The oil market on Thursday posted an inside trading day as the market steadied following four days of declines on concerns over the global demand outlook. The market rebounded from its lowest levels seen since January following Thursday’s selloff that was sparked by a downward revision in U.S. payrolls. The crude market posted a low of $71.58 in overnight trading and bounced higher as it failed to test its previous low. It retraced most of Wednesday’s losses as it rallied to a high of $73.52 early in the afternoon. The market was well supported by expectation that the Federal Reserve will cut interest rates in September, according to minutes of the Federal Reserve’s July meeting. Also, the U.S. Labor Department said the number of unemployment claims increased last week, but appeared to be steadying near a level consistent with gradual cooling of the labor market, setting the stage for interest rate cuts. The market later gave up some of its gains and traded in a sideways trading range ahead of the close. The October WTI contract settled up $1.08 at $73.01 and the October Brent contract settled up $1.17 at $77.22. The product markets ended the session higher, with the heating oil market settling up 1.38 cents at $2.2635 and the RB market settling up 3.87 cents at $2.2437. UBS expects Brent crude prices to recover into an $85-$90/barrel range over the coming months. The U.S. EIA said a series of refinery outages in the U.S. Midwest caused regional gasoline prices to increase to more than 20% above the national average from July 22nd to August 5th during the high-demand summer driving season. Midwest refinery utilization fell 11% to 86% from the week ending July 12th to the week ending August 9th. As these refineries restarted, utilization increased back up 97% as of the week ending August 16th. The Texas Oil & Gas Association estimates Texas oil and natural gas production reached new record highs in July. The trade group also estimates NGLs production also set a new high in July. The trade group estimates Texas crude oil production rose to 5.76 million b/d in July, with natural gas marketed production averaging 32.8 bcf/d and NGLs production of 3.85 million b/d. Year to date Texas now accounts for 42.8% of all U.S. crude oil production and 28.3% of all U.S. natural gas marketed production. Canada Energy Regulator reported that total volumes of crude oil moved by rail cars by both CN and CPKC in the first five months of 2024 averaged 94,413 b/d with the latest monthly total averaging 89,141 b/d. The OPEC Secretariat said it had received updated compensation plans from Iraq and Kazakhstan stating they aim to make up for their overproduction in the first seven months of this year by September 2025. Iraq’s cumulative overproduction between January and July was 1.4 million bpd and Kazakhstan’s was 699,000 bpd. Federal Reserve policymakers said that with inflation well below its highs they are paying close attention to the U.S. labor market to gauge when to begin reducing interest rates, with one saying they should move “soon.”
Oil prices settle $1 up on hopes of a US Fed rate cut next month (Reuters) - Oil prices settled up more than 1% on Thursday, as expectations for a U.S. interest rate cut in a few weeks fueled a rebound after four days of price declines. Brent crude futures settled up $1.17, or 1.54%, to $77.22 a barrel. U.S. West Texas Intermediate crude futures gained $1.08, or 1.5%, to $73.01. On Wednesday, minutes of the Federal Reserve's July meeting showed most Fed officials thought the central bank was on track for an interest rate cut next month. Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for oil. "The dollar has been sold off on the interest rate cut news," "Everyone is now talking about the Fed cutting rates by 50 basis points, which would be significant," he said. Fed Chair Jerome Powell is due to speak on Friday at the annual central banking conference in Jackson Hole, Wyoming. Traders will look for any insight into whether Powell expects to cut rates by 25 or 50 basis points. The U.S. dollar has fallen recently on concerns about a weakening economy, supporting oil prices as buyers using other currencies pay less for dollar-denominated crude. On Thursday, the U.S. Labor Department said the number of jobless claims ticked up last week, but appeared to be steadying near a level consistent with gradual cooling of the labor market. This set the stage for interest rate cuts. Also supporting oil prices, a U.S. government report on Wednesday showed crude, gasoline and distillate inventories fell by more than expected last week, a sign of demand picking up. In the Middle East, Iran-aligned Houthi militants continued attacks on international shipping in solidarity with Palestinians in the war between Israel and Hamas. A Greek-flagged oil tanker carrying 150,000 tonnes of crude that was evacuated by its crew after being attacked in the Red Sea now poses an environmental hazard, the EU's Red Sea naval mission "Aspides" said on Thursday. Investors are watching OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, which may reconsider its plan to gradually unwind some output cuts in October. OPEC+ has said the plan to raise output could be paused or reversed if needed.
