Written by rjs, MarketWatch 666
Here are some selected news articles from the week ended 14 April 2019.
This article is a feature every Monday evening on GEI.
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Global oil surplus persists in March, despite OPEC 1st quarter output cuts exceeding 1.6 million barrels per day
Oil prices rose for a 6th straight week and are now up 38% since the beginning of the year, with this week’s increase underpinned by a new OPEC report that showed they’d cut their output to the lowest in 4 years…after rising nearly 5% to $63.08 a barrel on tighter supplies and improving economic news last week, contract prices for US crude for May delivery rose $1.32, or more than 2%, to $64.40 a barrel on Monday, their highest level since the end of October 2018, driven higher by supply restraints due to U.S. sanctions against Iran and Venezuela, OPEC’s output cuts, and renewed fighting in Libya…however, oil prices fell from those 5 month highs on Tuesday, after the International Monetary Fund cut its global economic growth forecasts, and as Russia signaled it may retreat from its production-cutting deal with OPEC, with US crude finishing down 42 cents at $63.98 a barrel…prices then rose on Wednesday towards another new five-month high after OPEC reported their oil production had plunged to four-year low in March and held those gains despite a whopping 7 million barrel increase in US crude inventories, with May crude settling 63 cents higher at $64.61 a barrel…oil prices then retreated from that 5 month high on Thursday, sliding $1.03 to $63.58 a barrel, after sources said OPEC might raise output if Venezuelan and Iranian supplies fall further and prices keep rising…prices recovered a bit of those losses Friday, gaining 31 cents to $63.89 a barrel, as involuntary cuts from Venezuela and Iran and conflict in Libya led to perceptions of a tightening crude market, with May US oil thus ending up 1.3 percent for the week overall…
Natural gas prices, on the other hand, ended little changed for the second week in a row…after rising two-tenths of a cent to $2.664 per mmBTU to begin the so-called shoulder season last week, natural gas for May delivery fell four tenths of a cent over the five trading sessions of this week to end the week at $2.660 per mmBTU, as even a bullish miss of expectations on the EIA storage report was not enough to outweigh weak supply/demand balances…the natural gas storage report for the week ending April 5th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 25 billion cubic feet to 1,155 billion cubic feet over the week, which still left our gas supplies 183 billion cubic feet, or 13.7% below the 1,338 billion cubic feet that were in storage on April 6th of last year, and 485 billion cubic feet, or 29.6% below the five-year average of 1,640 billion cubic feet of natural gas that have typically remained in storage as of the first weekend in April in recent years….this week’s 25 billion cubic feet injection into US natural gas storage was less than consensus expectations of a 29 billion cubic foot addition to storage, while it was quite a bit more than the 5 billion cubic feet of natural gas that are normally added to gas storage during the first week of April….
For the coming week, the EIA’s natural gas storage dashboard indicates that 131 billion cubic feet of natural gas were consumed in residential and commercial use; that compares to the 186 billion cubic feet used by residential and commercial accounts in the week we’ve just reported on…if other demand factors are little changed otherwise, we should see an injection of around 80 billion cubic feet of natural gas into storage with next week’s report..
The Latest US Oil Supply and Disposition Data from the EIA
This week’s US oil data from the US Energy Information Administration, reporting on the week ending April 5th, indicated a modest increase our refinery usage of crude, with a corresponding decrease in our oil exports, and hence there was another surplus to add to our commercial supplies of crude for the third week in a row…our imports of crude oil fell by an average of 166,000 barrels per day to an average of 6,599,000 barrels per day, after rising by an average of 223,000 barrels per day the prior week, while our exports of crude oil fell by an average of 374,000 barrels per day to 2,349,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,250,000 barrels of per day during the week ending April 5th, 210,000 more barrels per day than the net of our imports minus exports during the prior week…over the same period, field production of crude oil from US wells was reported to be unchanged at a record 12,200,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,450,000 barrels per day during this reporting week…
Meanwhile, US oil refineries were using 16,100,000 barrels of crude per day during the week ending April 5th, 251,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that 1,004,000 barrels of oil per day were being added to the oil that’s in storage in the US…..therefore, this week’s crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports and from oilfield production was 654,000 fewer barrels per day than what was added to storage plus the oil refineries reported they used during the week…to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (+654,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as “unaccounted for crude oil”….with that much oil unaccounted for, we have to figure that one or more of this week’s oil metrics is in error by a statistically significant amount.. (for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….
Further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to an average of 6,709,000 barrels per day last week, now 15.5% less than the 7,943,000 barrel per day average that we were importing over the same four-week period last year…. the 1,004,000 barrel per day increase in our total crude inventories was all added to our commercially available stocks of crude oil, as the oil stored in our Strategic Petroleum Reserve remained unchanged…this week’s crude oil production was reported to be unchanged at 12,200,000 barrels per day because the rounded estimate for output from wells in the lower 48 states was unchanged at 11,700,000 barrels per day, while a 2,000 barrel per day increase in Alaska’s oil production to 484,000 barrels per day was not enough to make a difference in the rounded national total…last year’s US crude oil production for the week ending April 6th was at 10,525,000 barrels per day, so this reporting week’s rounded oil production figure was 15.9% above that of a year ago, and 44.8% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016…
Meanwhile, US oil refineries were operating at 87.5% of their capacity in using 16,100,000 barrels of crude per day during the week ending April 5th, up from 86.4% of capacity the prior week, but still quite a bit lower than before Venezuelan imports of heavy crude that Gulf Coast refineries are optimized to use were cut off….similarly, the 16,100,000 barrels per day of oil that were refined this week were down by 5.4% from the 17,019,000 barrels of crude per day that were being processed during the week ending April 6th, 2018, when US refineries were operating at 93.5% of capacity…
With the increase in the amount of oil being refined, the gasoline output from our refineries was likewise higher, rising by 356,000 barrels per day to 10,169,000 barrels per day during the week ending April 5th, after our refineries’ gasoline output had increased by 156,000 barrels per day the prior week….but even with those back to back increases in gasoline output, this week’s gasoline production was only a bit more than the 10,150,000 barrels of gasoline that were being produced daily during the same week last year….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) rose by 168,000 barrels per day to 5,038,000 barrels per day, after that output had decreased by 55,000 barrels per day the prior week…but even after this week’s increase, the week’s distillates production was still 4.1% less than the 5,256,000 barrels of distillates per day that were being produced during the week ending April 6th, 2018….
Even with the increase in our gasoline production, the supply of gasoline left in storage at the end of the week fell for the 8th week in a row, decreasing by 7,700,000 barrels to 229,129,000 barrels over the week to April 5th, after supplies had fallen by 1,781,000 barrels over the prior week….the draw from our gasoline supplies was much greater this week than last because the amount of gasoline supplied to US markets increased by 675,000 barrels per day to 9,806,000 barrels per day, after increasing by 7,000 barrels per day the prior week, and because our exports of gasoline rose by 41,000 barrels per day to 656,000 barrels per day while our imports of gasoline fell by 32,000 barrels per day 714,000 barrels per day…after having reached an all time record high ten weeks ago, our gasoline inventories are now 4.1% lower than last April 6th’s level of 238,935,000 barrels, and have now fallen back to the five year average of our gasoline supplies at this time of the year…
Even with the increase in our distillates production, our supplies of distillate fuels fell for the 21st time in twenty-eight weeks, but just by 116,000 barrels to 128,053,000 barrels during the week ending April 5th, after our distillates supplies had decreased by 1,998,000 barrels over the prior week…the draw on our distillates supplies was smaller this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 377,000 barrels per day to 3,779,000 barrels per day, while our exports of distillates rose by 231,000 barrels per day to 1,374,000 barrels per day, while our imports of distillates fell by 46,000 barrels per day to 98,000 barrels per day…after this week’s inventory decrease, our distillate supplies were fractionally lower than the 128,447,000 barrels that we had stored on April 6th, 2018, while remaining roughly 6% below the five year average of distillates stocks for this time of the year…
Finally, with record oil production, lower oil exports, and ongoing sub-par refinery runs, our commercial supplies of crude oil in storage increased for the ninth time in 12 weeks, rising by 7,029,000 barrels over the week, from 449,521,000 barrels on March 29th to 456,550,000 barrels on April 5th…that increase was enough to lift our crude oil inventories fractionally above recent five-year average of crude oil supplies for this time of year, while rising to 33.3% above the prior 5 year (2009 – 2013) average of crude oil stocks after the first week of April, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first rose above 400 million barrels…since our crude oil inventories had mostly been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of April 5th were 6.5% above the 428,638,000 barrels of oil we had stored on April 6th of 2018, but at the same time still 14.4% below the 533,377,000 barrels of oil that we had in storage on April 7th of 2017, and 9.6% below the 505,232,000 barrels of oil we had in storage on April 8th of 2016…
OPEC’s Monthly Oil Market Report
Next we’re going to review OPEC’s April Oil Market Report (covering March OPEC & global oil data), which was released on Wednesday of this past week and was a major factor in the price rally we saw that day…this report is available as a free download, and hence it’s the report we check for monthly global oil supply and demand data…the first table from this monthly report that we’ll look at is from the page numbered 58 of that report (pdf page 68), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate…for all their official production measurements, OPEC uses an average of estimates from six “secondary sources”, namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as an impartial adjudicator as to whether their output quotas and production cuts are being met, to thus resolve any potential disputes that could arise if each member reported their own figures…
As we can see from this table of official oil production data, OPEC’s oil output fell by 534,000 barrels per day to 30,022,000 barrels per day in March, from their revised February production total of 30,557,000 barrels per day…however that February figure was originally reported as 30,549,000 barrels per day, so that means their production for March was, in effect, a 526,000 barrel per day decrease from the previously reported figures (for your reference, here is the table of the official February OPEC output figures as reported a month ago, before this month’s revisions)…
Once again, output cuts of 324,000 barrels per day by Saudi Arabia and 289,000 barrels per day by Venezuela alone accounted for this month’s production reduction, with the drop in the oil output from Venezuela being largely involuntary, due to US sanctions on their exports….in addition, the 126,000 barrels per day cut in the output from Iraq now brings them pretty close to the output allocations assigned to each member after their December 7th meeting, when OPEC agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers, leaving Nigeria as the sole OPEC member who is still producing in excess of their quota to any degree….this can be seen in the table of OPEC production allocations we’ve included below:
The above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, and shows average daily production quota in millions of barrels of oil per day for each of the OPEC members for the first 6 months of this year, as was agreed to at their December 2018 meeting…note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by disruptive civil strife, are exempt from any production quotas, and that only Libya had produced any more than they did in the 4th quarter of 2018, as shown in the fifth column of the OPEC production table above…
The next graphic we’ll include shows us both OPEC and world oil production monthly on the same graph, over the period from April 2017 to March 2019, and it comes from page 59 (pdf page 69) of the April OPEC Monthly Oil Market Report….on this graph, the cerulean blue bars represent OPEC oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale…
OPEC’s preliminary estimate indicates that total global oil production fell by 0.14 million barrels per day to 99.26 million barrels per day in March, but that came after February’s total global output figure was revised up by 250,000 barrels per day from the 99.15 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 390,000 barrels per day in March after that revision, with increased oil output from US and Brazil the major reasons for the non-OPEC production increase…. the 99.26 million barrels per day produced globally in March was also 1.05 million barrels per day, or 1.1% higher than the revised 98.21 million barrels of oil per day that were being produced globally in March a year ago (see the April 2018 OPEC report online (pdf) for the originally reported March 2018 details)…after the March decrease in OPEC’s output, their March oil production of 30,022,000 barrels per day represented just 30.2% of what was produced globally during the month, down from the 30.8% share they reported for February….OPEC’s March 2018 production was reported at 31,958,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year’s total and new member Congo from this year’s, are now producing 1,674,000 fewer barrels per day of oil than they were producing a year ago, when they accounted for 32.6% of global output, with a 756,000 barrel per day drop in the output from Venezuela and a 1,116,000 barrel per day decrease in output from Iran from that time more than offsetting the year over year production increases of 195,000 barrels per day from the Emirates, 130,000 barrels per day from Libya, and 96,000 barrels per day from Iraq…
However, despite the 0.14 million barrels per day decrease in global oil output seen during March, the upward revision to February’s global output meant we still had a small surplus in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us…
The table above comes from page 34 of the February OPEC Monthly Oil Market Report (pdf page 44), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC’s estimate of oil demand by region and globally quarterly over 2019 over the rest of the table…on the “Total world” line in the second column, we’ve circled in blue the figure that’s relevant for March, which is their revised estimate of global oil demand during the first quarter of 2018…
OPEC has estimated that during the 1st quarter of this year, all oil consuming regions of the globe have been using 99.02 million barrels of oil per day, which was the same as their estimate for the 1st quarter a month ago….meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world’s oil producers were still producing 99.26 million barrels per day during March, which means that there was a surplus of around 240,000 barrels per day in global oil production as compared to the demand estimated for the month…in addition, the upward revision of 250,000 barrels per day to February’s output that’s implied in this report means that the global oil output surplus for February would now be revised to 380,000 barrels per day….that follows a 290,000 barrel per day global oil output surplus in January, so despite OPEC cuts now totaling more than 1.6 million barrels per day over the first quarter of this year, the global oil glut still persists…
