Oil, Gas, And Fracking News Reads: 01December 2019 – Part 1

Written by rjs, MarketWatch 666

Here are some selected news articles from the week ended 30 November 2019.

This article is a feature every Monday evening on GEI.

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Natural gas prices for January at an all time low; natural gas and oil production both at all time highs

Oil prices fell for the first time in four weeks as a report that the Saudis would pressure other OPEC members to carry their own weight at next week’s OPEC meeting precipitated a 5% drop on Friday…after closing little changed last week at $57.77 a barrel on conflicting stories on US-China trade, oil inventories, and OPEC, the price of light sweet domestic oil for January delivery started this week higher on new optimism that the US and China would soon sign a deal to end their trade war, and finished Monday up 24 cents at $58.01 a barrel…hopes of progress towards a trade agreement and hopes for an OPEC+ production cut extension pushed prices another 40 cents higher to $58.41 a barrel on Tuesday, even as prices backed backed off before reaching last Thursday’s two month high…oil prices then slumped after the American Petroleum Institute (API) reported a crude oil inventory increase much greater than was expected, but came back near the close on Wednesday to end down 30 cents at $58.11 a barrel, as losses were limited by optimism that a U.S.-China trade deal would soon be reached…US oil again traded lower on Thursday in Asia, reacting to the EIA report that oil crude inventories unexpectedly rose last week and ended down 33 cents, or 0.6%, to $57.78 a barrel in overseas trading after Trump signed into law a bipartisan bill backing protesters in Hong Kong, fueling new tensions with China…oil prices then fell sharply in US markets on Friday on rising US-China tensions over Hong Kong and on the resignation of the Iraqi Prime Minister, which traders believed would help quell weeks of unrest in Iraq, and went on to finish $2.94 or 5.1% lower at $55.17 a barrel following reports the Saudis would no longer compensate for excessive production by other OPEC members, and on comments by the Russian Energy Minister that he would prefer if OPEC and other producers delayed the decision on whether to extend their production cuts till April…oil prices thus ended the week 4.5% lower than the prior week’s close, but still managed to log an increase of 2.3% for November, their largest monthly gain since June…

Meanwhile, natural gas prices fell nearly 16% to an all time low as warmer weather and record high gas production sent prices tumbling…after recovering to lose less than 1% last week at $2.665 per mmBTU, the contract price of natural gas for December delivery fell 13.4 cents on Monday and 6.1 cents on Tuesday, as weekend natural gas production was at a record high while weather models changed from indicating much below normal temperatures over the entire country to just a modest cooling in the East…with trading in the December contract rolling off the boards at $2.470 per mmBTU on Tuesday, the contract price of natural gas for January delivery, which had ended the prior week at $2.710 per mmBTU, fell another 3.2 cents to $2.501 per mmBTU on Wednesday, and then fell 22 cents to an all time low of $2.281 per mmBTU on Friday as the outlook for the second week of December turned warmer, with temperatures expected to be above normal across most of the contiguous U.S.

with natural gas prices for delivery in January thus closing at an all time low, we’ll bring up a few price graphs to see what they look like, and what the implications of that record low price might be….the first graph we have here shows the daily price of the January 2020 natural gas contract over the past 6 months…

The graph above is a screenshot of the interactive daily price of the January natural gas contract at Barchart.com, “the leading provider of real-time or delayed intraday stock and commodities charts and quotes”, and it shows the range of prices, in dollars per mmBTU, for that January natural gas contract as a vertical bar for each day over the past 6 months…you might note that each bar has two small horizontal appendages: the one on the left is the opening price for that day, while the appendage on the right is the day’s closing price…what we can see here is that up until Friday of this week, this contract had seldom sold for less than $2.50 per mmBTU, and then on Friday it crashed 22 cents to $2.281 per mmBTU, 20 cents lower than it had ever been priced for previously…we should make clear that this graph shows the price of the January contract, which is historically the most expensive, and that mid-summer gas contract prices we have quoted earlier this year were often lower priced…

To extend that price picture out a bit, we’ll also include a graph of weekly price of the January natural gas contract over the past year…the format is the same as the graph above, but in this case each bar represents the price range of the January 2020 contract over each of the past 52 weeks…again, the magnitude of this week’s price drop compared to other weekly changes stands out..

Lastly, to give us a long term historical view, we’ll include a version of that graph that shows the price range of the January 2020 natural gas contract for each quarter over the past 11 years…:hence, the entirety of what we saw on the daily graph is represented by just the two rightmost bars on this graph, which should give you a good sense of how long natural gas prices have been falling, and how far they have fallen….again, remember this is the graph for the January 2020 futures contract; daily spot prices and the widely quoted front month contract price have been much more volatile over time than the price that a commodity such as natural gas would trade for on a contract that references delivery 5 or 10 years from the date that it’s being traded…ie, while futures prices were toying with $9 per mmBTU ten years ago, the then current contract prices topped $12..

These prices represent what a natural gas exploitation company could have locked in to sell their gas in January 2020 at any time over the past 11 years, or the price that a utility could have locked in their purchase of gas over the same period, although in practice, producers and users of gas seldom lock in contract prices that far out…there are similar futures contracts for each month of each year going out at least 5 years (ie, here’s natural gas contract prices for February 2024) and then for the beginning month of each quarter going out at least 20 years…while this isn’t the lowest price a natural gas contract has traded for, it is the lowest that natural gas contracted for January has ever been priced at…and since futures contract prices farther out generally moved in tandem; ie, natural gas contracted for July 2020 delivery, for instance, fell 11.1 cents on Friday to $2.250 per mmBTU, this week’s price move suggests that anyone planning to drill this summer will have a hard time securing a price that will enable profitability..

The natural gas storage report for the week ending November 22nd from the EIA indicated that the quantity of natural gas held in storage in the US decreased by 28 billion cubic feet to 3,610 billion cubic feet by the end of the week, which left our gas supplies 548 billion cubic feet, or 17.9% higher than the 3,062 billion cubic feet that were in storage on November 22nd of last year, but still left our supplies 31 billion cubic feet, or 0.9% below the five-year average of 3,641 billion cubic feet of natural gas that have been in storage as of the 22nd of November in recent years….the 28 billion cubic feet that were withdrawn from US natural gas storage this week was 3 billion cubic feet more than the average forecast of a 25 billion cubic feet withdrawal by analysts surveyed by S&P Global Platts, but was quite a bit less than the average 57 billion cubic feet of natural gas that have been pulled from natural gas storage during the third week of November over the past 5 years, which thus suggests that my theory that we may have entered a new normal where both injections and withdrawals would be greater than their previous norms was only a one week wonder…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending November 22nd showed that because of increases in our oil imports and oil production, as well as another large draw from the Strategic Petroleum Reserve, we again managed to have a small surplus of oil available to be added to our stored commercial supplies for the tenth time in the past eleven weeks…our imports of crude oil rose by an average of 217,000 barrels per day to an average of 6,190,000 barrels per day, after rising by an average of 222,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 453,000 barrels per day to an average of 3,480,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,710,000 barrels of per day during the week ending November 22nd, 236,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was reported to be 100,000 barrels per day higher at a record 12,900,000 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 15,610,000 barrels per day during this reporting week..