Oil climbs over 2% after Fed's Powell indicates US rate cuts (Reuters) - U.S. light crude oil gained more than 2% a barrel on Friday after comments by U.S. Federal Reserve Chair Jerome Powell indicated the central bank was preparing to cut interest rates. Brent crude futures settled up by $1.80, or 2.33%, at $79.02 a barrel. U.S. West Texas Intermediate (WTI) crude futures finished up $1.82, or 2.49%, at $74.83. "The pivot by the Federal Reserve is real," "It's impacting all commodities." This week, both benchmarks hit their lowest since early January, after the U.S. government sharply lowered its estimate of jobs employers added this year through March, raising fears of a possible recession. On Friday, Powell endorsed easing the Fed's policies, saying further cooling in the job market would be unwelcome. He also expressed confidence inflation was within reach of the U.S. central bank's 2% target. "The upside risks to inflation have diminished. And the downside risks to employment have increased," Powell said in a highly anticipated speech to the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming. "The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks." The U.S. dollar index softened to about 101.45 ahead of the speech. A cheaper greenback typically lifts demand for dollar-denominated oil from investors holding other currencies. Morgan Stanley said in a note on Friday that a drawdown in oil inventories has somewhat supported oil prices. "For now, the balance in the oil market is tight, with inventories drawing approximately 1.2 million barrels per day in the last four weeks, which we expect will continue in the balance of [the third quarter]," the bank said. Recent data from China, the top oil importer, has pointed to a struggling economy and slowing oil demand from refiners. A renewed push for a ceasefire in Gaza between Israel and Hamas has also helped ease supply worries and weighed on oil prices. U.S. and Israeli delegations started a new round of meetings in Cairo on Thursday to resolve differences over a truce proposal. Ceasefire talks to stop the war in Gaza have reduced fears the conflict would impact crude oil supplies. U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, energy services firm Baker Hughes (BKR.O), opens new tab said on Friday. The number of oil rigs was unchanged at 483 this week, while gas rigs fell by one to 97.
Crude Oil Extends Rebound But Still Closes Lower For The Week - Following the significant rebound seen in the previous session, the price of crude oil showed another strong move to the upside during trading on Friday. Crude for October delivery surged $1.82 or 2.5 percent to $74.83 a barrel after jumping $1.08 or 1.5 percent to $73.01 a barrel during Thursday's session. Despite the notable recovery seen over the past two days, the price of crude oil fell by 0.9 for the week due to sell-off seen earlier in the week. The extended rebound by crude oil futures may have reflected optimism about the outlook for U.S. demand after Federal Reserve Chair Jerome Powell signaled the central bank is prepared to begin cutting interest rates. "The time has come for policy to adjust," Powell said at the Jackson Hole Economic Symposium, although he noted the "timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks." Powell's determination that it is time for the Fed to begin cutting rates comes as his "confidence has grown that inflation is on a sustainable path back to 2 percent." Fed officials have repeatedly said they need "greater confidence" inflation is moving sustainably toward the central bank's 2 percent target before they would consider cutting rates. The remarks by Powell came as recent inflation data has increased confidence the Fed will cut interest rates at its next monetary policy meeting in September. However, the price of crude oil remains well off its recent highs, as worries about the outlook for demand from China continue to overshadow geopolitical concerns.
Greek oil tanker ablaze after attacks in the Red Sea (AP) — A Greek-flagged oil tanker traveling through the Red Sea came under repeated attack Wednesday, leaving the vessel “not under command” and drifting ablaze after an assault suspected to have been carried out by Yemen’s Houthi rebels, the British military said.The attack, the most serious in the Red Sea in weeks, comes during a months long campaign by Houthis targeting ships over the Israel-Hamas war in the Gaza Strip that has disrupted a trade route through which $1 trillion in cargo typically passes each year.In the attack, men on small boats first opened fire with small arms about 140 kilometers (90 miles) west of the rebel-held Yemeni port city of Hodeida, the British military’s United Kingdom Maritime Trade Operations center said. Four projectiles also hit the ship, it added. It wasn’t immediately clear if that meant drones or missiles.“The vessel reports being not under command,” the UKMTO said, likely meaning it lost all power. “No casualties reported.”Later, the UKMTO warned that the ship was drifting while on fire in the Red Sea. The Greek shipping ministry later identified the vessel as the tanker Sounion, with 25 crew members on board at the time of the attack as it traveled from Iraq to Cyprus.