We should also note that the previous estimate for 2018’s oil demand was revised 20,000 barrels per day lower with this report, a figure which we’ve highlighted in a green ellipse…the 2018 demand table on page 33 of the March OPEC Monthly Oil Market Report (pdf page 43) shows that was because demand for the 4th quarter was revised 80,000 barrels per day lower, while oil demand for the remainder of 2018 was unrevised from previously published figures…that revision means that for all of 2018, global oil demand exceeded production by roughly 7,090,000 barrels, a comparatively tiny net oil shortfall that would be the equivalent of less than one hour and forty-five minutes of global production at the December production rate…
This Week’s Rig Count
US drilling rig activity decreased for the seventh time in eight weeks, with a surprising number of this week’s changes occurring among natural gas rigs, while oil rigs still managed to eke out an increase for the 2nd week in a row…..Baker Hughes reported that the total count of rotary rigs running in the US fell by 3 rigs to 1022 rigs over the week ending April 12th, which was still 14 more rigs than the 1008 rigs that were in use as of the April 13th report of 2018, while well down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market…
The count of rigs drilling for oil rose by 2 rigs to 833 rigs this week, which was also 18 more oil rigs than were running a year ago, while it was still well below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014…at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 5 rigs to 189 natural gas rigs, which was also down by 4 rigs from the 192 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008…
Drilling activity offshore in the Gulf of Mexico increased by 1 rig to 23 rigs this week, which was also 7 more rigs than the 16 rigs active in the Gulf a year ago, which was coming off a record low at that time…meanwhile, the number of active horizontal drilling rigs decreased by 12 rigs to 899 horizontal rigs this week, which was the least horizontal rigs deployed since April 20th of last year, but still 6 more horizontal rigs than the 883 horizontal rigs that were in use in the US on April 13th of last year, while down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014…..on the other hand, the directional rig count increased by 8 rigs to 78 directional rigs this week, which was also up by 8 rigs from the 70 directional rigs that were in use during the same week of last year….in addition, the vertical rig count increased by 1 rig to 55 vertical rigs this week, which was the same as the number of vertical rigs that were operating on April 13th of 2018…
The details on this week’s changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the second table shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of April 12th, the second column shows the change in the number of working rigs between last week’s count (April 5th) and this week’s (April 12th) count, the third column shows last week’s April 5th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the equivalent weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 13th of April, 2018…
As you can see, this week’s rig count decrease was driven by the drop of 6 natural gas rigs in the Marcellus shale, 5 of which came out of Pennsylvania, and one of which was pulled from West Virginia…Pennsylvania’s pullback was limited to 3 rigs, however, with the addition of two natural gas rigs in the Utica shale, one in Lawrence county and the other in Beaver county, with the latter going to a depth of less than 10,000 feet, strongly suggesting it was drilling in the Ohio valley or adjacent lowlands…meanwhile, the Utica shale also saw a rig addition in Ohio, to account for the 3 rig increase you see for the Utica above…on the other hand, two more natural gas rigs were pulled out of the Haynesville shale in northern Louisiana, while another natural gas rig was also pulled out of the Arkoma Woodford of Oklahoma, which also saw an oil rig shut down at the same time…lastly, a natural gas rig was added in an “other” basin not tracked separately by Baker Hughes, to leave us with the net decrease of 5 natural gas rigs that we reported earlier…note, however, that came by way of shutting down 8 rigs in the traditional dry gas plays of the Marcellus and Haynesville, and adding back three natural gas rigs in the liquids heavy Utica…that suggests that at least some of the drillers in the area may be shifting away from the underpriced dry natural gas into the more lucrative natural gas liquids, either to supply the Mariner East pipeline across Pennsylvania to the Marcus Hook refinery, or to the coast for export, or ultimately as feedstock for the petrochemical crackers that are planned for the Ohio valley…
Meanwhile, the two rig increase in the Permian basin masks quite a bit of movement inside the basin, as 4 rigs were added in Texas Oil District 8, which corresponds to the core Permian Delaware, and 2 rigs were added in Texas Oil District 8, or the northern Permian Midland basin, while two Permian rigs were concurrently shut down in Texas Oil District 7C, or the southern Permian Midland basin…hence, since Texas added 4 Permian rigs, the two rigs shut down in New Mexico would have been in the Permian Delaware on their side of the state line..
In addition to the changes in the major producing states shown in the table above, we also have to note that Alabama had a rig added back this week after 5 weeks without, which was still down from the 2 rigs deployed in the state a year ago, that Mississippi also added a rig and now has 4 rigs drilling in the state, up from 2 rigs a year ago, and that the lone rig that started up in Nebraska last week was shut down this week…Nebraska has only seen drilling activity two other weeks out of the past year; one week in July and one week in October…
Some say local profits from Rover pipeline have Biblical significance (VIDEO) – – The Rover Pipeline paid more than $3 million to Richland County in annual property taxes for 2018, with more than $69 million paid across the state, according to a press release by the company last week. Some say the pipeline coming to the economically-stagnant region can be attributed to GOD’s hand of blessing following diplomatic efforts by clergy that took international stage.The massive 713 mile natural gas pipeline was approved for construction thru north central Ohio ten daysafter a clergy apology letter was sent by 103 leading area clergymen to Israeli Prime Minster Benjamin Netanyahu.In the letter, the clergy apologized for the role of the United States played under President Barack Obama in the anti-Semitic U.N. Resolution 2334 . The resolution stated Israeli settlements in Palestinian territory occupied since 1967, have “no legal validity,” and constitutes a ‘flagrant violation’ under international law.One of the signers of the clergy letter, Reverend Robert Kurtz of Mansfield Temple Baptist, believes the uncanny timing of the Rover Pipeline approval could not have come at a better time, especially when energy projects often go contested. “There is something precious and beautiful about seeing GOD’s hand of blessing as a community seeks Him and His direction,” said Kurtz. “We can be grateful for the leadership that GOD has provided in Richland County and all glory goes to GOD for this injection of income.”Co-authors of the clergy correspondence stated to the Ashland Times Gazette that they believe the favor of the Lord can occur with people who bless Israel and the Jewish people. It appears this favor has manifested itself as natural gas. Describing the abundance of natural resources like natural gas as a “blessing” is not foreign in the marketplace of ideas.
Eight New Permits Issued in Utica Shale – The Ohio Department of Natural Resources has issued eight new permits for horizontal wells in the Utica shale during the week ended April 6, according to the latest data provided by the agency. Ascent Resources Utica LLC secured five permits for wells in Belmont County, while Eclipse Resources was awarded three permits to drill new wells in Monroe County, ODNR reported. ODNR did not issue any new permits during the previous week. As of April 6, ODNR reported there are 3,046 horizontal well permits issued in the Utica shale. Of that number, 2,568 are drilled and 2,179 wells are in production. The rig count – the number of rigs operating across the Utica during a single day – stood at 16. There were no new permits issued in the northern Utica during the week, which includes Mahoning, Trumbull and Columbiana counties. And the Pennsylvania Department of Environmental Protection did not issue permits last week for Utica shale wells in neighboring Mercer and Lawrence counties in western Pennsylvania.
Ohio’s Utica shale drilling numbers staying consistent – Akron Beacon Journal – Oil and gas companies have drilled more than 2,500 horizontal shale wells in Ohio, causing the state’s oil and natural gas production to surge. Drillers came to Ohio planning to explore the Utica and Marcellus shales beneath the eastern half of the state, but most horizontal drilling – sometimes called fracking – has concentrated in the Utica Shale deposits in counties near the Ohio River. In the early days of shale drilling, the average well was 6,000 feet deep and 4,000 feet long. Now, the average well is being drilled 8,500 to 10,000 feet deep and 12,000 feet long; some wells are as long as 20,000 feet, Simmers said. Last year, 358 new horizontal shale wells were drilled, according to the Division of Oil and Gas, which is part of the Department of Natural Resources. “These numbers, we project, are going to be pretty consistent for the next two years,” Simmers said.Utica Shale wells have caused Ohio’s natural gas production to surge. Last year, they produced 2.35 trillion cubic feet of natural gas, more than twice what the state consumes in year.“Gas production is growing very, very quickly,” Simmers said, explaining that natural gas production had increased every quarter since ODNR began quarterly tracking in 2013.Pipelines and processing plants have been built throughout the region to handle all of that natural gas, and four gas-burning electric power plants have been built, with more in the planning stage.Ohio has gone from producing less than 14 percent of the natural gas it consumed in 2011, to producing more than twice what it used last year.Although the Utica Shale primarily produces natural gas, the formation also contains a significant amount of oil, Simmers said. Last year, shale wells produced almost 20 million barrels of oil.
Extending Utica gas play into Pennsylvania remains possibility – A recent acquisition by a privately held oil and natural gas producer might be an early indication that Appalachian operators remain interested in producing gas from western Pennsylvania wells targeting the Utica shale, although large-scale development of that potential play remains years away. Pin Oak Energy Partners earlier this month closed on the acquisition from Shell affiliate SWEPI LP of about 43,000 acres in northwestern Pennsylvania, which Pin Oak views as prospective for Utica shale development.Mark Van Tyne, Pin Oak cofounder and chief business development officer, said the deal bolsters the company’s deep Utica rights in both the wet gas and oil windows of the play.”We clearly understand the impact and nature of the Utica and Marcellus,” Van Tyne said in an interview. “Our portfolio is a mix of conventional wells, predominantly in Ohio, and Utica and Marcellus wells across Ohio and Pennsylvania.”As a result of the acquisition, Pin Oak Energy increased its net acreage position in the deep Utica play in the northeastern Pennsylvania counties of Mercer, Crawford and Venango to a total of 60,000, 5,500 and 7,100, respectively. The acquisition also includes drilled and completed, but not online, horizontal Utica Shale wells along with previously built, but not drilled, well pads. To date, virtually all of the drilling targeting the Utica Shale is been concentrated in a few counties in eastern Ohio, close to the state’s borders with Pennsylvania and West Virginia. The vast majority of these wells are concentrated in nine eastern Ohio counties, stretching from Columbiana County on the northern edge of the play to Noble and Monroe counties on the south. In contrast, the bulk of drilling activity conducted in western Pennsylvania is concentrated in three counties in the southwestern corner of the state — Washington, Greene, and Westmoreland — where producers are targeting the shallower Marcellus shale formation. While most production from the Utica Shale has been focused on eastern Ohio, the aerial extend of the play extends far beyond that region, encompassing most of the areas of two states, Pennsylvania and West Virginia, as well as large swaths of Ohio and New York and extending northward into Quebec. However, across much of its extent Utica drilling is constrained by the depth of the play. The Utica formation underlies the prolific Marcellus shale by several thousand feet over much of its geographic footprint. Several larger Appalachian exploration-and-production companies, such as EQT, have drilled a few Utica wells, Leo Mariani, an analyst with KeyBanc Capital Markets, said in an interview. “Generally speaking, the wells have been pretty good, but the big hang-up has been they’re very expensive to drill,” he said. “Given the lower oil price environment, a lot of a guys have put that on hold.”
The shale boom may be a semi-bust: study – — The “boom” the oil and gas industry associates with the shale revolution in the U.S., is more like the pffffttt sound a balloon make as it flies around a room losing air and altitude, a recent study postulates. A trio of professors, including assistant economics professor Amanda Weinstein from the University of Akron (Ohio), and Alexandra Tsvetkova and Mark Partridge from The Ohio State University, researched the flow of money in energy “boomtowns” nationwide. The authors looked at earnings in oil and gas extraction and mining support activities in four regions comprising 26 states between 2001 and 2013. Their research found $1 of every $5 in earnings leave the counties where the booms are ongoing, as commuting men and women takes their money back home, or spend it in nearby counties. Growth in the oil and gas sector generally boosted earnings and employment in drilling counties. In non-metropolitan counties, every additional dollar earned in oil and gas boosted earnings in other industries by 30 cents. Metropolitan counties saw an increase of 10 cents per dollar. The study didn’t consider the impact of oil and gas royalty or lease payments, and noted the quality of data might be lower in counties where the oil and gas sector was small. The impact on earnings varied from region to region, according to the study. In the Marcellus Shale play, including Ohio, oil and gas development had crowded-out other economic activity, the study found. “Ultimately, our findings are in line with the previous research on previous energy booms,” Weinstein told Kallanish Energy. “The economics literature on the impact of energy booms like this fairly consistently shows that the economic impact of energy booms is more modest than initial predictions from the energy industry suggest, and that long-run outcomes are an issue for most energy-dependent areas.”
Environmentalists question Pennsylvania’s new methane rule — The administration of Democratic Gov. Tom Wolf is pushing a regulation to control methane emissions from existing natural gas facilities that doesn’t directly target the potent greenhouse gas, raising alarm among environmental groups. Instead, the proposed rule sets limits on smog-forming volatile organic compounds, or VOCs, emitted by Pennsylvania’s enormous gas industry, with methane reduction listed as a “co-benefit.” The rule, which is working its way through the regulatory process, doesn’t establish specific emissions standards for methane, the primary component of natural gas and a key contributor to climate change. Administration officials say they’re under a federal mandate to do something about VOCs, a component of ground-level ozone that can worsen bronchitis and asthma and contribute to premature death from respiratory disease. They say that controlling VOCs will also help reduce fugitive methane emissions since both are a result of gas production. “The techniques for reducing VOCs are the same as the ones for reducing methane, so you’re getting at the problem by doing the VOC regulation,” Environmental groups criticize that approach, however, questioning why the state wouldn’t directly regulate the gas industry’s methane emissions. Pennsylvania is the nation’s No. 2 gas-producing state after Texas. The proposed regulation “took the focus completely away from the methane part of the equation, which, by greenhouse gas emission standards, is the largest issue at natural gas operations in Pennsylvania,” The proposed rule, which goes before an advisory committee on Thursday before heading to the Environmental Quality Board, the state’s primary environmental rulemaking body, is part of Wolf’s 2016 plan to curb gas industry methane emissions.