US oil refineries were reportedly processing 16,334,000 barrels of crude per day during the week ending November 22nd, 101,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that a net average of 29,000 barrels of oil per day were being added to the supplies of oil stored in the US….hence, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 753,000 barrels per day less than what was added to storage plus what our oil refineries reported they used during the week….to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA inserted a (+753,000) 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 they label in their footnotes as “unaccounted for crude oil”….with that much oil unaccounted for again this week, it means that one or all of the oil metrics that the EIA has reported and that we have just transcribed must necessarily be seriously off the mark…however, since the media treats these figures as gospel and since they drive oil pricing and hence decisions to drill for oil, we continue to report them just as they’re seen & believed by everyone else, since commonly held illusions always top reality (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 5,997,000 barrels per day last week, now 21.9% less than the 7,677,000 barrel per day average that we were importing over the same four-week period last year….the 29,000 barrel per day net addition our total crude inventories included a 224,000 barrel per day addition to our commercially available stocks of crude oil, which was mostly offset by a withdrawal of 195,000 barrels per day from our Strategic Petroleum Reserve…this week’s crude oil production was reported to be 100,000 barrels per day higher at a record 12,900,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at a record 12,400,000 barrels per day, while a 7,000 barrel per day increase to 488,000 barrels per day in Alaska’s oil production was not large enough to impact the final rounded total…last year’s US crude oil production for the week ending November 23rd was rounded to 11,700,000 barrels per day, so this reporting week’s rounded oil production figure was 10.3% above that of a year ago, and 53.1% 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 89.3% of their capacity in using 16,334,000 barrels of crude per day during the week ending November 22nd, down from 89.5% of capacity the prior week, and below normal for the third week of November…as a result, the 16,334,000 barrels per day of oil that were refined this week was 6.9% below the 16,855,000 barrels of crude per day that were being processed during the week ending November 23rd, 2018, when US refineries were operating at 95.6% of capacity….

Even with a modest decrease in the amount of oil being refined, gasoline output from our refineries was a bit higher, increasing by 12,000 barrels per day to 10,065,000 barrels per day during the week ending November 22nd, after our refineries’ gasoline output had decreased by 120,000 barrels per day the prior week….but even with this week’s increase in gasoline output, our gasoline production was still 1.0% lower than the 10,186,000 barrels of gasoline that were being produced daily over the same week of last year….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) fell by 49,000 barrels per day to 5,075,000 barrels per day, after our distillates output had increased by 85,000 barrels per day over the prior week…after this week’s decrease in distillates output, our distillates’ production for the week was 7.2% below the 5,471,000 barrels of distillates per day that were being produced during the week ending November 23rd, 2018….

With the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 3rd time in nine weeks and for the 9th time in 23 weeks, rising by 5,132,000 barrels to 225,978,000 barrels during the week to November 22nd, after our gasoline supplies had increased by 1,756,000 barrels over the prior week….our gasoline supplies increased by more this week because our imports of gasoline rose by 258,000 barrels per day to 773,000 barrels per day while our exports of gasoline rose by 46,000 barrels per day to 935,000 barrels per day, and while the amount of gasoline supplied to US markets increased by 12,000 barrels per day to 9,204,000 barrels per day….after this week’s increase, our gasoline supplies were 0.6% higher than last November 23rd’s inventory level of 224,551,000 barrels, and rose to roughly 4% above the five year average of our gasoline supplies for this time of the year…

However, even with the decrease in our distillates production, our supplies of distillate fuels rose for the 1st time in 10 weeks and for 11th time in the past 35 weeks, increasing by 725,000 barrels to 116,406,000 barrels during the week ending November 22nd, after our distillates supplies had decreased by 974,000 barrels over the prior week…our distillates supplies rose this week because our exports of distillates fell by 439,000 barrels per day to 816,000 barrels per day while our imports of distillates fell by 77,000 barrels per day to 238,000 barrels per day, and while the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 70,000 barrels per day to 4,393,000 barrels per day….but even after this week’s inventory increase, our distillate supplies were still 4.4% lower than the 121,801,000 barrels of distillates that we had stored on November 23rd, 2018, and fell to around 12% below the five year average of distillates stocks for this time of the year…

Finally, despite this week’s increase in oil exports, the oil we pulled out of the SPR meant our commercial supplies of crude oil in storage rose for the twelfth time in twenty-four weeks and for the twenty-seventh time in 44 weeks, increasing by 1,379,000 barrels, from 450,380,000 barrels on November 15th to 451,952,000 barrels on November 22nd…after that increase, our crude oil inventories were roughly 3% above the five-year average of crude oil supplies for this time of year, and almost 35% higher than the prior 5 year (2009 – 2013) average of crude oil stocks after three weeks of November, 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 generally been rising over this year up until July, after generally falling until then through most of the prior year and a half, our oil supplies as of November 22nd were still 0.3% above the 450,485,000 barrels of oil we had stored on November 23rd of 2018, but at the same time were 0.4% below the 453,713,000 barrels of oil that we had in storage on November 24th of 2017, and 7.4% below the 488,145,000 barrels of oil we had in commercial storage on November 25th of 2016…

This Week’s Rig Count

The US rig count fell for the 14th time in 15 weeks and for the 37th time in 41 weeks over the week ending November 29th, and is now down by 26% since the end of last year….Baker Hughes reported that the total count of rotary rigs running in the US fell by 1 rig to a 32 month low of 802 rigs this past week, which was also down by 274 rigs from the 1076 rigs that were in use as of the November 30th report of 2018, and 1127 fewer rigs than the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market…

The number of rigs drilling for oil decreased by 3 to a 31 month low of 668 oil rigs this week, which was also 219 fewer oil rigs than were running a year ago, and 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 increased by 2 rigs to 131 natural gas rigs, which was still down by 58 rigs from the 189 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition to those drilling for oil & gas, three rigs classified as ‘miscellaneous’ continued to drill this week; one on the big island of Hawaii, one in Washoe County, Nevada, and one in Lake County, California, in contrast to a year ago, when there were no such “miscellaneous” rigs deployed..

Offshore drilling activity in the Gulf of Mexico was unchanged at 22 rigs this week, with all 22 of those drilling offshore from Louisiana…but that’s down by one from the Gulf of Mexico rig count of 23 a year ago, when 22 rigs were drilling in Louisiana waters and one was drilling offshore from Texas…since there are no rigs deployed off US shores elsewhere, nor were there a year ago, the Gulf of Mexico count for both years is equal to the national total in each case..