Iraqi resistance strikes vital Israeli military site - The Islamic Resistance in Iraq has carried out new operations against a vital Israeli military site. The umbrella group of resistance factions said on Tuesday that it targeted the regime’s military site in the occupied Umm Al-Rashrash also known as Eilat. The group added that the operation was in support of Palestinians and in response to Israel’s ongoing genocidal war in Gaza. The Iraqi resistance group has repeatedly stated that it will continue its anti-Israel operations if the Gaza genocide continues. Regional resistance groups have repeatedly targeted sensitive and important Israeli bases in occupied Palestine. They have also targeted American sites in Iraq and Syria in recent months amid growing anger at the US support for Israel’s bloody war on the Gaza Strip. Israel’s genocidal war against Gaza has so far killed more than 40,000 Palestinians, mostly women and children. On Sunday evening, the Islamic Resistance in Iraq carried out operations against Israeli military targets on the occupied Syrian Golan Heights. The Iraqi resistance said that the operations were in support of Palestinians and in response to Israel’s massacres of civilians in Gaza.
Israeli Strikes in Gaza Kill 10-Year-Old Quintuplets - Israeli strikes on Gaza on Sunday killed a total of 29 people, including 10-year-old quintuplets, The Associated Press has reported. The quintuplets were killed alongside their mother and 18-month-old sibling in a strike that targeted a home in Deir al-Balah in central Gaza. AnAP reporter counted the bodies at the al-Aqsa Martyrs Hospital.Mohammed Awad Khatab, the children’s grandfather, told reporters: “The six children have become body parts. They were placed in a single bag. What did they do? Did they kill any of the Jews? … Will this provide security to Israel?”Israel has slaughtered children and babies throughout its 10-month genocidal war, including three-day-old twins who were killed last week while their father was out getting their birth certificate. That same day, the US State Department approved $20 billion in arms deals for Israel.Gaza’s Health Ministry said Sunday that at least 40,099 Palestinians have been killed by Israel in Gaza since October 7, which includes over 16,000 children. The total is considered a low estimate since it doesn’t account for the estimated 10,000 people who are missing and presumed dead under the rubble. It’s also unclear how many people have died due to food and medicine shortages and the spread of disease caused by the Israeli siege and destruction of civilian infrastructure.
Israeli Military Recovers Six Bodies of Israeli Hostages in Gaza - The Israeli military said Tuesday that its forces recovered the bodies of six Israeli hostages in the southern Gaza city of Khan Younis. According to Ynet, initial findings show that five of the Israelis were killed as a result of a nearby Israeli airstrike. The strike caused a fire, which flooded the tunnel where they were held with carbon monoxide, killing the five Israelis and Hamas guards that were holding them. The other hostage was shot, according to an autopsy.According to Axios, there are now 109 hostages remaining in Gaza, but about half are presumed dead. In response to the news of the six bodies being recovered, a group representing hostage families called for a deal with Hamas.“The immediate return of the remaining 109 hostages can only be achieved through a negotiated deal. The Israeli government, with the assistance of mediators, must do everything in its power to finalize the deal currently on the table,” the Hostage Families and Missing Forum said in a statement. Family members of the six men whose bodies were recovered blamed their deaths on Prime Minister Benjamin Netanyahu, who has been working to sabotage the chances of a deal with Hamas.“He and all the hostages could have been brought back,” said Mati Dancyg, whose father Alex was among the recovered bodies. “Netanyahu chose to sacrifice the hostages. Karma will judge him and he will pay for it, big time.”