Pennsylvania governor under scrutiny for role in approving pipeline – Internal government records obtained by the Guardian raise questions about the role of Pennsylvania governor Tom Wolf in permitting construction of a controversial fossil fuel pipeline that now faces two criminal investigations stemming from widespread environmental and property damage.Tom Wolf, who is a Democrat, has received substantial donations from companies with a financial stake in the Mariner East 2 natural gas liquids pipeline. The 350-mile, $2.5bn Mariner East 2 natural gas liquids pipeline through southern Pennsylvania has sparked growing outrage. It has caused roughly 140 documented industrial waste spills into wetlands and waterways, destroying numerous residential water wells, and opening large sinkholes just steps from residents’ homes. Emails, text messages and regulatory records show that the secretary of Pennsylvania’s department of environmental protection (DEP), Patrick McDonnell, directed staff to cut short their environmental review even as numerous shortcomings remained in the project’s permit application. The department also appeared to be under pressure from Wolf’s office at the time. DEP staff internally circulated two “deficiency letters” on 20 January 2017 that they were preparing to send to an ETP subsidiary, Sunoco Logistics, citing inadequacies in the company’s plans concerning earth disturbance activities and drilling beneath water bodies. Five days later, a senior official in Wolf’s office, Yesenia Bane, texted McDonnell to request the agency refrain from sending a deficiency letter, pending a meeting involving Wolf, the governor’s chief of staff, and McDonnell.“Understood,” McDonnell wrote in response. Less than an hour later, McDonnell emailed several staff members involved in the pipeline review that “Govs [sic] office needs a list of the outstanding issues ASAP”.Roughly two weeks after that, the DEP approved the pipeline without requiring many of the environmental safeguards it had initially sought. A DEP senior official who was involved in the Mariner East 2 project, John Stefanko, noted in a later legal deposition that McDonnell had directed staff “that we needed to make a decision by February 10th”, although the review had been scheduled to persist for at least several additional months.The text messages and a handwritten note from a DEP staff member show that the then CEO of Sunoco, Mike Hennigan, regularly talked to McDonnell in the lead-up to the permit authorization, and that McDonnell reported to the governor’s staff on those conversations.
Chester County sues Sunoco over Mariner East pipeline – Chester County has sued Sunoco over its controversial Mariner East pipelines, asking the court to prohibit the company from starting construction on two county-owned properties, the county commissioners said Wednesday.This marks the first time county officials have initiated a civil suit over the project, although in February they intervened in an existing legal challenge brought by several residents from Delaware and Chester Counties against Sunoco and its parent company, Energy Transfer Partners, involving safety risks. On Friday, Sunoco representatives told county employees that they intended to begin open trench construction of Mariner 2 on Chester County Library property in West Whiteland Township, the commissioners said. That excavation method, however, is not permitted on county land without special permission.“Sunoco must understand that the county owns this property,” Michelle Kichline, chair of the Chester County Board of Commissioners, said in a statement, “and we have the right to ensure as they cross county land that adjacent neighbors and our citizens are not adversely affected in any way.” The commissioners are asking Chester County Court to restrict Sunoco from constructing pipelines on the library land in Exton, as well as on nearby Chester Valley Trail property. Sunoco’s $5.1 billion plan is to build three adjacent pipelines, which would transport natural gas liquids such as propane from western Pennsylvania to the Sunoco refinery in Marcus Hook. Over the last several months, Chester County District Attorney Thomas P. Hogan, Pennsylvania Attorney General Josh Shapiro, and Delaware County District Attorney Katayoun M. Copeland have launched criminal investigations into the project’s construction, citing environmental risks and safety concerns.
Judge orders tiny Pa. township to pay $103000 in expenses – A federal judge has ordered a tiny Pennsylvania township to pay nearly $103,000 in legal fees and expenses to an independent producer behind a proposed injection well after the township’s fracking-waste bans were thrown out by the courts.The payment will come from Grant Township in Indiana County in west-central Pennsylvania, roughly 70 miles northeast of Pittsburgh. The producer involved in Warren, Pennsylvania Pennsylvania General Energy Co (Pge). Grant Township, with just 698 residents must pay a portion of Pge’s legal fees after the company successfully challenged the township’s fracking waste bans that had asserted rights of nature/home rule by the township and claimed sweeping rights to self-government, Kallanish Energy reports. U.S. District Judge Susan Paradise Baxter in Erie, Pennsylvania, awarded the money to Pge. The township has told Pennsylvania media it does not have the money to make such a payment. “This is not great. This is a terrible thing to put a community through,” Stacy Long, a member of the Grant Township’s board of supervisors, told StateImpact Pennsylvania. The township has not decided if Baxter’s decision will be appealed. The Indiana Gazette newspaper says the cost would be equal to $147.53 per resident. The decision is also a major blow to the Pennsylvania-based Community Environmental Legal Defense Fund (Celdf), a non-profit public interest law firm that has pushed its rights of nature/community bill of rights movement in Pennsylvania, Ohio, Colorado, Washington, Oregon, New Mexico and New Hampshire. It has worked with more than 200 communities.
Haunting Poems and Photos From a State Torn by Fracking – When Julia Spicher Kasdorf pulled off Pennsylvania’s Route 15 on her way upstate in 2012, she noticed something she’d never seen before. Across the highway, by the restaurant where she and her husband stopped for lunch, helicopters dangling strange pendants were hovering over the mountainside. Kasdorf, a poet and English professor at Pennsylvania State University, asked her server what was going on. “Those guys are here because of fracking,” the waitress said. Oil and gas companies were doing seismic testing for a new pipeline.Kasdorf grew up in central Pennsylvania surrounded by dairy farms. She’d seen the way coal mining had ravaged the state’s southwest, but this destruction was new. Determined to keep an open mind, she began seeking out stories from people affected by fracking. Her curiosity turned into a six-year project and a collaboration with documentary photographer Steven Rubin that culminated in their recent book, Shale Play: Poems and Photographs from the Fracking Fields. In her university town, State College, Kasdorf was cloistered from the realities of fracking. As she began her research, however, she became aware of the discord between rural residents she spoke with, who saw fracking as a lifeline in poor communities, and her friends in East Coast cities, who questioned why Pennsylvania would allow extraction companies to destroy the state’s natural environment. “I was really determined to keep an open mind,” Kasdorf says. “My impulse was to defend rural people for whom making a living has become increasingly difficult. If fracking means you can keep your farm, am I going to stand in judgment about that? I didn’t know.”
The Energy Edge: Marcellus/Utica Country Now Largest Global Source of Natural Gas – Ohio, Pennsylvania and West Virginia have solidified their place atop the natural gas production food chain, and this growing dominance is showing no signs of slowing down. Doubters of the potential of this world-class resource now seem like a distant memory and operators continue to more efficiently develop the resource.The Marcellus and Utica shale formations found across the tri-state region have become the largest sources of natural gas and natural gas liquids in the world. Now, new research shows that energy production from these sites will grow exponentially over the next 20 years. According to IHS Markit, 41 percent of the natural gas produced in the U.S. will come from this tri-state area by 2040, up from 31 percent this year. Other profitable natural gas liquids, such as ethane, propane and butane are expected to nearly double in production over this same period. By 2040, production of those liquids in Ohio, Pennsylvania and West Virginia will account for 19 percent of the nation’s total by 2040, up from 14 percent in 2018. We’ve seen this regional dominance coming for some time now. Natural gas production across the tri-state area has grown significantly over the last several years by the U.S. Energy Information Administration’s count. In fact, the Marcellus Shale area recently surpassed Texas in natural gas production earlier this year, a development almost no one thought possible a decade ago. Combined with the nation’s increasing reliance on gas and the natural resource’s favorable economics, energy production in this area of the country is experiencing unprecedented growth. These trends are attracting the attention of investors. Officials from Ohio have indicated the abundance of natural gas and gas liquids has drawn in additional projects as companies seek to expand and construct new production plants in the region. The next step is bringing this vast resource downstream, enabling the cost-effective energy supply to reach more consumers through various fuels, petrochemicals and other products. Public and private leaders now face an historic opportunity to continue to build off of prior job-creating investments in the region to attract new investment through smarter and more predictable permitting, tax policy and highlighting the region’s vast supply of available sites for new construction.
The Fracking Hub: Is Appalachia the Next Cancer Alley? – When it comes to boom-and-bust extractive industries, Appalachia has been there, done that. It’s endured coal mining, clearcutting, and most recently, the fracking boom. Now, as the country is moving toward renewable energy and mountain towns are leaning into outdoor recreation, politicians and international investors are putting their weight behind a fossil-fueled plan to turn the Ohio River Valley into a petrochemical powerhouse.A development group is seeking a $1.9 billion loan guarantee from the U.S. Department of Energy to build the Appalachia Storage and Trading Hub – a network of underground caverns to store petrochemical byproducts of the natural gas fracking in Appalachia. In December, U.S. Energy Secretary Rick Perry wrote an op-ed in support of the hub, calling it “an opportunity we can’t afford to waste.” West Virginia Gov. Jim Justice said it’s the “number one economic focus of my office today.” And U.S. Sen. Joe Manchin of West Virginia identified it as a priority in his agenda as ranking member of the Senate Energy and Natural Resources Committee. If the Appalachia Development Group, the developers behind the hub, can secure the necessary funding, it will still be several years before the hub is up and running. Communities within the region, however, already are seeing the petrochemical infrastructure beginning to take shape.In November 2017, China Energy Investment Corp. Ltd. agreed to invest $83.7 billion in natural gas development in West Virginia, including in chemical byproducts. Royal Dutch Shell is pursuing a $6 billion ethane plant in southwestern Pennsylvania, while PTT Global Chemical and South Korea-based Daelim Industrial Co. is planning a similar plant in southeastern Ohio. Another company, Mountaineer NGL, is working its way through permitting for six salt caverns to store natural gas liquids near Wheeling, West Virginia.Each one of those announcements represents a major industrial project that has inspired both hope and fear. Paired with the Appalachian Storage and Trading Hub, however, they amount to a massive buildout of extractive infrastructure with the potential to affect the five million people who rely on the Ohio River for drinking water, not to mention the growing outdoor economy built around the waterway.
Marcellus and Manufacturing conference draws People Over Petro protestors – As the gas industry celebrated its progress inside the Marriott at Waterfront Place, outside by the rail-trail close to 40 people assembled to protest the expansion of the plastics industry. They called themselves People Over Petro, and the three-hour protest was coordinated by the Ohio Valley Environmental Coalition. OVEC Project Coordinator Dustin White told the group, “They scream jobs and like a carrot on a stick, and politicians chase them.” Out-of-state and out-of-country companies come to capitalize on West Virginia’s people. They minimize the health impacts, such as cancers and neurodevelopmental defects. There’s an aspect of futility in developing the industry here, he said, because 40 percent of plastics are single use. “Where is the market?” He led the group in a short chant, “No more toxic jobs in Appalachia!” Protestors carried a variety of signs: “People and environment over plastic”; “People before pipelines”; “End death by plastic”; “The Ohio River is not a sacrifice zone.” One protestor in a red parrot costume carried a colorful sigh: “Poly doesn’t want a cracker.” B.J. McManara spoke at length about petrochemical plant pollution and possible health effects. “We are here as water protectors, protectors of the future for the next seven generations.” The balancing act of health and environmental concerns versus the reality of daily living was evident: One protestor carried a plastic-bodied camera, carried her notes on a plastic clipboard and stored her goods in a synthetic-fiber backpack. Other protestors wore plastic-frame eyeglasses and synthetic shoes and carried plastic cell phones. Ethan Cade is a WVU student and member of the WVU Sierra Student Coalition. “The young people of West Virginia are tired of the big corporations pillaging our state,” he said. They have no concern for West Virginia or its people. They come, pollute the land and make people sick “for a quick buck.” Following the organized speaking portion of the protest, the group moved to the front of the hotel to make its presence known to passersby.
Officials Push Petrochemical Expansion, Protestors Fight Back – State and federal politicians announced initiatives this week to move forward an effort to build a major underground natural gas liquids storage facility in the Ohio Valley, an effort opposed by environmental activists who fear a petrochemical expansion in the region will threaten not only the environment, but public health. The Appalachian Storage and Trading Hub has been in the works for almost a decade. Developers are seeking billions in loan guarantees from the Department of Energy. This week, Gov. Jim Justice met with officials from the U.S. Department of Energy to discuss the hub and developing the petrochemical industry in West Virginia. In a press release the governor said he would appoint a liaison to work with Energy Department officials on these issues.“It is absolutely vital that we create a petrochemical industry in West Virginia versus building more pipelines that leave our state without creating any long-term manufacturing jobs,” Justice stated.Officials from West Virginia, Ohio and Pennsylvania support efforts to bring cracker plants and other plastics manufacturing infrastructure to the Ohio Valley, which sits upon two of the nation’s most productive natural gas and natural gas liquids repositories, the Marcellus and Utica shale formations.A 2018 study by the Department of Energy estimates the largest growth in natural gas liquids production is expected from this region. “Ethane production in Appalachia is projected to continue its rapid growth in the coming years, reaching 640,000 barrels per day in 2025 – more than 20 times greater than regional ethane production in 2013,” the report state. “Petrochemicals are not energy. It’s plastic,” said Belmont County, Ohio resident Bev Reed. “It’s a dead product that doesn’t go anywhere except to poison people.”