The count of active horizontal drilling rigs was up by 2 rigs to 701 horizontal rigs this week, which was still 233 fewer horizontal rigs than the 934 horizontal rigs that were in use in the US on November 30th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014…..on the other hand, the vertical rig count was down by 2 to 48 vertical rigs this week, and those were down by 26 from the 74 vertical rigs that were operating during the same week of last year…at the same time, the directional rig count was down by 1 to 53 directional rigs this week, and those were down by 15 from the 68 directional rigs that were in use on November 30th of 2018…

Details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of November 29th, the second column shows the change in the number of working rigs between last week’s count (November 22nd) and this week’s (November 29th) count, the third column shows last week’s November 22nd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 30th of November, 2018…

Even though the Permian basin shows no change this week, there was a rig added in Texas Oil District 8, or the core Permian Delaware, while at the same time, a rig was shut down in Texas Oil District 8A, or the northern Permian Midland…since there are no other changes in Texas oil districts that could possibly indicate another Permian change, it’s apparent that the rig that was pulled out of New Mexico was operating in an “other” basin in the state, such as the fairly active San Juan Basin in the northwest corner of the state…the two rigs that were pulled out of north-central Texas’s Barnett shale were both oil rigs; the two that remain are drilling for natural gas…in addition, an oil rig was pulled out of the Denver-Julesburg NIobrara chalk in Colorado, while the oil rig pulled out of the Mississippian shale came out of Oklahoma, since there haven’t been any Mississippian rigs operating in Kansas for quite a while…meanwhile, the increase of 2 rigs targeting natural gas included one added in the Eagle Ford of southeast Texas, which now has 6 natural gas rigs, as an oil rig in that basin was shut down at the same time, and the rig that was added in Texas Oil District 8, or the core Permian Delaware, which is the first natural gas drilling in the Permian since early August 2018….we should also note that a rig started drilling in Nebraska this week, in the first Nebraska activity since April….all 4 Nebraska rig startups since mid-2016 have only lasted a week each time, which is quite unusual…

ODNR Awards 9 Permits for Utica Drilling – Nine permits for drilling in the Utica-Point Pleasant shale play were awarded by the Ohio Department of Natural Resources for the week ended Nov. 23.Seven of those permits were awarded to Ascent Resources Utica LLC. Four were for wells in Noble County’s Marion Township while three were in Wheeling Township in Belmont County. Two permits were also granted to Gulfport Appalachia LLC for wells in Pultney Township in Belmont County. No permits were granted in Mahoning, Trumbull or Columbiana counties. Nor were any permits awarded in Lawrence or Mercer counties in Pennsylvania, according to the state’s Department of Environmental Protection. Through Nov. 23, ODNR had issued 3,206 permits for horizontal drilling the Utica-Point Pleasant shale play, with 2,734 wells drilled. There are 2,366 producing wells in the state.

Oil production increases 9.5% in Ohio’s Utica Shale – Oil production in Ohio’s Utica Shale increased by 9.5% in the second quarter 2019, according to new data released on Tuesday by the Ohio Department of Natural Resources.Oil production jumped from 4,488,104 barrels in 2Q 2018 to 5,813,755 barrels in 2Q 2019, Kallanish Energy reports.Oil production in 1Q 2019 was 5,073,536 barrels. Ohio also reported that natural gas production increased by 0.8% from 2Q 2018 to 2Q 2019.Gas production went from 554,306,916,000 cubic feet in 2Q 2018 to 614,218,362,000 cubic feet in 2Q 2019.Gas production was 609,452,000,000 cubic feet in 1Q 2019. The quarterly Ohio report lists 2,365 horizontal shale wells, of which 2,317 reported oil or gas production during the quarter.The average well produced 2,509 barrels of oil and 265,092,000 cubic feet of natural gas. The typical well was also in production for 86 days during the quarter.Condensate and natural gas liquids are included in Ohio’s oil and natural gas totals and are not listed separately. The results are available at https://oilandgas.ohiodnr.gov/production.

Ohio oil and gas numbers released – The Ohio Oil and Gas Association released information on the ad valorem property tax operators’ pay on Monday. Much of the money goes to schools — and it also supports levies. From 2010 through 2017, local Ohio counties have received close to $142 million. Harrison County raked in $40.8 million, Belmont County $16.8 million and Jefferson County $2.1 million. “Since most of this goes to schools, we’re having the opportunity to invest in that next generation and leaving that legacy of an improved economy an improved environment here in southeast Ohio,” said Mike Chadsey of the Ohio Oil and Gas Association. Jefferson County Auditor E.J. Conn said while some counties have seen a decrease in tax revenue from oil and gas, Jefferson County is still on an upswing, partly because the county was initially behind in development and had to wait for pipelines to be constructed. He also noted changes to tax laws have made the process of collecting the money more efficient, and fair in the way the funds are dispersed to communities. “I think the future looks positive,” Conn said. “I do know if it wasn’t for oil and gas in Jefferson County, we would be hurting for tax revenue right now because we’ve seen decreases in other areas in other industries. Public utilities, electric coal-fired power plants, they’ve been devalued so there’s a number of areas that are decreasing, so we’re lucky to have this resource.”

Shale investment hits $78 billion – The shale industry has invested $78 billion in Ohio since 2011, according to a study by Cleveland State University. Researchers at CSU’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs prepared the study for JobsOhio, the state’s privatized economic development corporation.The study looked at upstream, midstream and downstream investments through 2018. Ohio is part of the Utica and Marcellus shale regions.According to the study, during the second half of 2018 the industry invested:

• • $3.5 billion in the upstream sector, including royalties, drilling and lease payments. Belmont, Monroe and Carroll counties were the most active.
• • $232 million in the midstream sector, including natural gas gathering systems.
• • $48 million in the downstream sector, including two electric power plants that burn natural gas.

JobsOhio is looking to bring more downstream investment, such as petrochemical plants, to the state, according to a news release.