UN: Israel’s evacuation orders deteriorating situation in Gaza - The United Nations humanitarian office has warned that Israel’s frequent evacuation orders are deteriorating the catastrophic humanitarian situation that already plagues the Gaza Strip. The UN Office for the Coordination of Humanitarian Affairs (OCHA) said on Tuesday that the regime’s repeated evacuation orders have led to waves of displacement, overcrowding, insecurity, and collapsing infrastructure. It added that thousands of people in Gaza have no access basic services due to Israel’s evacuation orders and severe shortages of essential supplies. OCHA said the latest evacuation order released on Saturday for parts of Deir al Balah included sections of the Salah ad Din Road, a crucial passage for humanitarian missions. "This has made it nearly impossible for aid workers to move along this key route," the office said. "The Coastal Road is not a viable alternative. The beaches along this route are now crowded with makeshift shelters for displaced Palestinians." Meanwhile, a spokesperson for the UN agency for Palestinian refugees said nowhere in Gaza is safe anymore and death appears to be the "only certainty" for its people. Louise Wateridge added that the people of Gaza are facing unprecedented challenges due to the Israeli imposed siege on the territory. "It does feel like people are waiting for death. Death seems to be the only certainty in this situation," Louise Wateridge, a spokeswoman for the UN agency for Palestinian refugees, also known as UNRWA, told AFP from Gaza. Wateridge has been in the Gaza Strip for the past two weeks, witnessing the humanitarian crisis, fear of death and spread of disease as the war rages on. "Nowhere in the Gaza Strip is safe, absolutely nowhere is safe. It's absolutely devastating," Wateridge said from the Nuseirat area of central Gaza -- a regular target of Israel's aerial assaults.
Fighting intensifies between Israel and Hezbollah despite diplomatic drive – Guardian - Fighting between Hezbollah and Israel has intensified over the weekend despite diplomatic efforts to de-escalate tensions between the two and prevent an expected Hezbollah and Iranian attack against Israel.An Israeli attack on Saturday was one of the bloodiest for civilians since fighting began in October, killing 10 Syrian workers and their family members in what Israel said was a strike on a Hezbollah weapons depot in Nabatieh, south Lebanon. In response, Hezbollah launched a 55-missile barrage at the town of Ayelet HaShahar, in north Israel.Three Unifil peacekeepers were also lightly injured in an explosion on Sunday while on patrol in the Lebanese border town of Yarin. A source within Unifil said they believed the soldiers were injured by a nearby Israeli airstrike, but that they were still investigating the incident.The threat of a full-scale war looms larger than ever after 10 months of fighting between Israel and Hezbollah, sparked by the latter launching rockets at Israel “in solidarity” with Hamas’s 7 October attack.Hezbollah and Iran have vowed revenge against Israel for the assassination of the Hezbollah military chief of staff Fuad Shukr in Beirut and the Hamas leader Ismail Haniyeh in Tehran. Israel has not claimed responsibility for Haniyeh’s killing, but has a history of carrying out targeted assassinations across the region.Hezbollah released a video on Friday showcasing missile-laden trucks driving through an allegedly city-sized tunnel network, the first time the group had revealed its widely reputed tunnel network on camera.A source in Hezbollah said: “The enemy [Israel] wants a war and is always attempting to pressure us, so we are ready for all possibilities.” They added that that the group’s rocket capabilities were “very large” and what was displayed in Friday’s video was just “a drop in the ocean of what Hezbollah possesses”.The US and other western powers have been engaged in furious diplomacy since the dual assassinations in Beirut and Tehran. The US envoy Amos Hochstein visited both Tel Aviv and Beirut this week, while an emergency round of talks to forge a ceasefire in Gaza was held in Doha last week.
Exclusive: Egypt agrees to Israeli control of Gaza border in return for Rafah reopening - Egypt and Israel have reached an understanding that would allow an Israeli security presence along the Egyptian-Gaza border in exchange for the Rafah crossing being reopened and operated by Palestinians, three senior Egyptian sources told Middle East Eye. According to an Egyptian diplomat, an official at the General Intelligence Service and another at the Military Intelligence, Israel presented two options for the border area, known as the Philadelphi Corridor. One is for Israel to maintain boots on the ground, as it has since its military pushed into the area in May. The second would be to replace the troops with an underground barrier, electronic monitoring equipment and occasional patrols. Egypt said it would agree to the options if the Palestinian factions, particularly Hamas, were on board. However, Hamas, which is currently battling Israel in the Gaza Strip, insists it will not agree to any ceasefire deal that does not ensure the Israelis totally withdraw from the enclave, including the Philadelphi Corridor. Sources close to Hamas told MEE they were not aware of what Israel and Egypt had agreed, but such a deal would not be surprising or necessarily acceptable to the movement. The Philadelphi Corridor is a 14-km long, 100-metre-wide demilitarised buffer zone along the entire border between Gaza and Egypt, created by two Egyptian-Israeli agreements in 1979 and 2005. According to those pacts, neither country is able to unilaterally move forces into the area. But in May, the Israeli military seized the Rafah crossing and established control all along the border, in a move condemned by Egyptian government spokesperson Diaa Rashwan as a breach of their 1979 peace agreement. Since then, Egypt and Israel have held several meetings on the issue of the corridor and Rafah crossing. Some were held with an American presence. The General Intelligence official, who is familiar with these meetings, said Egypt has shown a willingness to be flexible over an Israeli presence in the demilitarised zone. However, the source said Egypt insists that the Rafah crossing - the only gateway to the enclave that does not border Israel - should be reopened and operated by some sort of Palestinian entity on the Gaza side.