‘Virtually No Risk of Drilling Restrictions,’ West Virginia Official Tells Fracking-Reliant Petrochemical Industry – DeSmog This week, at an industry conference focused on wooing petrochemical producers to West Virginia, officials from the state and federal government made clear their support for continuing fracked shale gas extraction and petrochemical industry development near the natural gas-rich Marcellus Shale. Why should petrochemical companies build in West Virginia, Pennsylvania, and Ohio? For one thing, don’t expect regulation of shale gas drilling, Michael Graney, executive director of the West Virginia Development Office, predicted in his presentation. “Contrasted to other U.S. regions, Tri-State region is industry-supportive and industry-friendly,” read a slide that Graney, who was appointed by West Virginia Governor Jim Justice in September 2018, presented to the conference. “Virtually no risk of drilling restrictions.” Graney also elicited “hallelujahs” from the crowd after describing West Virginia’s low worker turnover rates. “We have earned an A from the Cato Institute in fiscal policies,” he told representatives from fossil fuel and petrochemical companies, referring to a libertarian think tank that Sourcewatch describes as “founded by Charles G. Koch and funded by the Koch brothers.” Officials from the U.S. Department of Energy (DOE) offered the petrochemical industry the services of the federal government. “And what we’re going to do is everything within the government’s power to shine a bright light on this and help get this over the finish line,” Steven Winberg, the Department of Energy’s Assistant Secretary for Fossil Energy, told the conference. “With regard to DOE, there’s a couple of things that we can do. One is, private sector investors can take advantage of the DOE’s loan guarantee program.” “We can walk you through that process, the loan guarantee process that the DOE has,” he continued. Second, the Department of Energy hired a full-time staffer to push for petrochemical projects, according to Winberg, a former vice president for the coal and natural gas producer CONSOL Energy. “Secretary Perry gave me instructions to get somebody on board full time to work on behalf of the federal government to make this happen. And that somebody is Ken Humphreys.”“I want to put a name with a face – so this is your guy here,” Winberg said, asking Humphreys to stand. “It is his job to do whatever the federal government can to help make this a reality.”
MarkWest Sherwood Complex in Doddridge County, WV, plans further capacity expansion in 2019 – The operators of the MarkWest Sherwood Complex in Doddridge County plan to further expand the facility’s capacity this year. Randall Eastham, facility manager of the Sherwood Complex, said it has 2.2 billion standard cubic feet per day of processing capacity, making it the largest gas-processing facility in the nation. “We plan to expand it by another 400 million cubic feet per day this year,” he said. “Gas processing removes the heavier and more valuable hydrocarbon components of natural gas, which are extracted as a mixed natural gas liquids (NGL) stream, which includes ethane, propane, butane and natural gasoline.” Liquid natural gas has multiple commercial applications, Eastham said. “They are used as inputs for petrochemical plants, burned for space heating and cooking and blended into vehicle fuel,” he said. “In addition, Sherwood has a 60,000-barrel per day de-ethanization plant, which removes ethane from the other NGLs. We plan to expand this de-ethanization capacity by 20,000 barrels per day this year.” MarkWest is a wholly owned subsidiary of MPLX. The complex is part of MPLX’s system that provides gas gathering and processing in the Marcellus and Utica shale regions. “We employ about 220 people and retain the services of hundreds of contract workers as well,” he said. The company has spent more than $10 billion building infrastructure in the region over the last decade, Schupbach said. In 2017, MPLX entered into a partnership with Antero Resources, which allowed it to expand the Sherwood Complex’s capacity, Schupbach said. “We formed a joint venture with Antero Midstream Partners LP to support Antero Resources’ development in the Marcellus Shale,” he said. “At the time we formed the joint venture, Sherwood’s six cryogenic processing facilities had a total capacity of 1.2 billion cubic feet per day. “At the time the joint venture was formed, ongoing development of gas processing infrastructure included three new joint-venture processing facilities totaling an additional 600 million cubic feet per day of processing capacity for Antero Resources. Since then, another 400 million cubic feet per day of capacity has been added.” MPLX has plans in the works for another natural gas facility in Doddridge County to be called the Smithburg Complex, which will have the capacity to process 1.2 billion cubic feet per day, Schupbach said.
WV oil and gas production projections optimistic; industry continues to set, break records – The evidence of North Central West Virginia’s continued oil and gas boom is hard to miss. From parking lots filled with heavy-duty pickup trucks to campsites packed with recreational vehicles, the signs of the industry’s activities are everywhere. Industry experts say production levels for both oil and gas remain on the rise, with new records being set year after year, and projections for the future remain positive.Anne Blankenship, executive director of the West Virginia Oil & Natural Gas Association, said it’s impossible to overstate the importance of the role the state’s extractive industries play in its economy.“The oil and natural gas industry is a major economic driver in the state and has the potential to grow even more significantly over the coming years and decades,” she said. “We have only begun to scratch the surface of developing this enormous resource beneath us.”According to information complied by WVONGA, natural gas production increased by more than 9 percent between 2016 and 2017, while oil production grew by 14.6 percent during the same time period.A total of 1,514,277,709 thousand cubic feet of natural gas and 7,558,169 barrels of oil were produced in the state in 2017, the most recent year for which production data is available.During fiscal year 2018, severance tax collections increased by nearly 4.4 percent over the previous fiscal year. Collections for fiscal year 2017 were $133,052,031 and rose to $138,844,391 for fiscal year 2018.Natural gas pipeline construction jobs – including work on the Atlantic Coast Pipeline and Mountain Valley Pipeline projects – increased over 400 percent between the first quarter of 2017 and the second quarter of 2018.
Trump Said to Seek Limit on State Power Over Pipelines – Developers have been trying for six years to build a 124-mile natural gas pipeline from Pennsylvania to New York. Despite winning a federal approval in 2014, the project is still no closer to reality. Enter President Donald Trump, who on Wednesday is poised to issue two executive orders to promote energy infrastructure, including projects like the long-stalled Constitution Pipeline, according to an administration official. The orders will direct federal agencies to make specific changes meant to remove bottlenecks to natural gas transport in the Northeast and streamline federal reviews of border-crossing pipelines and other infrastructure. One of the orders seeks to short-circuit regulators in New York who have denied the planned pipeline a crucial permit, invoking their powers under the Clean Water Act to reject projects they deem a threat to water supplies and the environment. Other states and tribes have wielded the power to restrict a coal export terminal and hydropower project on the U.S. West Coast — which has frustrated the industry. Trump’s orders comes as the president continues to chafe at regulatory barriers he says throttle the full potential of American “energy dominance.” One of the executive orders is aimed at facilitating the shipments of U.S. natural gas in the Northeast, where limited pipeline capacity and legal constraints prompted the region to import natural gas from Russia last year, according to the administration official who asked not to be identified. It would ask the Department of Transportation to propose a new regulation to treat liquefied natural gas like other cryogenic liquids, allowing it to be shipped by rail in approved tank cars, something that isn’t allowed today. Trump will also direct regulators to develop a master agreement for placing energy infrastructure in federal rights-of-way — a move aimed at expediting approvals and renewals.
Trump talks fracking with NY Gov. Cuomo – -President Trump Tuesday told New York Gov. Andrew Cuomo he should open his state to hydraulic fracturing to improve its economy, various media reported Wednesday.The two spoke at the White House after Cuomo requested a meeting to discuss a provision in the Republicans’ 2017 tax-cut law that caps state and local tax (Salt) deduction at $10,000.Cuomo is blaming Salt for a $2.3 billion plunge in New York State tax receipts.Deputy press secretary Judd Deere said in a statement Trump listened to Cuomo’s concerns about Salt, and “reiterated the negative impact that high taxes in states like New York have on hardworking families and job creators.””The President discussed economic growth opportunities for the State of New York, including helping lower energy prices throughout the entire Northeast by allowing low-cost, American energy to thrive with fracking and pipeline systems,” Deere said. “The two also discussed the need to update America’s outdated infrastructure system.”Cuomo signed a law effectively banning fracking in New York State roughly four years ago, citing health risks. The governor has faced criticism for the stagnating economy in parts of Upstate New York, especially from counties on the Pennsylvania border, where residents can look across the border and see the impact of drilling and fracking in the Marcellus and Utica Shale plays.Trump earlier this month suggested those in Upstate New York struggling to find prosperity should “go to another state where they can get a great job.” “It’s ironic that the same Democrats who criticized the Tax Cuts and Jobs Act for supposedly benefiting only the wealthy are now advocating for a change to the law that would primarily benefit the wealthy,” said Michael Zona, a spokesman for Republicans on the Senate Finance Committee, Fox News reported.
Trump executive order will aim to prevent states from blocking pipelines, energy infrastructure –President Donald Trump will issue an executive order that aims to prevent states from blocking pipelines and other energy infrastructure by using authority granted to them under the Clean Water Act.Senior administration officials on Tuesday previewed the action and several others, which are contained in two executive orders that Trump will sign during a trip to Texas on Wednesday. They are the latest in a series of executive orders by Trump meant to roll back energy regulations and promote fossil fuel development.The new executive order represents a shot from the White House in the ongoing battle between beltway Republicans and Democratic governors opposed to fossil fuel developments in their states. It has been anticipated for nearly three months and is expected to be challenged in court.The state powers are laid out in federal law, and a presidential order cannot override them, some lawyers and energy analysts have said.Under Section 401 of the Clean Water Act, companies must obtain certifications from the state before they can build federally-approved infrastructure, like pipelines, within that state’s borders.States can refuse to issue the certifications if they determine the project will have a negative impact on water quality within their jurisdiction, even if the project has gotten the green light from the Federal Energy Regulatory Commission, the independent panel that regulates interstate pipelines and transmission lines. Republican lawmakers have accused Democrat-controlled states of abusing their power under Section 401 to block FERC-approved infrastructure tied to fossil fuels.
Trump signs orders making it harder to block pipelines (AP) – President Donald Trump’s support for shifting more power to states on Wednesday faded next to his affinity for oil and gas production, as he aimed to make it harder for states to block pipelines and other energy projects due to environmental concerns. At the urging of business groups, Trump signed two executive orders designed to speed up oil and gas pipeline projects. The action came after officials in Washington state and New York used the permitting process to stop new energy projects in recent years, prompting complaints from Republican members of Congress and the fossil fuel industry. “Too often badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists,” Trump complained before signing the orders. The Trump administration insisted it was not trying to take power away from the states but, rather, trying to make sure that state actions follow the intent of the Clean Water Act. Under a section of the law, companies must get certification from the state before moving ahead with an energy project. Washington state blocked the building of a coal terminal in 2017, saying there were too many major harmful effects including air pollution, rail safety and vehicle traffic. Tap to unmuteNew York regulators stopped a natural gas pipeline, saying it failed to meet standards to protect streams, wetlands and other water resources. Less than a week ago, nearly a dozen business groups told Environmental Protection Agency Administrator Andrew Wheeler that the environmental review and permitting process for energy projects “has become a target for environmental activists and states that oppose the production and use of fossil fuels.” The groups said in an April 5 letter that individual states shouldn’t be able to use provisions of the Clean Water Act “to dictate national policy, thereby harming other states and the national interest and damaging cooperative federalism.”
WV senators applaud President Trump’s orders on pipelines – West Virginia lawmakers are applauding President Donald Trump’s efforts to speed up natural gas pipeline projects. Trump issued a pair of executive orders Thursday aimed at making it harder for states to block pipelines and other energy projects due to environmental concerns. “Too often, badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists,” Trump said before signing the orders. Both Sen. Shelly Moore Capito, R-W.Va., and Sen. Joe Manchin, D-W.Va., issued statements voicing their approval of the president’s actions. Manchin praised the role of Energy Secretary Rick Perry, who the senator said took steps to recognize the importance the Appalachian region plays in the nation’s energy industry. Manchin said he is hopeful the orders will help accelerate development of the proposed the Appalachian Storage Hub, a long-discussed project that many see as the future of the state’s oil and natural gas industry. “After talking with Secretary Perry this week and after today’s executive order, I am more confident than ever that the administration is serious about being a partner in helping us develop the Appalachian Storage Hub,” Manchin said. “Since 2017, I have been working with the administration and Secretary Perry to make sure they understood the positive economic impact and the potential energy security an Appalachian Storage Hub will bring to West Virginia and the country,” Manchin said. “I have long said that the Appalachian Storage Hub is a vital project that will help us capitalize on our state and region’s abundant natural resources, growing infrastructure and innovative spirit.” Capito said she also believes the executive orders are a positive development for West Virginia. “Political games are preventing West Virginia energy from being sent to places that need it. The United States is energy rich, and we should make it easier to use energy resources produced in West Virginia to meet demand across America,” she said. “We should also facilitate coal and liquid natural gas exports to promote West Virginia jobs. Earlier this year, I sent Environmental Protection Agency Administrator (Andrew) Wheeler a letter voicing my concern with certain states blocking natural gas pipelines for political reasons, and I have worked hard to end the previous administration’s war on coal. I’m glad to see the president once again asserting American leadership in energy today.” Representatives of Dominion Energy, the company leading the Atlantic Coast Pipeline project, declined to comment for this article.