Changes could come on fracking on public land – Ohio Oil and Gas Leasing Commission members plan to recommend changes to state law governing fracking on public land and the size and operations of the commission.The commission meeting held Wednesday morning at the Ohio Department of Natural Resources offices was the group’s first since Gov. Mike DeWine took office. Changes, proposed by ODNR staff, were presented to the five-member commission, which is chaired by Mike Angle, chief of Ohio Department of Natural Resources’ Division of Geological Survey, and includes two members representing oil and gas interests, attorneys Matt W. Warnock and Michael W. Wise; one member representing the environment, Richard Shank, former director of the Ohio Environmental Protection Agency and now board president of the Ohio Environmental Council; and a public representative, Steve Buehrer, former state Bureau of Workers’ Compensation CEO.Buehrer was absent Wednesday. “I think we see these ideas … as the initiation of a much larger conversation,” said Brittney Colvin, a deputy director at ODNR who oversees three divisions, including Oil and Gas Resources Management. “That conversation that takes place between us and the commission, but also I believe with a lot of other stakeholders, whether that be the members of the General Assembly, or certainly important stakeholders that have various vested interest in development.” Some of the proposed changes include:

• ‒ Adding members to the commission, which could include other representations such as universities or recreational interests.
• ‒ Ensuring there are no conflicts of interest involving commission members when it comes to mineral rights.
• ‒ Clarifying language to allow state agencies to make lease stipulations.
• ‒ Revising state law to allow agencies to use revenues where they see fit.
• ‒ Requiring nominating groups for leasing land for fracking to conduct necessary title work rather than ODNR.

Duke Energy receives approvals – The Ohio Power Siting Board (OPSB) has approved a route for a new natural gas pipeline for the southwest region of Ohio, US. The decision to secure a better energy future for residents and businesses through the natural gas deliver comes after a review of Duke Energy’s application and public hearings about the approximately 22.5 km Central Corridor pipeline. In the ruling, the OPSB said the best route for the pipeline is the proposed western route running through Sharonville, Sycamore Township, Blue Ash, Evendale, Reading, Amberley Village and Golf Manor in Ohio. The pipeline will serve customers in southwest Ohio and connect an existing Duke Energy Ohio pipeline near the intersection of Butler, Warren and Hamilton counties with an existing company pipeline in the Norwood area. The demand for the project had been demonstrated through aged and outdated propane-air facilities that are in need of retirement, as well as being able to create a supply balance between north and south systems. Duke Energy Ohio and Kentucky President Amy Spiller said the company looks forward to working on the pipeline route while keeping the community informed. “The OPSB’s certificate to construct this critical infrastructure is an important milestone for the Central Corridor Pipeline, and we thank the board for its thorough review of this project,” said Ms Spiller. The pipeline construction is expected to begin at the end of next year and will take three to six weeks on each parcel the pipeline crosses.

Korean consortium finalizes purchase of 50% stake in Utopia Pipeline from Riverstone – A South Korean consortium of EIP Investment Co., Shinhan Investment Corp. KIAMCO, and energy firm Samtan Co. has closed the deal to take up a 50 percent ownership interest in the Utopia shale gas pipeline spanning from the United States to Canada from Riverstone Holdings, EIP Investment announced Monday. The recently-completed 268-mile pipeline delivers ethane sourced from the Marcellus and Utica shales in Ohio to the Samica petrochemical market in Ontario in Canada. It will be able to funnel 40,000 barrels of ethane per day by 2038, almost half of the total 86,000 barrels of ethane transported from the U.S. to Canada every day. The ownership acquisition would deliver stable profits to the investors for almost two decades. Riverstone formed a joint venture with Kinder Morgan to build the pipeline in 2016. Kinder would maintain its stake. The consortium also expects additional profits from the deal as Nova Chemicals, a plastics and chemical company based in Calgary that is a major importer of ethane from the U.S., plans to expand its manufacturing plant with an investment of $2 billion in 2021, EIP Investment said. Financial value of the deal has not been disclosed, but market watchers estimated the price at $500 million to $600 million. The Korean consortium was named the preferred bidder for the stake sale in September after beating 10 or more institutional investors from North America.

Public Employees Retirement System of Ohio Grows Stake in Chevron Co. –Public Employees Retirement System of Ohio lifted its stake in shares of Chevron Co. (NYSE:CVX) by 0.4% in the third quarter, Holdings Channel reports. The firm owned 1,225,830 shares of the oil and gas company’s stock after buying an additional 4,604 shares during the period. Chevron accounts for about 0.8% of Public Employees Retirement System of Ohio’s investment portfolio, making the stock its 21st largest position. Public Employees Retirement System of Ohio’s holdings in Chevron were worth $145,383,000 as of its most recent SEC filing. Several other hedge funds also recently added to or reduced their stakes in CVX. Nuveen Asset Management LLC increased its stake in shares of Chevron by 3.6% during the second quarter. Nuveen Asset Management LLC now owns 14,886,232 shares of the oil and gas company’s stock worth $1,852,443,000 after purchasing an additional 14,201,379 shares in the last quarter. BlackRock Inc. grew its stake in Chevron by 3.5% during the 2nd quarter. BlackRock Inc. now owns 131,522,440 shares of the oil and gas company’s stock valued at $16,366,651,000 after acquiring an additional 4,401,622 shares in the last quarter. APG Asset Management N.V. grew its stake in Chevron by 59.6% during the 2nd quarter. APG Asset Management N.V. now owns 5,518,090 shares of the oil and gas company’s stock valued at $602,978,000 after acquiring an additional 2,061,187 shares in the last quarter. Vanguard Group Inc. grew its stake in Chevron by 1.0% during the 2nd quarter. Vanguard Group Inc. now owns 157,513,617 shares of the oil and gas company’s stock valued at $19,600,995,000 after acquiring an additional 1,572,940 shares in the last quarter. Finally, PGGM Investments purchased a new stake in Chevron during the 2nd quarter valued at about $164,371,000. 65.69% of the stock is owned by institutional investors and hedge funds.

With Coal’s Decline, Pennsylvania Communities Watch the Rise of Natural Gas-fueled Plastics — For Beaver County, just northwest of Pittsburgh, the construction of Royal Dutch Shell’s towering new plastics factory overshadows the closure of the Bruce Mansfield Power Plant, the state’s largest coal power station, located along the same stretch of Ohio River in western Pennsylvania. The juxtaposition of these two projects, in which one powerful fossil fuel supply rises as the other falls, reflects the broader pattern of changing energy sources in America. A growing chorus agrees the expansion of the natural gas industry, which feeds plastics and petrochemical plants like Shell’s, is moving the U.S. in the wrong direction to prevent catastrophic impacts from climate change. The shale gas industry has been building demand for fossil fuels from its fracked oil and gas wells by promoting turning its products into plastics and petrochemicals. DeSmog’s Sharon Kelly has created a field guide to the petrochemical and plastic industry and reported on the climate impacts of building a new petrochemical corridor in America’s Rust Belt and expanding the existing corridor, and Louisiana’s Cancer Alley, on the Gulf Coast. At the forefront of this buildout, the Shell Petrochemical Complex under construction in Beaver County is designed to take ethane from the region’s natural gas fields and transform it into polyethylene, a plastic used in consumer products like food packaging and car parts. At a packed November 6 public meeting at the Beaver Library, Matt Mehalik, executive director of the advocacy group Breathe Project, presented a slide show about the plant and the buildout of the petrochemical industry in the Ohio River Valley. He labeled the Shell plant’s annual permitted 2.2 million tons of carbon dioxide emissions “a disaster from a climate perspective.” He then pointed to the Cheswick Power Plant, another old coal station 18 miles northeast of Pittsburgh, as a comparable carbon polluter. Climate pollution isn’t the only concern for a region which has received an ‘F’ grade for high ozone days (the main component of smog) and particulate pollution in the American Lung Association’s 2019 State of the Air report. Shell’s plastics plant could be joined by similar plants proposed nearby, including PTT Global Chemical’s in Belmont County, Ohio, which would also affect regional air quality. And rumors that ExxonMobil has been searching in Beaver County for a suitable location to build a petrochemical plant like Shell’s have many worried that the area will become too polluted to live in.