Netanyahu at Odds With Israeli Military Over Gaza-Egypt Border - Netanyahu has said Israel must maintain control of the border, which includes the Rafah crossing, to prevent weapons smuggling from Egypt through tunnels. During previous rounds of negotiations, Cairo agreed to build an underground barrier on the border, but then Netanyahu started demanding indefinite control of the Philadelphi Corridor.According to The Wall Street Journal, Israeli military leaders think Israel doesn’t need to keep troops on the border and could prevent weapons smuggling by using sensors and launching targeted raids, but Netanyahu is still insisting on maintaining control of the border and reiterated his position on Wednesday.“Israel will insist on the achievement of all of its objectives for the war, as they have been defined by the Security Cabinet, including that Gaza never again constitutes a security threat to Israel. This requires securing the southern border,” Netanyahu’s office said in a statement.Netanyahu is also demanding that Israel maintain control of the Netzarim Corridor, which separates northern Gaza from the rest of the Strip, and he continues to reject the idea of a permanent ceasefire.Netanyahu’s demands are seen by members of the Israeli negotiating teamas an effort to sabotage the chances of a deal. Mediators believe an agreement will only be possible if the US is willing to put real pressure on the Israeli leader.
HRW: Israeli Airstrikes on Yemen Were 'Possible War Crime' - Human Rights Watch released a report on Monday that said the July 20 Israeli airstrikes targeting Yemen’s Red Sea port of Hodeidah could be a war crime since the attack caused disproportionate harm to civilians.The Israeli airstrikes, which came in response to a Houthi drone attack that killed one civilian in Tel Aviv, targeted oil storage tanks, shipping cranes, and a powerplant. The strikes killed six civilians, all employees of the Yemen Petroleum Company, and caused an estimated $20 million in damage.“The attacks appeared to cause disproportionate harm to civilians and civilian objects. Serious violations of the laws of war committed willfully, that is deliberately or recklessly, are war crimes,” HRW said.According to the Yemen Data Project (YDP), the Israeli attack resulted in more civilian harm than the hundreds of strikes the US and the UK have launched on Yemen since January combined. YDP put the death toll in the Israeli attack at nine civilians and said 83 more were wounded. It said the US and British bombing campaign had killed a total of 19 civilians and injured 55 others.
Scottish government suspends all meetings with Israel - The Scottish government announced Monday that it had suspended all meetings with Israeli ambassadors until "real progress" is made towards peace in the Gaza Strip and unimpeded access is granted to humanitarian assistance to the enclave. In a statement, External Affairs Secretary Angus Robertson said the Scottish government would not accept any invitation for a further meeting with Israel until there was real progress on the Gaza conflict. "This will remain our position until such time as real progress has been made towards peace, unimpeded access to humanitarian assistance is provided and Israel cooperates fully with its international obligations on the investigation of genocide and war crimes,"said Robertson. This came after a recent meeting between Robertson and Israel’s Deputy Ambassador to the UK Daniela Grudsky about two weeks ago, sparking criticism within the Scottish National Party (SNP). The external affairs secretary said his view was that, given Grudsky had requested the meeting this was "an opportunity to express the Scottish Government's clear and unwavering position" on the need for an immediate cease-fire in Gaza."And I did exactly that," he added. "No one intended that this meeting be presented as legitimatising the actions of the Israeli government in Gaza," he noted, expressing that the Scottish Government has been consistent in its "unequivocal condemnation of the atrocities" in the Palestinian enclave. Noting that many had seen the meeting as a sign of normalization between the Israeli and Scottish governments, Robertson stressed that it was clear that it would have been better to ensure that its agenda was strictly limited to the need for an immediate cease-fire in Gaza. "I apologise for the fact that this did not happen," he said. Robertson added that, "going forward, it is clear that, having now spoken direct to the Israeli Government and making them aware of our position on an immediate ceasefire, it would not be appropriate to accept any invitation for a further meeting." Highlighting that this would remain the Scottish government's position until real progress on a cease-fire is made, he said: "The Scottish Government does not support any normalisation of its relations with the Israeli Government during this period." "The Scottish Government will never hold back in expressing support for an immediate ceasefire in Gaza, the release of all hostages, an end to UK arms being sent to Israel, and the recognition of a sovereign Palestinian state within a two-state solution."