Trump executive order could affect future of stalled Constitution Pipeline -President Donald Trump wants to make it easier for companies to transport natural gas from places like Pennsylvania to the Northeast. He signed an executive order this week that would speed up pipeline permitting. It takes aim at states like New York that have blocked pipeline projects that would carry Marcellus Shale gas to markets in the Northeast, where gas is not always readily available. Trump’s order also opens the door to natural gas being transported by rail. “Too often, badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists,” the president told a crowd gathered Wednesday at an International Union of Operating Engineers facility in Crosby, Texas before he signed several executive orders related to oil and gas. Trump’s directive stems in part from New York’s denial of a water quality permit for the Constitution Pipeline, among other projects blocked by states under the federal Clean Water Act. New York in 2016 halted the Constitution project, which would carry gas north from Susquehanna County. The fight over the pipeline continues to play out in court and among regulatory agencies. In his executive order, Trump directs the Environmental Protection Agency to issue new permitting guidance to states. He did not explicitly say how states’ authority should change, but he said the EPA’s review should focus on “the need to promote timely Federal-State cooperation and collaboration” and “the appropriate scope of water quality reviews.” Trump also asked the EPA to go a step further by formally revising its rules surrounding that portion of the Clean Water Act. Pennsylvania’s natural gas industry welcomed Trump’s order. “If you have the rules in place where the game is fair in terms of siting pipelines and critical infrastructure projects, then I think it opens the door for new development,” said David Spigelmyer, president of the Marcellus Shale Coalition, an industry trade group. Still, the fate of the Constitution Pipeline is unclear. Williams, the lead developer of the project, said in a statement that it “supports efforts to foster coordination, predictability and transparency in federal environmental review and permitting processes for energy infrastructure projects.” The company, however, declined to comment specifically on the president’s order and what it means for the future of the pipeline.
Trump executive orders to speed up gas, oil projects draw rebuke from Maryland, Delaware officials – Aiming to streamline oil and gas pipeline projects, President Donald Trump on Wednesday signed two executive orders making it harder for states to block construction because of environmental concerns.The orders were prompted by fossil fuel industry pressure after officials in New York and Washington state had stopped new projects with permitting processes in recent years. “Too often, badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists,” Trump said before signing the orders in Texas at the International Union of Operating Engineers International Training and Education Center.In 2017, Washington state blocked construction for a coal terminal, citing air pollution, rail safety and vehicle traffic concerns. Regulators in New York likewise blocked a natural gas pipeline because of standards to protect streams and wet lands, despite the Federal Energy Regulatory Commission approving the project in 2014. Trump called out New York, saying “obstruction” by the state “was hurting the country.” Democratic Gov. Andrew Cuomo described the orders as a gross overreach threatening environmental protections. One order requests the Environmental Protection Agency meet with states and tribes before creating new rules for complying with the Clean Water Act. It also calls for proposing a rule allowing liquefied natural gas to be shipped in approved rail tank cars. The move has drawn sharp criticism by Delmarva politicians, including Maryland Gov. Larry Hogan. “This top-down order threatens to undermine good environmental stewardship. It could seriously jeopardize our historic Chesapeake Bay restoration efforts, including our regional partnership to reduce pollution and debris at the Conowingo Dam,” Hogan said a news release. “From day one, our administration has worked with the federal government to ensure responsible environmental protections and safeguards when permitting dams, pipelines, and other infrastructure projects. State sovereignty should never be shortchanged under the guise of government streamlining.
Study: Natural gas pipelines leaking in Danbury, other cities – A new survey of natural gas pipelines in Danbury and other Connecticut cities shows methane is seeping into the air from underground pipes and could cause a disaster similar to the explosions last year that rocked three Massachusetts towns. “It’s just a matter of rate and time and situation that determines if any of these leaks are going to be dangerous,” said Nathan Phillips, a University of Boston professor who participated in the study conducted for the Connecticut Chapter of the Sierra Club. The study found an average of 3.6 leaks per mile of underground gas lines in Danbury. The Hartford results showed an average of 4.3 leaks per mile and 2.6 leaks per mile in New London. “The potential for what happened in the Merrimack Valley [in Massachusetts] exists in Connecticut,” Phillips said. “It was the same kind of low pressure gas line that the study surveyed.” Last September, exploding underground gas lines in Massachusetts damaged as many as 40 homes and caused over 80 individual fires in Lawrence, Andover and North Andover. The cause of the explosions was blamed on human error related to nearby construction work. Sierra Club members and others said it’s time to strengthen laws regarding leaks while transitioning from carbon-based energy sources to renewable energy. “This report shows again that Connecticut has a real problem with gas leaking from pipes, and that we urgently need legislation that incentivizes gas companies to repair this ongoing hazard,” said Leah Lopez Schmalz, chief program officer for the Connecticut Fund for the Environment. An earlier survey by the Sierra Club found similar leak frequency levels in Hartford. Martha Klein, a past Sierra Club president, said the state has not improved leak regulation or detection since the club’s previous study
Containership may have leaked 100,000 gals. of oil along East Coast – A containership discovered to be leaking fuel oil in New York may have spilled up to 100,000 gals. during a transit up the U.S. East Coast from Florida, Coast Guard officials said. The 922’x102’x33’, 54,155-dwt Dublin Express, operated by Hapag-Lloyd, was identified as the source of a March 28 spill in the Arthur Kill waterway, at the Global New York Container Terminal near the Goethals Bridge between Staten Island, N.Y., and New Jersey. Oil sheens and tar balls showed up on New York beaches in the following days. A 15″ hole was found in a fuel tank with 300,000 gals. capacity, and chemical analysis by the Coast Guard confirmed Dublin Express oil matched what cleanup teams had found. About 35,000 gals. of oily water was recovered from the Arthur Kill. Based on what its investigators found and information from ship operators, Coast Guard officials believe the containership may have lost as much as 100,000 gals. of fuel oil through the leak. The cause has not been determined. Environmental damage appeared to be minor, with four oiled birds recovered and delivered for rehabilitation to Tri-State Bird Rescue and Research, Newark, Del. “This response was a joint effort between state and federal agencies and the responsible party,” said Capt. Jason Tama, the Coast Guard captain of the port in New York and the federal coordinator for the spill response. “We take any release of oil into the maritime environment extremely seriously, and we are thankful for the quick and efficient response from all agencies involved.”
Lawmakers endorse ban on oil and gas drilling off Maine’s coast – A legislative committee Friday endorsed a bill that aims to send a message to federal officials by prohibiting exploration or drilling for oil and gas in Maine’s state-owned waters.Members of the Legislature’s Environment and Natural Resources Committee voted 7-4 to support a ban on “any oil and natural gas exploration, development or production in, on or under the waters of the state.” The state’s jurisdiction extends only three miles from shore, but supporters say the bill, L.D. 955, also would prohibit transportation of oil and gas through state waters to onshore facilities. Committee members supporting the bill stressed Friday that they do not want that language to interfere with importation of heating oil, natural gas or other petroleum products to existing facilities in Maine, such as the South Portland oil terminal. As a result, they directed the committee’s legislative analyst to draft additional language – subject to final approval – ensuring existing facilities are not affected. “I think we need to be careful and clarify that that’s not the intent of this bill,” Several other states in New England and the Mid-Atlantic have adopted or are debating similar prohibitions in response to the Trump administration’s stated intent to dramatically expand offshore oil and gas development.The U.S. Department of the Interior, which administers oil and gas leases in federal waters, is finalizing a five-year energy plan that, as originally proposed in early 2018, would reopen the North Atlantic and 90 percent of the nation’s Outer Continental Shelf to fossil fuel exploration. Governors, legislators and citizens all along the Eastern Seaboard have objected to the plan. All four members of Maine’s congressional delegation oppose fossil fuel exploration off Maine’s coast. And Gov. Janet Mills withdrew Maine from a coalition of governors that supported expanded offshore oil and gas drilling.
Fatal Natural Gas Explosion Rocks Durham, NC — One person was killed and 17 were injured after a natural gas explosion in Durham, North Carolina Wednesday morning. The explosion occurred at 10:07 a.m., about 30 minutes after firefighters responded to a 911 call reporting the smell of gas in the 100 block of North Duke Street, Fire Chief Robert J. Zoldos II told The Durham Herald-Sun. The firefighters had begun evacuating nearby buildings when the blast destroyed one building and damaged four others, sending up a plume of dark smoke.”It looks like the front of the Pentagon on 9/11 – but on a very, very small scale,” Zoldos, who was a first responder during the attacks, told CBS. Witness Jim Rogalski, who was working in a nearby office, described the scene to CNN in a text message.”Half the block is destroyed,” Rogalski wrote. “Lots of injuries. Our office across the street was blown out. It was terrifying. Glass and debris everywhere. No one killed in our office but several injuries – deep cuts, head lacerations.”Zoldos told the Durham Herald-Sun that he contacted Dominion Energy, the company that supplies gas to Durham, after receiving the 911 call. Dominion tweeted that its subsidiary PSNC Energy “responded to a call about third-party damage to a natural gas line and the explosion occurred shortly thereafter.” Additional PSNC crews shut off gas to the area following the blast. Dominion has been the driving force behind the controversial Atlantic Coast Pipeline, which would bring fracked natural gas through West Virginia, Virginia and North Carolina. Dominion has said it will appeal to the Supreme Court after an appeals court tossed key permits for the project over environmental concerns. For anti-pipeline group No ACP!, the explosion underscored the dangers of using gas as an energy source. “They tell us gas is safe but it’s clearly not,” the group tweeted.
Massive gas explosion in Durham, North Carolina leaves 1 dead, 17 injured – One person is dead and 17 more are injured, 6 critically, following a gas line explosion Wednesday morning in downtown Durham, North Carolina. The cause of the explosion has yet to be determined. Initially, Durham Police Department spokesman Wil Glenn stated the blast was caused when a contractor digging under the sidewalk struck a 2-inch gas pipe. Subsequent reports and statements by city officials, however, have walked back that statement, “pending a complete investigation.”Durham firefighters responded to an emergency services call regarding a gas leak at approximately 9:38 a.m. The leak was limited to the 100 block of North Duke St. After firefighters arrived they contacted Dominion Energy to begin the process of isolating the gas leak and determining if an evacuation was necessary. Witnesses downtown at the time stated they could smell the characteristic odor permeating the area. Firefighters began evacuating persons near the leak at approximately 10:00 a.m.Less than ten minutes later a fireball leveled the building located at 115 N. Duke St. and caused significant structural damage to four other nearby buildings. By 10:26 a.m. additional utility crews from PSNC Energy, a subsidiary of Dominion, arrived to assist in turning off the gas, which was still leaking. One PSNC worker was injured in the explosion.Over a quarter million people live in Durham, which is home to several colleges including Duke and North Carolina Central University. Seven of those injured were taken to Duke University Hospital, while one person is being treated at the North Carolina Jaycee Burn Center at the University of North Carolina in neighboring Chapel Hill.The concussion from the blast caused glass to shatter and at least one door blew off its hinges several blocks away from the initial blast zone. Local weather radar was able to detect the fire that raged for hours afterwards as firefighters sought to contain the damage as gas continued to fuel the inferno.
Trump Plan to Ship Natural Gas by Rail Stokes ‘Bomb Train’ Fears – President Donald Trump wants to allow natural gas to be shipped in railroad cars, a move that would open new markets hungry for the fuel but could risk catastrophic accidents if one were to derail.Trump on Wednesday ordered the Transportation Department to write a new rule permitting super-chilled natural gas to be shipped in specialty tank cars. The order follows a multiyear lobbying campaign by railroads and natural gas advocates, who argue it is needed to serve customers in the U.S. Northeast, where there aren’t enough pipelines, and making it possible to use the gas to power ships and trains.“There are all sorts of new opportunities where you can use rail much more efficiently,” said Charlie Riedl, head of the Center for Liquefied Natural Gastrade group.The effort, which could help offset falling rail shipments of coal, mirrors how the oil industry turned to trains to ship crude when there weren’t enough pipelines to meet demand. But a series of spills and other accidents — including a runaway oil train that derailed and killed more than 40 people in a small Quebec town in 2013 — have safety advocates warning against putting gas on the rails. “It’s a disaster waiting to happen,” said Emily Jeffers, a staff attorney with the Center for Biological Diversity, who added that Trump’s initiative evokes earlier concerns about crude-filled “bomb trains” traveling through American cities. “You’re transporting an extraordinarily flammable and dangerous substance through highly populated areas with basically no environmental protection.” LNG is natural gas that has been chilled to minus 260 degrees Fahrenheit (minus 167 Celsius) in a process that removes water, carbon dioxide and other compounds, leaving mostly methane in a fluid that takes up less than 1/600th the space it previously occupied as a gas. It is already shipped across oceans around the globe, ferried across the U.S. in trucks and stashed in storage tanks to ensure natural gas is on hand when demand escalates. LNG does not burn on its own, and it can’t ignite in its liquefied state. The risk comes if a tank car were ruptured and LNG were exposed to the air, triggering the LNG to rapidly convert back into a flammable gas and evaporate.