Pennsylvania Communities Grow Wary of Worsening Air Pollution as Petrochemical Industry Arrives – While the Ohio River Valley, long home to the coal and steel industries, is no stranger to air pollution, the region’s natural gas boom and burgeoning petrochemical industry threaten to erase the gains of recent decades. Concerns about air quality, which has already begun declining nationally since 2016, are growing rapidly for those living in the shadow of Shell’s $6 billion plastics plant under construction along the Ohio River in western Pennsylvania’s Beaver County.Residents and activists from the greater Pittsburgh area fear that worsening air quality will lower the value of homes, deter new clean business development, and sicken people. “It is not lost on us that Allegheny Health Network is building a cancer institute directly above the cracker plant at the Beaver County Mall,” Matt Mehalik, executive director of the advocacy group Breathe Project, said at a November 6 public meeting about the Shell plastics plant, also known as an “ethane cracker.” “There is a certain degree of sick irony about that.”He warned of the significant healthcare impacts, and the associated financial cost to treat them, from the development of the petrochemical industry in the region.According to the U.S. Office of Fossil Energy, Appalachian shale gas, primarily from the Marcellus and Utica shale plays, is the main driver for growth of the U.S. natural gas industry. “The Appalachian region has abundant resources and extensive downstream industrial activity, particularly in the quad-state area of West Virginia, Pennsylvania, Ohio, and Kentucky,” a post on the Office of Fossil Energy website says, adding that petrochemical infrastructure represents a key opportunity for the region.The agency touts the potential jobs and business and tax revenues the petrochemical industry could bring to the region. Missing is any mention that with the natural gas and petrochemical industries’ expansion comes a rise in emissions of greenhouse gases, volatile organic compounds, and particulate matter, along with related environmental and health impacts. Mehalik listed to me the reasons for the growing number of people pushing back against the fossil fuel industry in the Ohio River Valley, despite its traditionally industry-friendly attitudes. “The region is experiencing increasing levels of trauma in the form of environmental disasters that are catching people’s attention,” he said. “The explosion of pipelines, drilling mud spills, wells that are vented, frack water truck traffic everywhere, permitting fights in local municipal governments regionally over petrochemical infrastructure projects, stories of farmland and people’s homes being ruined, water supplies being ruined, and an increasing sense of doom as the Shell plant’s future reality takes shape on the banks of the Ohio [River] across from neighborhoods.”

Two Big Reasons to Attend Appalachian Basin Real Estate Conference (press release) Royal Dutch Shell is building a $7 billion world class polymers cracker plant in Monaca, Beaver County, Pennsylvania. The plant is nearing completion and could go into operation fourth quarter of 2020. There are currently over 6,000 workers currently on the site as it moves to completion.The second world class cracker plant is a joint venture between with PTT Global Chemical Plc (PTTGC), Thailand’s largest petrochemical producer and Korea-based Daelim Industrial Company. PTTGC is about to make the Final Investment Decision (FID) on $7-$9 billion investment on plant which will be located in Dills’ Bottom, Belmont, County, Ohio. While the FID is pending, considerable preparation work is currently being done on the site.Other global oil companies are evaluating petrochemical sites in the Appalachian Basin (Marcellus and Utica shale plays). In addition to these companies, South Korean and Taiwanese companies have had representatives in the Appalachian Basin considering the opportunities that will be evolving in the region. “It is becoming apparent the Appalachian Basin will be generating even greater investment in the upcoming years,” commented Joe Barone, President, Shale Directories, LLC, the company producing the Appalachian Basin Real Estate Conference. The development and investment opportunities attached two world class cracker plants are once in a generation. Attendees at Shale Directories’ Inaugural Appalachian Basin Real Estate Conference will be afforded the opportunity to see first-hand the developments which are taking place as well as the ones that are planned. The Appalachian Basin Real Estate Conference will be held on December 11th and 12th at Oglebay Resort in Wheeling, West Virginia.

Pennsylvania to fund research into fracking health dangers – Pennsylvania Gov. Tom Wolf said Friday his administration will spend $3 million on a pair of studies to explore the potential health effects of the natural gas industry, taking action after months of impassioned pleas by the families of pediatric cancer patients who live in the most heavily drilled region of the state. Dozens of children and young adults have been diagnosed with Ewing sarcoma and other forms of cancer in a four-county area outside Pittsburgh, where energy companies have drilled more than 3,500 wells since 2008. Ewing has no known environmental cause, and gas industry officials say there is no evidence linking pediatric cancer to drilling. But the families nevertheless suspect that drilling and hydraulic fracturing, the method that energy companies use to extract natural gas from shale rock, played a role. They have been pressing the Wolf administration for an investigation into any possible link between this extremely rare form of bone cancer and shale gas development – and confronted Wolf himself at the Capitol on Monday. “I want to thank the families that have shared their heartbreaking stories,” the Democratic governor said in a statement Friday. “I understand and support the concerns of parents and desire of community members to learn more about the possible reasons for these cancer cases.” The research, he said, is meant to address “the concern that there is a relationship between hydraulic fracturing and childhood cancers.” One study will use existing research that linked natural gas activity to medical conditions like asthma and, applying the same methodology, try to replicate those earlier findings in the population in southwestern Pennsylvania. The other study will focus specifically on rare childhood cancers, including Ewing sarcoma, with researchers looking at whether these young cancer patients were exposed to fracking more often than a control population.