Russia Says Talks With Ukraine Are Impossible After Kursk Offensive - Russian Foreign Minister Sergey Lavrov said Monday that President Vladimir Putin had made clear talks with Ukraine are now impossible following the Ukrainian assault on Russia’s Kursk Oblast.“The president said it very clearly that following attacks, or even incursion, on the Kursk Region, any talks are impossible,” Lavrov said, according to Russia’s TASS news agency.Ukrainian officials have suggested the purpose of the invasion of Kursk was to gain leverage for future negotiations with Russia, but Moscow’s reaction to the incursion signals that the assault would only delay peace talks.The Washington Post reported on Saturday that Russia and Ukraine were due to hold indirect negotiations in Qatar on a potential agreement to stop targeting each other’s energy infrastructure, but it was derailed by the Kursk offensive.Russian Foreign Ministry spokeswoman Maria Zakharova appeared to deny the Post report, saying Russia was not involved in any “direct or indirect”talks with Ukraine that could have been derailed by the Kursk offensive. Lavrov mentioned the report but only denied rumors that Russia and Ukraine had any “clandestine contacts” ahead of talks that were supposed to be brokered by Qatar.Ahead of Ukraine’s invasion of Kursk, Zelensky signaled he was open to holding peace talks with Russia, which was a significant shift in his position. He previously rejected the idea of diplomacy with Moscow unless Russia withdrew from the territory it had captured in Ukraine, as well as Crimea.Russia expressed an openness to Zelensky’s new willingness to talk, but now Russian officials view the comments as a ploy since they were made as Ukraine was preparing the Kursk offensive.Russia and Ukraine have not engaged in any talks on a potential ceasefire since the early days of the invasion. A peace deal was on the table during negotiations in March and April 2022, but diplomacy was discouraged by the US and its allies, which promised to fund the Ukrainian war effort.
Moscow Says Ukraine Destroyed Russian Bridge With Western-Provided Missiles - The Russian Foreign Ministry said Friday that Ukrainian forces used Western-provided missiles to destroy a bridge in the Glushkovsky district of Russia’s Kursk Oblast.Russian Foreign Ministry spokeswoman Maria Zakharova said the missiles were likely launched using the US-provided HIMARS rocket systems, which the US has been supplying to Ukraine since 2022.“For the first time, the Kursk region was hit by Western-made rocket launchers, probably American HIMARS,” Zakharova wrote on Telegram. “As a result of the attack on the bridge … it was completely destroyed, and volunteers who were assisting the evacuated civilian population were killed.”Another bridge in Kursk was reported to be hit by Ukrainian forces on Sunday. According to the Russian news site Mash, both bridges were targeted with US-provided HIMARS.The ground incursion into Kursk came a few months after the Biden administration gave Ukraine the greenlight to use US-provided missiles in strikes inside Russia in border regions. The US says it won’t support “long-range” strikes in Russia but hasn’t defined what the limit is.