Consumers Energy submits report on compressor station fire (AP) – Consumers Energy says a release of natural gas led to a compressor station fire that sparked concerns about keeping fuel flowing to millions of people during a bitter cold snap in January.The Jackson-based utility said it submitted its report on the fire Friday to the Michigan Public Service Commission . It said a plume of natural gas was released by a safety fire-gate system, mixed with air outside because of high winds, and was ignited by “extremely hot equipment” at the Ray Natural Gas Compressor Station in Macomb County.Consumers says those were the findings of its two-month internal investigation and confirmed by a third-party consultant. It says the fire “was precipitated by a safety venting fire-gate process that is proven safe and effective” but became hazardous in extreme weather.
Walz administration renews challenge to Line 3 oil pipeline (AP) – Gov. Tim Walz said Monday that his administration has renewed its challenge to a regulatory panel’s approval of Enbridge Energy’s plan to replace its aging Line 3 crude oil pipeline across northern Minnesota, saying he wants to let the legal process play out. Walz told reporters the Commerce Department refiled its appeal last week with the Minnesota Court of Appeals, which had dismissed earlier appeals in the case on procedural grounds. The independent Public Utilities Commission last month gave its final reaffirmation of its earlier approvals of the project, clearing the way for the department and the environmental and tribal groups to refile appeals that began under previous Gov Mark Dayton’s administration. “We think that that appeal should simply be heard, and that’s fair,” he said. The Democratic governor said the state’s appeal doesn’t delay the timeline for the permitting process for or construction on the replacement pipeline because the state isn’t seeking an injunction. Regulators have told Enbridge that they expect to certify all remaining state permits by November. The company hopes to put the new pipeline into service in the second half of 2020. Calgary, Alberta-based Enbridge wants to replace Line 3, which was built in the 1960s, because it’s increasingly prone to cracking and corrosion. Native American and environmental groups argue that the project risks oil spills in pristine areas of the Mississippi River headwaters region, and that the Canadian tar sands oil that the line would carry accelerates climate change. Enbridge said in a statement that it believes the courts will affirm the commission’s decisions, “which were made in accordance with the law based on full and complete evidence developed and presented over years of open and transparent regulatory and environmental review processes.” Walz was critical of lawmakers who’ve tried unsuccessfully to prohibit the state from spending taxpayer money on the appeal, calling their efforts “a gross violation of the separation of powers.” The legal issue at the heart of the Commerce Department’s appeal is whether Enbridge provided legally adequate long-range demand forecasts to establish the need for the project. The Public Utilities and Enbridge say the company did. Walz said the statutory language is ambiguous, and that there would no basis for the state’s appeal if lawmakers clarified the statute.
Minnesota Supreme Court weighs Winona County frac sand case — A sand mining company argued before the state Supreme Court on Wednesday that it should be allowed to mine silica sand in Winona County despite a local ban on the practice. Attorneys for Minnesota Sands have argued that Winona’s 2016 ban, the state’s first, violates the Commerce Clause of the U.S. Constitution and violates the company’s property rights to extract minerals. The county ban focuses on silica sand, sometimes called frac sand, which is valued by the fossil fuel industry for its strength and uniform shape, qualities that make it useful for the extraction of natural gas, oil and other natural gas liquids through fracking. The company’s arguments were rejected at the district court and appeals court levels, with appeals court justices issuing a 2-1 split decision last year in favor of the county. Wednesday’s hearing, held at the University of Minnesota Law School, lasted about an hour. The justices typically release an opinion three to five months after hearing arguments, according to the court’s website.
Pipeline owner announces safety testing “successfully completed” – On Monday, officials from Energy Transfer announced that it successfully completed its safety testing of its Panhandle Eastern Pipe Line in Audrain County. The testing was done along a 15-mile pipe section that runs west to east starting at Panhandle’s Centralia Compressor Station near Missouri Highway Z and ending near Missouri Highway J.The hydrotest, using water, was completed on Monday afternoon. Representatives from the Pipeline and Hazardous Materials Safety Administration were onsite during the testing. Energy Transfer stated that PHMSA is the regulating body for this pipeline. All tests confirming the integrity of the pipeline are now complete and the line will be prepared to return to service. Updates on timing will be provided through press releases. Panhandle Eastern Pipe Line’s transmission system consists of four pipelines extending approximately 1,300 miles from producing areas in the Anadarko Basin of Texas, Oklahoma and Kansas to Missouri, Illinois, Indiana, Ohio and into Michigan.A little more than a month has passed since the Panhandle Eastern pipeline ruptured just north of Mexico, sending a fireball into the night sky. Nobody was hurt in the incident. On Friday, the Pipeline and Hazardous Materials Safety Administration said the pipe section that ruptured has failed four hydrostatic tests. The tests involve running a gas or liquid through a pipe at 125 percent of the pipe’s maximum operating pressure for 4 hours, plus another 4 hours at 110 percent of maximum operating pressure for pipes that are not visible. KRCG 13 reviewed the parent company’s safety records and found the pipeline has had a series of ruptures.
Bullish Natural Gas Storage Data No Deterrent for Bears; Permian Cash Climbs Again – After a couple of days at a stalemate, natural gas bears took control over the futures market Thursday as they brushed off slightly bullish storage data and looked ahead to what could be a substantial improvement in storage deficits in the weeks ahead. The Nymex May gas futures contract fell 3.6 cents to settle at $2.664/MMBtu, and June slipped 3.4 cents to $2.708. Cash prices in the Permian Basin and in Western Canada continued to strengthen in an otherwise soft spot gas market where most other regions posted declines. The NGI Spot Gas National Avg. fell a penny to $2.365. With only modest changes seen in weather data during the last few days, all eyes were on Thursday’s Energy Information Administration (EIA) storage report. The EIA reported that implied flows reflected a 29 Bcf injection into storage inventories for the week ending April 5. The net change week/week, however, was a smaller 25 Bcf build, due to multiple reclassifications in the Pacific and South Central regions that moved some stocks into base gas, rather than working gas. The EIA’s reported build came in much larger than last year’s 20 Bcf withdrawal and the five-year average injection of 5 Bcf. It was, however, smaller than estimates that had pointed to a build of a few more Bcf. Nevertheless, Bespoke Weather Services viewed the EIA report as neutral. Even though the implied flow was a miss to the bullish side this week, the firm believes the miss simply negates the bearish miss the market saw in last week’s report. “Even at 29 Bcf, it is still reflective of balances that are currently quite loose.” Other analysts also noted that this week’s EIA data was likely a true-up of last week’s overstated injection. “Average the last two weeks together, and everything makes sense,” said Jacob Meisel, head of gas fundamental research at a New York energy trading firm. “Each week in isolation is harder to justify.” Meanwhile, continued loose balances point to another hefty injection versus the five-year average next week as well, according to Bespoke. On Wednesday, Tudor, Pickering, Holt & Co. said there was a potential for the EIA to report a 100 Bcf-plus build, which would be five times the five-year average. Most analysts, however, are estimating a build closer to around 90 Bcf. Broken down by region, the EIA reported a 1 Bcf withdrawal in the East and in the Midwest, a 6 Bcf net injection in the Pacific after a 1 Bcf reclassification to base gas and a 21 Bcf net injection in the South Central. Salt facilities reported 12 Bcf in implied flows, although 2 Bcf was reclassified to base gas. Working gas in storage as of April 5 stood at 1,155 Bcf, 183 Bcf below last year and 485 Bcf below the five-year average, according to EIA.
The Permian Basin, as Vast as South Dakota, Becomes World’s Highest Producing Oilfield – “Things like horizontal drilling and fracturing, the shale revolution, oil derricks that dot the landscape all throughout the Permian Basin, new drilling technology and greater energy output are transforming American life and lives all around the world,” said Secretary of State Mike Pompeo recently. Just two months after the New York Times reported that Texas and New Mexico’s Permian Basin could surpass Saudi Arabia’s Ghawar oilfield to become the highest producing oilfield in the world in the next three years, data released this week provides a new take: It already has.The Permian, as vast as South Dakota, is distinct from other shale fields because of its enormous size and thickness of its multiple shale layers – some as fat as 1,000 feet – as well as its proximity to refineries on the Gulf of Mexico. The Permian is rich in oil, and its shales are relatively easy to tap with today’s rigs. Now we know the Permian basin is now the most productive oil field in the world. As Bloomberg explains,“The new maximum production rate for the Ghawar oil filed in Saudia Arabia [3.8 million barrels a day] means that the Permian in the U.S., which pumped 4.1 million barrels a day last month according to government data, is already the largest oil production basin. “The comparison isn’t exact – the Saudi field is a conventional reservoir, while the Permian is an unconventional shale formation – yet it shows the shifting balance of power in the market.” The most recent Energy Information Administration (EIA) drilling productivity report shows the Permian produced 4.1 million barrels of oil per day in March and will come close to 4.2 million barrels per day in April.
‘Really Smart Guys’ Push to Make Biggest Oilfield Even Bigger – Standing at the center of the prolific Permian Basin, Scott Hodges explains how the future of the world’s largest oil field may very well depend on what he calls jokingly calls the “really smart guys.” Hodges, a 57-year-old manager with Occidental Petroleum Corp., runs a cluster of installations at the Hobbs oil field, where dozens of wells don’t pump a single barrel of oil but instead do the opposite: push stuff — lots of it — into the ground. Occidental runs the operation in southeast New Mexico as part of its so-called enhanced-oil-recovery program, injecting carbon dioxide and water underground to force out crude that might otherwise languish in the reservoir. EOR already works in conventional oil fields — now the company is trying to make it work commercially in shale rock. If Occidental and its rivals’ experiments with similar techniques are successful — a big if, in the view of many others — it could further transform the Permian, which is already the world’s largest oil patch. To do that, knowing how the oil, gas, CO2 and water work together thousands of feet below the Earth’s surface is crucial. “The guys who know what’s happening underground is the RSG,” Hodges says in reference to the company’s Reservoir Study Group. “That stands for the really smart guys,” he adds, laughing. While the U.S. shale revolution has boosted American oil production to a record, it’s also leaving lots of crude in the ground. At best, fracked wells only recover about a 10th of what the industry calls the oil-in-place. “We are trying to be very conservative, but certainly we believe that we can improve from 10-11 percent to 17-18 percent,” Occidental Chief Executive Officer Vicki Hollub said in an interview in Houston. “It’s a lot. When you consider the scale of the Permian basin, to do that will be amazing.”
Chevron to buy Anadarko Petroleum in a $33 billion cash and stock deal – Chevron announced on Friday it will acquire oil and gas driller Anadarko Petroleum in a cash and stock deal valued at $33 billion, marking one of the biggest energy sector mergers in years and a transformative moment for one of the industry’s dominant players. The transaction will expand the second biggest U.S. energy company’s operations in U.S. shale oil and gas production, offshore drilling and liquefied natural gas exports. The deal represents the 11th biggest ever for an energy and power company, according to Refinitiv. The acquisition launches Chevron to a new competitive level, establishing the San Ramon, California-based company as a more formidable challenger to rival oil giants Exxon Mobil, Royal Dutch Shell and BP, says energy and mining research firm Wood Mackenzie. After the deal closes, Chevron will go from being the fourth biggest international oil major by production to the second largest. “This is the biggest upstream deal since Shell and BG in 2015,” said Roy Martin, senior analyst at Wood Mackenzie. “Chevron now joins the ranks of the UltraMajors – and the big three becomes the big four.” In a sign of the value the industry places on Anadarko’s assets, fellow mini-major Occidental Petroleumattempted to buy the company, sources told CNBC’s David Faber. Occidental was prepared to pay $70 a share for Anadarko and is currently exploring its options, the sources said. Shares of Anadarko rose 33.6% following the news. Chevron shares were down 4.7% from Thursday’s close of $125.99 a share. Chevron’s deal values Anadarko at $65 per share, a 37% premium to its Thursday close. Based on Anadarko’s closing price of $46.80 on Thursday, Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share. Chevron will assume $15 billion of Anadarko’s debt.