Pennsylvania To Spend $3M To Study Possible Link Between Fracking And Spike In Childhood Cancer (KDKA/AP) – Pennsylvania Gov. Tom Wolf says his administration will spend $3 million on a pair of studies to explore the potential health impacts of the natural gas industry.Wolf is taking action after months of impassioned pleas by the families of pediatric cancer patients who live in the most heavily drilled region of the state. Dozens of children and young adults have been diagnosed with Ewing sarcoma and other forms of cancer in a four-county area outside Pittsburgh. Ewing has no known environmental cause, but the families have been pressing the Wolf administration for an investigation into any possible link between this extremely rare form of bone cancer and shale gas development. Wolf says the research will address “the concern that there is a relationship between hydraulic fracturing and childhood cancers.” His statement reads: “Ewing Sarcoma is rare and currently has no known environmental cause, but it is imperative that we do all that we can to thoroughly research and advance the science on the health effects of oil and gas extraction. “Secretary of Health Levine and her team, including the commonwealth’s top epidemiological experts, have done diligent work to explore possible avenues to look more closely at available science. To further their efforts, I am directing the Department of Health to undertake two research projects that will help to better understand the possible health effects related to the natural gas industry, in particular as they pertain to confirmed cases of Ewing Sarcoma and other childhood cancers in southwestern Pennsylvania. “This investment will advance science by building upon previous research and investigating the concern that there is a relationship between hydraulic fracturing and childhood cancers..”State Secretary of Health Dr. Rachel Levine released this statement: “It is essential to better understand the scientific evidence of public health issues related to hydraulic fracturing. These studies will provide us with a more in-depth understanding of this issue than we have been able to do with the resources at our disposal..” The news of the funding for the studies comes one day after a KDKA Investigation aired into whether there could be a link between fracking and a spike in childhood cancer.Emotions are running high throughout the four-county area of Fayette, Greene, Washington and Westmoreland counties, and at a recent meeting in Canon-McMillan High School’s Auditorium. With fewer than 250 cases of Ewing sarcoma recorded annually in the United States, parents and family members believe they are living in a cancer cluster and the shale gas industry is to blame.

Pennsylvania’s LNG export boom heads to Japan – At the busy Port of Yokohama, near Tokyo, tankers full of coal, liquefied petroleum gas, and liquefied natural gas, or LNG, sail into the harbor from all over the world, including Pennsylvania. Since spring 2018, shale gas from Pennsylvania has been shipped out of an export terminal on the Chesapeake Bay to 20 different countries. Most of those ships went to Japan. Right now, natural gas on the global market is fetching almost $6 per mmBtu, or million British thermal units – about triple the price Pennsylvania producers get selling to the domestic market. Speaking at a recent Chamber of Commerce event in Philadelphia, American Gas Association president Karen Harbert extolled the benefits of exports. “We’ve got the cheapest gas in the world,” said Harbert. “And we’re trading all over the world. Every molecule that we can export that supplants the mullahs of Iran is a good day for America.” The abundant drilling of Pennsylvania’s Marcellus and Utica Shale has created a glut of natural gas and driven down prices. In the past 12 years, shale gas producers drilled more than 12,000 fracked gas wells in northeastern, central, and southwestern Pennsylvania. The price of that overproduction means Pennsylvania’s gas is now selling at about $2.30 per mmBtu. In 2008, before the shale gas boom, natural gas prices averaged almost $9/mmBtu. Producers eager to find new markets now ship gas overseas, aided by newly built pipelines and export terminals. Ira Joseph, head of gas and power analytics of S&P Global Platts, said there’s been an “unprecedented surge” in new supplies of LNG in 2019. “In the case of the Northeast, the Marcellus and Utica, it’s a constant fight to support price,” said Joseph. “Production has gone up so much that to push gas out of the region, it’s been a constant battle to create new pipeline capacity, and reverse existing pipeline capacity to create demand for the gas.” Exports won’t necessarily force the price back up to 2008 levels, Joseph said, but they will prevent further dips. Five new LNG export terminals have come online since 2016. Another 16 have been approved and eight are pending approval by the Federal Energy Regulatory Commission, or FERC. Japan is the world’s largest importer of LNG. In March 2011, its energy needs were suddenly transformed when the massive Tohoku earthquake and subsequent tsunami led to a meltdown at the Fukushima Daiichi nuclear power plant. Residents fled the radiation; some never returned to their homes. Japan shut down its nuclear power plants in the wake of that disaster. Increased imports helped make up for the loss. And the newly abundant U.S. shale gas wells provided a solution.

Report calls for ‘cleaner, safer’ future for refinery site (AP) – A city report calls for a “cleaner, safer, and healthier” future for the site of a closed Philadelphia oil refinery but says the near-term future of the site will be determined by the ongoing federal bankruptcy process. The report by the mayor’s Refinery Advisory Group, which held public hearings last summer, calls for uses that protect public safety and health but that also provide “significant long-term economic benefit.” It says, however, that the 1,300-plus-acre site is large enough to support multiple uses, which should include “as many economically, socially, and environmentally positive activities as possible.” Federal investigators said last month that failure of an aging elbow pipe appears to have led to the June 21 fire at the Philadelphia Energy Solutions plant, which closed, laying off almost 1,000 workers.

Bankrupt Philadelphia refiner seeks $2.5 million in executive bonuses -court filings – (Reuters) – The bankrupt Philadelphia Energy Solutions oil refiner is seeking a minimum of $2.5 million in bonus payments to the refiner’s top executives as part of a plan to reorganize or sell the company, U.S. bankruptcy court filings show. This would represent a potential second round of bonuses for PES executives, who were already paid roughly $4.5 million in retention awards after a massive June fire that resulted in the plant’s shutdown. PES laid off hundreds of workers without severance pay or benefits following the blaze. The latest round of bonuses will be paid if PES confirms a reorganization within 15 months of its July Chapter 11 bankruptcy filing, according to documents filed with the United States Bankruptcy Court for the District of Delaware on Friday. Alternatively, the $2.5 million could also be paid if PES secures at least $300 million in net proceeds from a sale, insurance proceeds or other payments, including a lawsuit the refiner filed against the federal government over excise taxes, the documents show. Under the plan, Chief Executive Officer Mark Smith would receive 29% of any incentive bonuses, PES board of directors Chairman Mark Cox gets 25%, Chief Financial Officer Rachel Celiberti 18% and attorney Anthony Lagreca would get 14%. Three other employees would receive smaller amounts.

National Grid to lift natgas moratorium after NY settlement (Reuters) – National Grid said on Monday it would pay $7 million in compensation for a moratorium on new gas customers in Brooklyn, Queens and Long Island after the utility reached an agreement with the State of New York. National Grid will lift its moratorium for about two years. Its settlement includes a commitment to invest $8 million in energy efficiency programmes and an additional $20 million in clean energy projects, it said. The company had said in May it would not process new applications for natural gas services in its New York City and Long Island service area until Williams Cos Inc’s Northeast Supply Enhancement (NESE) pipeline received the permits it needs to proceed. Since then, New York Governor Andrew Cuomo threatened to revoke its certificate to operate its gas franchise in downstate New York, saying the utility had failed to provide “adequate and reliable service.”