Ukraine’s Kursk offensive is a huge strategic error - Ukrainian President Volodymyr Zelensky has proven himself a master of the political stage, a gifted orator capable of stirring emotions and garnering global support. However, his recent military incursion into Russia marks a departure from the realm of diplomacy and into the territory of strategic blunder. This reckless gambit, more akin to a desperate stunt worthy of a second-rate actor than a seasoned statesman, diverts critical resources from the primary battlefield while offering negligible strategic gain. While the incursion has captured headlines and inflicted some measure of psychological damage on Russia, such superficial victories do little to alter the fundamental dynamics of the conflict. Russia, despite its setbacks, remains a formidable military power with a vast arsenal and a nuclear deterrent. Ukraine, while demonstrating courage and resilience, faces a daunting challenge in overcoming this overwhelming disparity. More critically, this diversion of forces from the main theater of war is a huge strategic miscalculation. Every soldier, tank and piece of artillery deployed in the Russian incursion represents a loss to the Ukrainian effort to liberate occupied territories. These resources, if concentrated on the front lines, could potentially yield tangible gains, weakening Russian defenses and creating opportunities for decisive breakthroughs. Instead, Ukraine finds itself embroiled in a costly and ultimately futile endeavor. While the world watches in fascination, the real battle for Ukraine’s future continues to unfold elsewhere. Zelensky’s decision to gamble on a high-stakes publicity stunt is a tragic misjudgment that may have far-reaching consequences. It is time for sober reflection. The Ukrainian people deserve leadership focused on practical, achievable objectives, not on grandstanding gestures. While courage and defiance are admirable, they must be tempered with strategic wisdom. The path to victory lies not in symbolic acts of defiance, but in the methodical, relentless pursuit of territorial liberation. This is not to diminish the bravery of Ukrainian forces who have undoubtedly faced significant challenges in this incursion — but courage without strategic direction is a recipe for disaster. The question that must be asked is whether the risks outweigh the potential rewards. Right now, the evidence suggests a resounding negative. Moreover, it is essential to consider the potential consequences of such actions. A prolonged incursion into Russia could escalate the conflict, drawing in other nations and potentially leading to a catastrophic global confrontation. It is a dangerous game of chicken, with the stakes for humanity as a whole being unimaginably high. Ukraine faces a critical juncture. The path forward is fraught with challenges, but it is clear that the focus must remain on the liberation of occupied territories. To squander precious resources on a symbolic gesture is a luxury the country cannot afford. It is time to return to the core mission and to avoid distractions that threaten to undermine the ultimate goal. The world is watching, and the stakes could not be higher. Ukraine must demonstrate not only courage, but also wisdom and strategic acumen. The incursion into Russia is a step in the wrong direction.
Ukraine hits Moscow in major drone attack, Russia says - Ukraine hit Moscow on Wednesday in what Russia described as one of its largest drone attacks in the war, though Russia claimed all of the explosive unmanned vehicles were shot down. The Russian Ministry of Defense said that overnight into Wednesday, its forces destroyed a total of 45 drones launched into Russia. Eleven of those drones were taken out by air defenses over the region of Moscow, and three of them around the neighboring province of Kaluga Oblast, according to Russia. The rest were downed by air defenses in regions that border Ukraine, including Kursk, where Ukraine is pushing forward in a major offensive that began Aug. 6. Ukraine has targeted Moscow with long-range drones before, and Russia accused Ukraine of being behind an attack on the Kremlin last year that came amid a Ukrainian campaign to damage Russia’s war efforts. Moscow Mayor Sergey Sobyanin said in a Telegram post that Wednesday’s operation was “one of the largest attempts to attack Moscow with drones ever.” Ukrainian officials have not publicly commented on the drone attack and have typically refrained from mentioning strikes on Russian territory. Ukraine’s armed forces said Wednesday that Russia launched a wave of drone and missile attacks on Ukrainian territory that were shot down. The attack around Moscow comes as Ukraine is advancing into Kursk, taking close to 500 square miles of territory and more than 90 settlements in the Russian region. Russia is also making its own advances in eastern Ukraine, putting pressure on the towns of Toretsk and Pokrovsk in the Donetsk region.
EU's Top Diplomat Calls for Supporting Long-Range Strikes in Russia - Josep Borrell, the EU’s top diplomat, called on Wednesday for Western countries that are providing weapons to Ukraine to lift restrictions to allow long-range strikes inside Russia with NATO weapons.The US is allowing Ukraine to use US-provided weapons in its Kursk offensive but is not permitting them to be used in long-range strikes. “Ukraine’s Kursk offensive is a severe blow to Russian President Putin’s narrative,” Borrell wrote on X.“Lifting restrictions on the use of capabilities vs the Russian military involved in aggression against Ukraine, in accordance with international law, would have several important effects,” he said.Borrell claimed allowing long-range strikes would help peace efforts, but Russia is ruling out any negotiations with Ukraine in the wake of the Kursk offensive, which was launched on August 6.Ukrainian President Volodymyr Zelensky is pushing hard for the US and NATO to lift all restrictions on the use of their weapons, and has called his Western backers’ concerns about escalation “naive.” In the meantime, Ukraine has been stepping up longer-range attacks inside Russia using drones.“Our Ukrainian drones work exactly as they should,” Zelensky said last week. “But there are things that cannot be done with drones alone. Unfortunately. We need other weapons—missile weapons.”