Why oil giant Chevron is buying Anadarko Petroleum for $33 billion – To understand why Chevron struck the biggest oil and gas deal in years to purchase Anadarko Petroleum, you should probably pull out a globe. Start in Texas, where Chevron will expand its presence in the top U.S. shale field. Then trace a line to the Gulf of Mexico, where the energy giant will grow its offshore drilling operations. Next, skip across the Atlantic to southern Africa, where Chevron will acquire a massive natural gas export project that’s currently under development.The $33 billion blockbuster acquisition – $50 billion including debt – ranks as the sixth-largest oil and gas deal on the books, according to Drillinginfo and Dealogic. It’s the largest deal since 2015, when Royal Dutch Shell bought British energy giant BG Group for $82 billion in enterprise value.Here’s why Chevron thinks Anadarko is worth the record-setting price tag. Shale drilling, or extracting oil and gas from rock formations, is fueling a boom in U.S. production. Small, independent drillers pioneered U.S. shale production, but the new rule is “the shale game is a scale game,” according to Chevron CEO Michael Wirth.Now that the industry has refined technologies such as hydraulic fracturing and horizontal drilling, the next frontier is industrializing the shale process. That’s where companies such as Chevron come in.Oil majors have the scale and financial wherewithal to essentially turn shale fields into factories. They do that by stringing together large parcels of continuous acreage, which allows them to do highly efficient pad drilling on a massive scale. Pad drilling involves drilling multiple horizontal wells from a single location.Chevron says it can produce oil and gas from a one-square-mile area from a single drilling pad. On Friday, Chevron highlighted that the Anadarko deal creates a 75-mile-wide corridor in the Delaware Basin portion of the larger Permian Basin, the biggest U.S. shale field.The 2014-2016 oil price crash sparked a land rush in the Permian, where drillers can produce crude at low breakeven costs compared with other regions. With the best land spoken for, energy companies are now turning to mergers and acquisitions to enhance their positions in the region underlying western Texas and eastern New Mexico.That’s illustrated in the Chevron-Anadarko deal, which connects a large patch of Chevron’s Permian acreage in Culberson County, Texas, with Anadarko’s holdings in neighboring Reeves and Loving counties. Wirth says Chevron plans to add more rigs, expand pad drilling and introduce his company’s digital analysis to the Anadarko-held land.
‘Big Oil’ is rapidly becoming ‘Big Shale’ — It is not often that routine corporate updates can rattle nations but that is exactly what happened this week. ExxonMobil and Chevron, the two largest US energy supermajors, both raised their guidance for the amount of oil they expect to squeeze out of the Permian Basin, the heartland of the US shale boom, over the next five years. In the process they sent a signal to Opec countries that any hopes that the shale revolution might falter are grossly misplaced. The scale of the revisions are hard to overstate, with “Big Oil” increasingly becoming “Big Shale”. Operators are bringing expertise and efficiency earned over decades in far-flung corners of the globe to an area previously dominated by wildcatters and domestically-focused US oil companies. By 2024 Exxon and Chevron now expect to be pumping almost 2m barrels a day combined from the Permian, which straddles Texas and New Mexico. That is 60 per cent more than previously forecast. The Permian as a whole will already produce about 4m b/d this year, meaning that this one region – if it were an Opec country – would be the third-largest producer in the cartel, behind only Saudi Arabia and Iraq. For Opec this spells trouble. Members, including Saudi Arabia, have consistently downplayed shale’s longevity, arguing that higher prices are still needed to foster investment in production and avoid a future supply crunch. It is a line of reasoning still favoured by many oil company chief executives too. But it looks, at best, outdated. While the shale industry has undoubtedly relied on a gusher of Wall Street money to grow, often leaving investors disappointed by its ability to generate cash, Big Oil is now leading the way not just in getting production up, but in getting costs down. Chevron says that returns on its shale investments are now “north of 30 per cent”, even with lower prices. Exxon says it could make a return of 10 per cent even if oil fell to $35 a barrel. For Opec this means the days when members could rely on $100 crude to top up government coffers look like an anomaly, rather than a mean to which the market will one day revert.
Occidental bid more than $70 a share for Anadarko and is now considering options: Sources –There was another bid for Anadarko Petroleum, the oil and gas explorer that Chevron said it was buying for $65 a share in cash and stock.Before Friday’s announcement of the deal, Occidental Petroleum had bid more than $70 a share for Anadarko in cash and stock, people familiar with the situation told CNBC, but the company ultimately decided to go with Chevron.In addition to being higher, the Occidental bid contained more cash than the Chevron offer and would have required a shareholder vote, the people said.However, the people familiar said there were some structural issues with the Occidental bid with which Anadarko may not have been as comfortable.Occidental is now considering its options, people familiar with the matter told CNBC, but it’s unclear if the company will launch a hostile bid for Anadarko. The Chevron-Anadarko breakup fee is said to be 3% of the deal price, which is nearly $1 billion. That transaction will expand the second biggest U.S. energy company’s operations in shale oil and gas production, offshore drilling and liquefied natural gas exports. The deal also would be the 11th biggest in history for an energy and power company, according to Refinitiv.
Rig count sails past one year above 1000 mark – The North American Rig Count cruised past one year above the 1,000 mark as crude oil prices continue to hover in the mid-$60 per barrel range. Exploration and production companies are now using 1,022 drilling rigs in North America, according to figures released Friday in the Baker Hughes Rig Count. Although the figures mark a decrease of three drilling rigs in operation compared to last week, they represent a year and a week above the 1,000 mark.West Texas Intermediate crude oil prices suffered a dramatic drop during the fourth quarter of 2018 but have been trading above the $60 per barrel mark for the past three weeks, allowing the rig count to remain relatively steady. Exploration and production companies removed nine rigs from operations in Pennsylvania, Oklahoma, New Mexico and West Virginia over the pas week but put six of them into service in Texas, Ohio, Kansas and the Gulf of Mexico. The Marcellus Shale of Pennsylvania and West Virginia lost six drilling rigs, which was partially offset by a gain of three rigs in the Utica Shale, which lies beneath a large area of the Marcellus.Gains to the Texas rig count were made in areas outside of the state’s four shale basins. Although the Permian Basin gained two drilling rigs, the Haynesville Shale lost two and the Eagle Ford Shale lost another. Compiled by Houston oilfield service company Baker Hughes, the weekly rig count is considered to be a barometer of exploration and production activity.
U.S. shale producers turn to jobs cuts as investor pressures mount (Reuters) – Having slashed spending plans and run out of willing buyers for assets, some U.S. shale producers are turning to workforce cuts as investors step up demands for returns. Pioneer Natural Resources Co, one of the largest producers in the Permian Basin of West Texas and New Mexico, and Laredo Petroleum Inc another Permian producer, this week disclosed plans to shed workers. Irving, Texas-based Pioneer declined to say how many of its about 3,200 employees would be cut. The company has not had a layoff since 1998. Severance packages will be offered and the company said it expects to dismiss workers by June. Pioneer has been trying to sell assets in South Texas to concentrate on the Permian for more than a year. In February, it released fourth-quarter financial results that fell short of Wall Street expectations and that same month Chief Executive Tim Dove agreed to retire. Shale firms have pushed U.S. oil output to record levels. But years of heavy spending led to investor pressure to reduce spending and use the cash to provide payouts, rather than produce more oil. Pioneer employees told a Midland, Texas, TV station that the company wanted to cut about 300 workers, or about 10 percent of its workforce. Tulsa, Oklahoma-based Laredo Petroleum said on Tuesday it cut about 20 percent of its 340 employees, which would save the firm around $30 million per year. It also replaced its finance chief. Laredo had to make the staff cuts to “focus on increasing corporate-level returns and growing within cash flow from operations,” CEO Randy A. Foutch said in a statement.
$3.7B Gas Pipeline Would Combat Permian Flaring – Tellurian Inc. reported Monday that it is holding a binding open season to secure prospective shippers for its proposed Permian Global Access Pipeline (PGAP), an approximately $3.7 billion conduit that would deliver Permian natural gas to Southwest Louisiana. The proposed 42-inch diameter interstate natural gas pipeline would originate at the Waha Hub in Pecos County, Texas, and terminate at Gillis, La., which is located north of Lake Charles – where Tellurian has proposed building its $15.2-billion Driftwood LNG export facility. Tellurian noted that the 625-mile-long pipeline would be able to transport at least 2 billion cubic feet of gas per day. The company added that construction could start as soon as 2021 and that the pipeline could begin service as early as 2023. “Permian producers have recently paid $9.00 per mmBtu (million British thermal units) to move their natural gas away from the wellhead, reflecting the acute need for infrastructure development in the basin,” Tellurian President and CEO Meg Gentle said in a written statement. “By contrast, Southwest Louisiana is a market expected to grow 300 percent in the next five years. The Permian Global Access Pipeline is critical infrastructure that will interconnect stranded Permian gas production with growing markets, reduce flaring and provide a valuable cleaner fuel to reduce urban pollution and carbon globally.” In early Dec. 2018, the energy research and business intelligence firm Rystad Energy reported that the “persistent rise” in Permian production coupled with “severe takeaway challenges” caused gas flaring to hit an estimated average of 407 million cubic feet per day (MMcfd) during the third quarter of 2018. At the time, Rystad called that figure an “all-time high” but predicted that Permian flaring would likely hit “at least 600 MMcfd” by the middle of this year – assuming a West Texas Intermediate crude oil price of $60 per barrel.
Trump Signs Two Executive Orders Giving Himself “Sole Approval” on Pipelines – During a day of fundraisers and rallies across Texas, President Donald Trump signed two executive orders intended to speed up the approval process for oil and gas projects. The orders also limit states’ ability to intervene in these projects. “My action today will cut though destructive permitting and delays,” Trump told an enthusiastic crowd at the International Union of Operating Engineers. Trump stated that he “ended the war on energy” since entering the White House. One of Trump’s executive orders is aimed at streamlining the approval process for energy infrastructure that crosses international borders. Trump said pipelines, roads, and railways along the border will take no more than 60 days to be approved or denied and that the decision will now come directly from the President himself. “The President will have sole approval, not the bureaucracy,” Trump told his supporters at the union. This order changes previous rules which gave the Secretary of State the authority to issue permits for cross-border pipelines and similar infrastructure – a process that has, in some cases, taken years. Trump blamed the delay of pipeline projects on states like Washington and New York for restrictive policies on oil and gas. “New York is hurting the country because they are not allowing the pipelines to get through,” Trump said. He also blamed “radical activists” for slowing down the completion of pipeline projects around the nation, including the Dakota Access Pipeline (DAPL). The DAPL faced heavy resistance from environmental groups, indigenous communities, and allied activists from around the world in 2016. In late March, the Trump administration approved the equally controversial and long-delayed TransCanada Keystone XL Pipeline by ignoring previous court rulings and issuing a new presidential permit for the project. Trump had approved the pipeline two years ago but the project was mired in legal challenges. While the southern portion of the project was completed years ago, construction of the portion from Alberta to Steele City, Nebraska, has been delayed. “We approved the Keystone XL pipeline, almost on day one,” Trump stated at Wednesday’s event. “We got the Dakota Access Pipeline out of a lot of trouble. They had a little problem, they didn’t have a permit but I gave it to them.” Wednesday’s executive orders are an indication that Trump wants to speed up construction of the Keystone XL.
Trump Is Rewriting the Rules to Favor the Pipeline Industry – Domestic oil and gas production is soaring, and nowdays, it’s not enough to simply pull the stuff from the ground. With the fossil fuel boom comes demand for new pipelines and refining infrastructure, putting the expanding industry on a collision course with communities across the country. Major pipeline projects are facing resistance from a public worried about accidents and climate disruption, so President Trump wants to rewrite the rules in the industry’s favor. On Wednesday, Trump announced two executive orders designed to speed up approvals for fossil fuel infrastructure and make it easier for energy firms to transport oil and gas from the nation’s booming fracking fields to domestic and international markets. One order seeks to limit the role of state governments in approving federal clean water permits, a move that environmentalists say undermines states’ ability to delay or block fossil fuel projects that threaten wetlands and waterways, as New York and Washington have done. “This executive order shows the administration’s commitment to states’ rights is hollow; once again, the administration is putting profit above all else,” said Marc Yaggi, executive director of the Waterkeeper Alliance in a statement on Wednesday. Trump announced the new executive orders in Texas, where the oil and gas industry has a long history of dominating economies, landscapes and politics. Texas lawmakers are currently considering legislation that environmentalists say is designed to intimidate environmental protesters and landowners fighting a pipeline company’s attempt to seize their property under eminent domain. Similar legislation passed last year in neighboring Louisiana, allowing police to charge water protectors with felonies for visiting pipeline construction zones in pristine swamplands. Welcome to the pipeline wars. The U.S. is simultaneously poised to dominate oil and gas production for decades to come and coming under heavy political pressure to stave off the worst impacts of climate disruption and switch to renewables. As the encroaching fossil fuel industry enriches some communities and tramples over others, new pipelines and other infrastructure projects are becoming the real-life points of conflict in the debate over the nation’s energy future.
Pipeline opponents ask judge to strike down Trump’s permit (AP) – Opponents of the long-stalled Keystone XL oil pipeline asked a federal court Friday in a lawsuit to declare President Donald Trump acted illegally when he issued a new permit for the project in a bid to get around an earlier court ruling. In November, U.S. District Judge Brian Morris ruled that the Trump administration did not fully consider potential oil spills and other impacts when it approved the pipeline in 2017. Trump’s new permit, issued last week, is intended to circumvent that ruling and kick-start the proposal to ship crude oil from the tar sands of western Canada to U.S. refineries. White House officials have said the presidential permit is immune from court review. But legal experts say that’s an open question, and the case could further test the limits of Trump’s use of presidential power to get his way. Unlike previous orders from Trump involving immigration and other matters, his action on Keystone XL came after a court already had weighed in and blocked the administration’s plans. “This is somewhat dumbfounding, the idea that a president would claim he can just say, ‘Never mind, I unilaterally call a do-over,’” said William Buzbee, a constitutional scholar and professor at Georgetown University Law Center. The pipeline proposed by Calgary-based TransCanada has become a flashpoint in the debate over fossil fuel use and climate change. Opponents say burning crude from the tar sands of Western Canada would make climate change worse. The $8 billion project’s supporters say it would create thousands of jobs and could be operated safely. The line would carry up to 830,000 barrels (35 million gallons) of crude daily along a 1,184-mile (1,900-kilometer) path from Canada to Nebraska. Stephan Volker, an attorney for the environmental groups that filed Friday’s lawsuit, said Trump was trying to “evade the rule of law” with the new permit. “We have confidence that the federal courts_long the protectors of our civil liberties_will once again rise to the challenge and enforce the Constitution and the laws of this land,” Volker said.