National Grid Gas: Independent Monitor To Oversee Return Of Service For 3,700 Customers – CBS New York – The New York State Public Service Commission is stepping in to help resolve the end of National Grid’s gas moritorium that denied service to 3,700 customers.In addition to paying $36 million in penalties, the PSC will also establish an independent monitor for compliance as the utility resumes service hook-ups to thousands of businesses and homeowners.On Monday customers in Brooklyn, Queens and Long Island got word they would finally get hooked up for their natural gas service needs.Gov. Andrew Cuomo announced an agreement with the utility to immediately lift a six-month-long moratorium on gas service that left thousands with no way to heat their buildings or run their businesses, reports CBS2’s political reporter Marcia Kramer.For months, CBS2 has been demanding answers from National Grid and the governor after thousands of customers were left without gas, including a $92 million development in Nassau County and a Long Island municipal fire department in urgent need of upgrading its facilities.The agreement promises the utility will meet the demand for the next two years, allowing it to restore service to any customers that it had refused and grant all pending applications.

The pipeline war on Long Island isn’t really over – Gov. Andrew Cuomo and National Grid struck a deal on Nov. 25 to end a moratorium on new natural gas hookups in Brooklyn and Queens and on Long Island, but the political fight continues over the future of a proposed natural gas pipeline that would run through Lower New York Bay from New Jersey to New York. Environmentalists say that slowing climate change requires the state to block fossil fuel projects, but the latest deal between New York and National Grid still offers the company a chance to make its case that a pipeline is necessary to ensure economic development in the downstate area – though it does take away a key source of leverage from the company. National Grid imposed the moratorium in May, after the state Department of Environmental Conservation withheld a state water quality permit requested by the Oklahoma-based Williams Companies to build the Williams pipeline, which is officially known as the Northeast Supply Enhancement Project. Williams has resubmitted the application, which is currently under review by the department. The company will also need a similar permit from New Jersey before it can proceed with the project, which has already received necessary approvals from the federal government. The agreement requires National Grid to provide thousands of new gas hookups that had been put on hold in recent months, pay $36 million in penalties and develop within two years a long-term plan to ensure a steady gas supply going forward. National Grid will have three months to consider options before a series of public hearings in the four counties that were affected by the moratorium: Queens, Kings (Brooklyn), Nassau and Suffolk. The goal will be to implement this long term strategy by fall 2021 and while renewable energy and conservation programs will be in the mix of ideas, so will the controversial pipeline that led to the moratorium in the first place. The pipeline would provide roughly 15% of the gas that the company says it needs in future years, according to Elizabeth Arangio, director of gas supply planning at National Grid. “If the project does not become available by the 2020/21 winter season, the companies will not be able to prudently satisfy new or additional service requests without jeopardizing the companies’ ability to provide safe, reliable service to its existing firm customers,” she told the Public Service Commission in April.Pipeline opponents have disputed those claims and cited data showing gas demand is not growing at the rate that National Grid said it would. Increased efficiency and conservation of both gas and electricity have eaten into that projected 10% growth, according to onereport published by opponents of the pipeline.

Gas bans, once a California specialty, arrive in New England –Cities in California and Massachusetts are advancing what has become the newest trend in the local fight against climate change: bans on natural gas hookups in new buildings. In July, Berkeley, California, outlawed them. A handful of other California communities soon followed. Then, last week, Brookline, Massachusetts, took up the cause. In a 200-3 vote at a town meeting – the form of citizen government employed by many New England towns – Brookline residents approved a plan to block gas hookups in new homes and in major renovations. “We need to do something about climate change,” Werner Lohe, one of the measure’s sponsors, told The Boston Globe. “We need to stop burning fossil fuels inside our buildings. … This is the first step in Brookline toward an all-electric, all-renewable-energy world.” Berkeley and Brookline have a lot in common. Both are among the most liberal communities in overwhelmingly blue states. Both are well-educated and affluent. Brookline’s vote nevertheless signals an important shift in local climate action. Where municipalities previously have focused on reducing emissions in electricity generation, attention is shifting toward the carbon footprint associated with heating and cooling buildings. In Massachusetts, residential buildings account for roughly 15% of the state’s greenhouse gas emissions. Commercial buildings represent another 9.5%. Power plants, by contrast, are responsible for almost 20% of Massachusetts’ greenhouse gases. “If we are going to decarbonize the economy, we have to stop putting gas in new buildings now,” said Deborah Donovan, Massachusetts director at the Acadia Center, an environmental group. “Building stock built now will be us in 2050 when we need to be decarbonized.” But what replaces New England’s fleet of old oil furnaces is a matter of mounting debate. Local climate hawks increasingly are pushing electric heat pumps as a low-carbon alternative, arguing the newer brands are able to withstand the region’s long winters. They’ve had particular success in northern New England, which lacks widespread gas infrastructure.

Warmer Weather And Record High Production Send Natural Gas Prices Tumbling – After what looked like a rather promising natural gas open Sunday evening for the bulls, we have seen nothing but selling since then. Today is the December contract’s final day on the board, and as of this writing, it sits at a price level of $2.43, more than 25 cents lower than we saw immediately after the Sunday open. Why such carnage? The primary reason has been due to a solid warming trend in weather models since Sunday evening. Sunday night’s models all trended solidly warmer, and that continued into this morning, with models solidly warmer compared to 24 hours ago. An even better visualization of the change comes from looking at how forecast trended since Friday in map form. Here is the 11-15 day forecast from midday Friday run of the GEFS: Now, let’s look at the latest run, valid the same days: Why such a large change? Models have had a difficult time resolving the pattern in the high latitudes. Latest modeling features more troughing (lower 500 mb heights) both around Alaska and over Greenland, a setup which typically keeps strong cold bottled up well north of the United States. As a result, the cold shown in Friday’s models has faded away, lowering forecast weather demand. While weather is most often the primary driver of price volatility at this point in the season, it was not the only piece of bearish news. We continue to see new all-time highs in dry production, with new highs over the weekend, and yet another new high just yesterday. We are also heading into a holiday period, typically a time when we see a weaker overall market in terms of gas burns, something which could be exacerbated this week, as wind output looks rather high through the long holiday weekend. To summarize, we’ve basically seen a “perfect storm” of bearish factors line up so far this week. Granted, the weather pattern is not super warm, so it could be worse, but each of the last two weeks also started off with warmer changes, only to move back colder later in the week.