Modi Visits Kyiv as Ukraine Seeks Progress on Peace Plan Talks – - Ukraine will seek to engage Indian Prime Minister Narendra Modi in “concrete discussion” of its peace blueprint aimed at ending Russia’s war, according to President Volodymyr Zelenskiy’s chief of staff. Modi arrived in Kyiv on Friday for his first visit since the Kremlin launched its full-scale invasion more than two years ago and follows his meeting with Russian President Vladimir Putin last month. The visit in Moscow irked US officials and prompted Zelenskiy to call it a blow to peace efforts as it happened on the same day as a deadly Russian missile strike hit a children’s hospital in Kyiv. Modi has refrained from criticizing Moscow for the invasion and speaking in Warsaw on Thursday reinforced his message that the war in Ukraine can only be resolved diplomatically. “We’re looking for some concrete discussions and we hope that Prime Minister Modi and President Zelenskiy will really open the new page of our relations,” Andriy Yermak told India Today in an interview. Both leaders will discuss “the position of India and its role in in realization of peace formula,” he said, adding that “it will be important” for Modi to visit sites of Russian attacks. Kyiv’s overtures to Modi have fallen short so far. India was among nations at a June summit meeting in Switzerland that didn’t sign a final statement, a blow to Ukraine’s bid to broaden global support. The stance reflects New Delhi’s close political and economic links with Russia, which supplies India with cheap oil and weapons. Ukraine sees India as central to its efforts to win over the Global South to increase pressure on the Kremlin as it seeks to hold the second gathering of leaders on its peace blueprint before the US elections, this time aiming to have Russia attending. The plan includes issues ranging from nuclear and food security to withdrawal of the Kremlin’s troops from its territory.
Chinese, Philippine Coast Guard Vessels Collide in the South China Sea - Chinese and Philippine Coast Guard vessels collided in the South China Seaon Monday near the Sabina Shoal in the disputed South China Sea.The two sides are trading blame for the incident, which happened despite diplomatic efforts between Beijing and Manila to cool tensions in the waters. Sabina Shoal is part of the Spratly Islands and is claimed by China, the Philippines, Vietnam, and Taiwan.The Chinese Coast Guard said the Philippine vessel “illegally” entered waters near Sabina Shoal, which is about 86 miles west of the Philippine island of Palawan, and accused it of purposely colliding with the Chinese vessel.The Philippines disputed the Chinese account, saying the Chinese vessel was conducting “unlawful and aggressive maneuvers” and rammed the Philippine boat. Philippine authorities said there was a second incident where the Chinese vessel rammed another Philippine vessel near the shoal.Manila’s National Task Force on the West Philippine Sea said the incident “resulted in collisions causing structural damage to both Philippine Coast Guard vessels.”The South China Sea has become a potential flashpoint for a war between the US and China since the US has promised the Philippines that the US-Philippine Mutual Defense Treaty applies to attacks on Philippine vessels in the disputed waters. That means the US has pledged to intervene if the maritime dispute turns hot.The US has been strengthening its military ties with the Philippines andrecently announced $500 million in new military aid for Manila, which is being pulled from the $95 billion foreign military aid bill President Biden signed into law in April.The US announced the new aid for the Philippines after Manila and Beijing agreed to a deal to ease tensions around Second Thomas Shoal, another disputed reef that’s been the site of frequent collisions. However, China and the Philippines have since disputed the details of the agreement.Beijing has said the US is escalating the situation in the South China Sea by being involved in the dispute. This view was articulated in an article from China’s Global Times about the latest collision.The Global Times article reads: “The Philippines’ provocations on Chinese islands and reefs in the South China Sea started about one year ago, and from the beginning they were instigated by the US, which wants to use the Philippines as a foothold on the southern end of the first island chain to form a strategic encirclement designed to contain China, analysts said.”
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