Colorado lets oil and gas companies pollute for 90 days without federally required permits that limit emissions – Colorado public health officials have let oil and gas companies begin drilling and fracking for fossil fuels at nearly 200 industrial sites across the state without first obtaining federally required permits that limit how much toxic pollution they can spew into the air.Air pollution control officials at the Colorado Department of Public Health and Environment allow the industry to emit hundreds of tons of volatile organic chemicals, cancer-causing benzene and other pollutants using an exemption tucked into the state’s voluminous rules for the industry – rules that former Gov. John Hickenlooper, state leaders and industry officials long have hailed as the toughest in the nation. Overall, companies are polluting without permits at 193 sites in Colorado, mostly concentrated in Weld County, according to a document reviewed by The Denver Post and information state health officials provided in response to Post queries. Industry officials say they run their facilities to meet state health standards whether they are operating within the 90-day exemption period or have obtained permits – but need the flexibility to determine how much a site will pollute before limits are set.
Oil and Gas Emissions, Health Research Suggests Pollution Standards Are Inadequate – A paper published this month suggests recent air quality study models and pollution level recommendations are inadequate to gather appropriate data to inform policy or explain unhealthy symptoms in people living near active oil and gas development. The paper in the Annual Review of Public Health was written by California and New York researchers and included analysis of 37 peer-reviewed journal articles on oil and gas emissions published between 2012 and February 2018, several of which studied extraction site data measured on Colorado’s Front Range. Data observed in seven other states and Poland also was reviewed. Because recommended safe limits for individual air pollutants are usually set by accounting for health risks caused by exposure to just one substance at a time, standards might need to become more stringent to protect people against impacts that are possibly worsened and expedited by contact with and ingestion of multiple substances simultaneously and over time, which is possible near drilling, the paper states. “We don’t have much research on what happens when you’re exposed to a cocktail of pollutants,” said Diane Garcia-Gonzales, an author of the paper. “I think using the methods that we’ve used in the past to understand impact, which is basing ambient air quality concentrations of a single pollutant and comparing it to a health-based standard, would be inadequate and misleading to describe health effects potentially associated with extraction,” she said. The paper also concluded that hazardous air pollutants – for which there are no regulatory standards, but only recommended thresholds to avoid exposure to – are associated at possibly dangerous levels with the production phase of oil and gas development, and not just the fracking stage, as commonly thought. “Hydraulic fracturing has received the greatest attention for its potential impact to human and environmental health,” the paper stated. “In the context of hazardous air pollutants, however, we did not find evidence to support the common assumption that the discrete hydraulic fracturing phase itself is associated with the highest risk of exposure.” Instead, the paper said, the production phase of oil and gas, or the actual harvesting of underground minerals, involves the largest number of air pollutants that could be emitted and has the potential to spew the highest concentrations and most varied mixtures of pollutants over the longest time period – wells can remain productive for years. Even the storage phase for energy mined and wastewater once used to access it has a chance of exposing people to harmful contaminants, the paper stated.
A Former Oil Lobbyist Is Now Officially in Charge of America’s Public Lands – The Senate voted to confirm former oil-and-gas lobbyist David Bernhardt as Secretary of the Interior Thursday, despite calls from Democrats and government watchdogs to investigate his past conduct, The New York Times reported. The confirmation vote was 56-to-41, making Bernhardt – who has so many conflicts of interests he has to write them on an index card to make sure he doesn’t deal with former clients – the least popular Interior Secretary in 40 years, the Center for American Progress (CAP) told The Washington Post. The second least popular was Ryan Zinke, President Donald Trump‘s first pick to lead the Department of Interior (DOI), whoresigned last year amidst a series of ethics investigations. A CAP analysis showed that Bernhardt bested his former boss in another respect: he has the most conflicts of interests of all 31 Trump cabinet-level nominees.”It still amazes me,” New York Democratic Senator Chuck Schumer said of Bernhardt’s nomination, as The New York Times reported. “Donald Trump campaigns on cleaning up the swamp and he does exactly the opposite when in office. An oil and gas lobbyist as head of the Department of Interior? My God. That’s an example of the swampiness of Washington if there ever was one. And when are Donald Trump’s supporters going to understand this?” Bernhardt worked for the DOI under President George W. Bush, contributing to efforts to open the Arctic National Wildlife Refuge to oil and gas development. He then spent seven years as a lobbyist with severalfossil fuel clients including Halliburton; another of his clients was the powerful California utility Westlands Water District. Trump nominated him to serve as deputy secretary at DOI in April 2017, he was confirmed in July of that year and he has been acting as interior secretary since Zinke’s resignation in December of 2018.
House Democrats Voted for a Natural Gas Future, and Nobody Noticed – Last week, a video went viral of Rep. Alexandria Ocasio-Cortez (D-NY) offering up an impassioned rebuke to Senate Republicans for bringing her Green New Deal to a premature vote the day before. Something that got less attention, however, was the vote the environmental champion and the vast majority of her Democratic colleagues cast two days earlier. Ocasio-Cortez had been one of 224 House Democrats to back a bill that, if passed, would allocate roughly $580 million in federal funding over two years to public and private energy development projects in Europe and Eurasia, including natural gas infrastructure. Disguised as a measure to crack Russia’s energy dominance in Europe and Eurasia, it passed the House easily on March 25 with a margin of 391-to-24 and no Democratic opposition – though 10 Democrats did not vote, including six members of the Congressional Progressive Caucus. The bill’s true intention, however, seems to be opening up new energy markets to American fossil fuel companies, enabling the easy export of liquid natural gas. In fact, it practically said so in its statement of policy. […] In service of this aim, the bill resolved to provide “diplomatic and political support to the European Commission and such countries, as necessary to – A, facilitate international negotiations concerning cross-border infrastructure; B, enhance Europe’s and Eurasia’s regulatory environment with respect to energy; and C, develop accessible, transparent, and competitive energy markets supplied by diverse sources, types, and routes of energy.” In addition to U.S. political backing, the bill pledged “early-stage project support and late-stage project support for the construction or improvement of energy infrastructure” which included “natural gas infrastructure, such as interconnectors, storage facilities, liquefied natural gas import facilities, or reverse flow capacity.”
2019 Oil and Gas Exploration Off to Flying Start – Oil and gas exploration is off to a flying start in 2019, according to independent energy research and business intelligence company Rystad Energy. Global discoveries of conventional resources in the first quarter reached 3.2 billion barrels of oil equivalent (boe), Rystad revealed Monday in a statement sent to Rigzone. Most of the gains were recorded in February, which saw 2.2 billion barrels of discovered resources, Rystad highlighted. Majors reported more than 2.4 billion boe of the discovered resources for the quarter, Rystad outlined in the statement. ExxonMobil was the most successful, with three offshore discoveries accounting for 38 percent of total discovered volumes. “If the rest of 2019 continues at a similar pace, this year will be on track to exceed last year’s discovered resources by 30 percent,” Rystad Upstream Analyst Taiyab Zain Shariff said in the company statement. The total volume of global conventional discoveries in 2018 was 9.1 billion boe, according to Rystad. Total global conventional discoveries were 10.3 billion boe in 2017 and 8.4 billion boe in 2016. No Signs of Slowing DownIn the statement, Rystad said the push for “substantial” new discoveries shows no signs of slowing down, with another 35 “high impact” exploration wells expected to be drilled this year, both onshore and offshore. Rystad highlighted that three such wells are already underway; the Shell-operated Peroba well off Brazil – with pre-drill prospective resource estimates of 5.3 billion boe, Eni’s Kekra well in Pakistani waters -with pre-drill prospective resource estimates of 1.5 billion boe and the Total-operated Etzil well off Mexico -with pre-drill prospective resource estimates of 2.7 billion boe. “If these wells prove successful, 2019’s interim discovered resources will be the largest since the downturn in 2014,” Shariff stated.
Alberta, Canada’s tar sands is the world’s most destructive oil operation – and it’s growing — AS THE WORLD’S largest industrial project, the scale of Alberta’s tar sands operations is hard to grasp. Imagine driving on a highway and to either side behind a thin screen of trees is a vast industrial landscape as far as the eye can see. Now imagine 500 miles of that highway. If Alberta, with its population of four million people, was a country it would be the fifth largest oil producing nation. While it produces conventional oil, most comes from the Alberta oil sands, the world’s third largest proven oil reserve at 170 billion barrels.The local and national Canadian governments are pushing to expand oil extraction operations in the vast tar sands region, which already has a footprint roughly the size of England, even as they promote action on climate change on the world stage. And although the relationships between local people and the extraction operations are complex, involving jobs and services, a growing chorus of environmentalists and indigenous people are speaking out against pollution and degradation in the oil sands. Many are digging in for a fight against proposed expansions, including a major pipeline project. Against the brewing fight in the oil sands region, Canada pushed for the 2.7 degrees Fahrenheit (1.5 degrees Celsius) global warming target at the Paris climate summit in 2015 – but when protestors blocked construction of the Trans Mountain oil pipeline in 2018, the Justin Trudeau government bought the pipeline from its Texas owners. Canada’s national carbon tax to cut its global warming emissions went into effect April 1, 2019. And yet the country spent U.S. $3.4 billion (C $4.5 billion) last year to buy the only oil pipeline from Canada’s west coast to the Alberta oil sands to ensure future growth of its oil exports, and allow expansion of operations in the oil sands. Texas-based Kinder Morgan, owners of the 65-year-old Trans Mountain oil pipeline, had been building a much larger pipeline along the same 715-mile (1,150-kilometer) route along the banks of numerous major rivers and through world-renowned Jasper National Park, but were bitterly opposed by indigenous and environmental groups. Frustrated by lawsuits and protests Kinder Morgan announced last April they were abandoning the project. The Trudeau government stepped in knowing it will cost billions more to complete the project.
Oil pipeline explodes in Leon, Mexico after thieves try to steal fuel – An oil pipeline has exploded in the Mexican city of Leon in the aftermath of a botched attempt to steal fuel by one of the country’s notorious drug cartels. Flames reaching as high as sixteen feet were the only lights some residents of the central Mexican city could see on Saturday night as the explosion caused mass blackouts. The explosion occurred after a group of ‘huachicoleros’ – cartel bandits who steal petrol and adulterated alcohol – were trying to pilfer oil from the pipeline when they accidentally caused the explosion. Fifteen foot flames were seen in Leon, Mexico after criminals caused an explosion while trying to tap into an oil pipeline The Mexican Army was called in to the town to guard the perimeter and keep watch over the fire. No one was injured in the incident The country’s army was called in to keep watch over the blaze to ensure the safety of Leon’s residents. Firefighters eventually got the blaze under control without any recorded injuries. The pipeline in question belongs to the state-owned oil firm Pemex, which is one of the world’s largest petroleum companies. Theft from oil pipelines has become a large industry in Mecixo for the country’s notorious cartels. Gangs of ‘huachicoleros’ scale the country, drilling into unguarded pipelines to steal thousands of litres of oil at a time. Oil theft is a large trade for the country’s notorious drug cartels. The practice saps more than £1 billion worth of state revenue annually With Pemex’s status as Mexico’s largest oil company, the practice has become a drain on the nation’s public finances. It has been reported that the cartel’s activities deprive the state of more than £1 billion in revenue every year.
Another Pemex Pipeline Explosion, This Time in Guanajuato –Another Pemex pipeline exploded in the Mexican causing a major fire and explosions, according to local media. A section of pipeline of the Petroleos Mexicanos (Pemex) state company exploded late Saturday night in Guanajuato state, inciting a major fire that reach 15 meters into the air, torching a vehicle parked nearby. No fatalities or injuries have been reported, says El Universal newspaper. According to the media outlet the area that exploded, near the capital city of Leon, was being illegally tapped for fuel. The Leon city fire department says it has activated “a series of actions to mitigate the magnitude of its effects and avoid a tragedy,” including blocking off the exploded pipeline area that runs through La Providencia community. The intensity of the flames has decreased. @BomberosdeLeon is cooling down the explosion so that @Pemex security can enter the area. @Proteccion_leon, @vialidad_leon and police are maintaining the area blocked off. A Jan. 18 oil pipeline explosion in the state of Hidalgo left as many as 135 people dead from the initial combustion and subsequent burn wounds.On the day of the tragedy, people gathered around a leaking pipeline in Tlahuelilpan at about 5 pm with bottles and containers to collect the fuel for use and sale amid national gasoline shortages meant to combat fuel stealing in the first place. On Dec. 27 President Andres Manuel Lopez Obrador (AMLO) launched a crackdown on fuel theft ordering the temporary closedown of certain pipelines, including the one in Tlahuelilpan, to prevent the illegal oil taps that have cost the heavily-indebted and corrupted Pemex US$3.4 billion in losses in 2018 alone.
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