US natural gas in underground storage falls 28 Bcf to 3.160 Tcf: EIA – US working natural gas volumes in underground storage dropped by 28 Bcf, decreasing by just under half the five-year average, while the NYMEX January Henry Hub contract fell about 3 cents after the number’s release, continuing recent declines and nearing an all-time low.Storage inventories fell to 3.610 Tcf for the week ended November 22, the US Energy Information Administration reported Wednesday, one day ahead of the usual schedule because of the Thanksgiving holiday in the US.The pull was slightly more than an S&P Global Platts’ survey of analysts calling for a 25-Bcf draw. Survey responses were a withdrawal of between 14 Bcf to 33 Bcf.The withdrawal was well below the 70 Bcf pull reported during the corresponding week in 2018, as well as the five-year average draw of 57 Bcf, according to EIA data. As a result, stocks were 548 Bcf, or 18%, above the year-ago level of 3.062 Tcf and 31 Bcf, or 1%, above the five-year average of 3.641 Tcf.The draw proved well below the 94 Bcf pulled from working gas in storage reported the week prior.Temperatures across the US rose 5 degrees week on week, with warmer weather particularly focused in the Midwest and South Central storage regions. The EIA reported a net injection of 2 Bcf into South Central region storage fields and 1 Bcf addition in the Pacific region.Although temperatures remain 2 degrees below normal, warmer weather for the week that ended November 22 cut out an estimated 49 Bcf of residential and commercial demand, according to S&P Global Platts Analytics. Weaker power burn also contributed to the bearish draw, declining an estimated 2.1 Bcf/d, largely in the Southeast.Inventories will continue to be supported into December from strong production receipts out of Texas and the US Northeast, keeping the gas market bearish, barring another cold snap. The now prompt NYMEX January Henry Hub contract has been under heavy selling pressure this week, as forward-looking temperatures have moderated. Since hitting a monthly peak of just under $3.00/MMBtu November 5, the January contract has contracted by roughly 15%. Indeed, entering the report the contract was sitting just above $2.50/MMBtu, or within striking distance of the all-time intraday low of $2.48/MMBtu August 5.

Natural Gas Tumbles as Temperatures Set to Rise— Natural gas prices capped their biggest November drop since 2001 as forecasts showed no sign of the teeth-chattering U.S. cold needed to boost demand for the heating fuel. The outlook for the second week of December turned warmer overnight, with temperatures now expected to be above normal across most of the contiguous U.S., according to forecaster Commodity Weather Group LLC. “The trends into mid-month should keep getting warmer” without evidence of a stronger high-pressure area that would allow frigid conditions to settle over the Lower 48, CWG said. As gas output from shale basins climbs to fresh highs, the market needs a polar blast to help siphon off the excess supply. Though exports have soared to a record and American homes and businesses are using more of the fuel than ever, production is outstripping demand, leaving gas stored in depleted aquifers and salt caverns near a two-year high. “The weather outlook continues to fall apart for December,” says John Kilduff, founding partner at Again Capital. “Futures broke some key support at the $2.50 level,” and they may now be heading for $2.20, he said. Gas for January delivery fell 22 cents, or 8.8%, to $2.281 per million British thermal units on the New York Mercantile Exchange. Prices were down more than 13% in November, and the drop on Friday was the worst one-day slide since January. There was no settlement Thursday due to the U.S. Thanksgiving holiday and all transactions were booked Friday. U.S. gas production rose to 1.5% in August to 112.879 billion cubic feet per day from a month earlier, according to a U.S. Energy Information Administration report Friday.

Kennebunkport oil leak abates, but source still a mystery– The origin of some dyed #2 fuel oil that the local wastewater treatment plant received through the town’s sewer system early last week is still a mystery. “We have not located the source yet,” Deputy Director of Public Works Chris Simeoni said on Monday afternoon. Simeoni added that the plant is no longer receiving the fuel oil and has cleaned up the plant’s collection system as much as possible. He said efforts are underway to eliminate the possibility of the fuel oil from being introduced into the system in the future. “It’s a water quality concern,” he said. The plant, located on Recreation Way, announced on Thursday, Nov. 21, that it had received what appeared to be the dyed #2 fuel oil via the town’s sewer system on Monday, Nov. 18, at 11:30 a.m. “It is difficult to determine how much fuel oil was received at the plant,” the town stated in a news release. “Crew members immediately began checking the collection system for the source.” They narrowed it down to the residential area of Dock Square. but could not pinpoint the precise source, according to the town. Crew members have been contacting occupied properties in the area and conducting inspections to try to locate the source. They have even been attempting to contact the owners of vacant properties to request making inspections, as well. “It is possible that a residence (or) business may have experienced a catastrophic oil tank (or) oil line failure that may have gone unnoticed and was inadvertently discharged into the town’s sewer system by means of a sump pump,” the town stated in its release.

Public comments being taken on lawsuit against Mountain Valley Pipeline — Before a judge decides whether to approve a $2.15 million settlement of a lawsuit alleging environmental damage caused by building the Mountain Valley Pipeline, state regulators will consider public comments on the proposal. About 130 people had submitted input by midday Tuesday, according to Ann Regn, a spokeswoman for the Virginia Department of Environmental Quality. The deadline for written comments is Wednesday. DEQ and the State Water Control Board sued Mountain Valley last December, saying the company violated state regulations meant to limit erosion and sedimentation more than 300 times in building the largest natural gas pipeline ever to cross Southwest Virginia. In October, Attorney General Mark Herring announced a settlement that provides a framework for court-ordered enforcement going forward, with the possibility that the financial penalty will exceed the $2.15 million agreement if additional violations occur. Mountain Valley agreed to conditions – which include hiring independent monitors to make inspections beyond what had previously been required by the state – as part of a consent decree that will soon go to a judge in Henrico County Circuit Court. DEQ will review the comments before sending the settlement to the judge, Regn said. Digging trenches to bury the 42-inch diameter steel pipe along steep mountain slopes has led to widespread runoff, washing harmful sediment into nearby streams and onto the property of adjacent landowners. Meanwhile, separate lawsuits against federal agencies led to the suspension of two sets of permits for the pipeline last year, and a third approval was more recently pulled while an appeals court reviews yet another challenge, this one of the project’s impact on endangered species of fish and bats. The Federal Energy Regulatory Commission, the lead agency overseeing construction of the $5.5 billion project, ordered new construction to cease Oct. 15 until the most recent lawsuit, filed by environmental groups against the U.S. Fish and Wildlife Services, is resolved. Since then, Mountain Valley and environmental advocates have continued to spar over pipeline work, which FERC ordered be limited to stabilization of work sites and erosion-control measures to prepare for a winter lull.

FERC takes more time for review of MVP Southgate after route changes – Platts – The Federal Energy Regulatory Commission has pushed back the environmental review schedule for the 73-mile, 375 MMcf/d MVP Southgate project, due to recently proposed route changes, and set the timetable for reviewing the 750 MMcf/d Cameron Expansion project in Louisiana. The natural gas project would connect the mainline of the Mountain Valley Pipeline near Chatham, Virginia, and extend to Rockingham and Alamance counties in North Carolina. FERC now expects to release a final environmental impact statement for MVP Southgate on February 14, 2020, rather than December 19 of this year as previously proposed. FERC pointed to changes to the route and revised data for resource impact, filed October 23, in explaining the extension. “Because the supplemental information needs further review and required an additional notice to the landowners affected by the route changes, issued November 15 … commission staff has revised the schedule for issuance of the final EIS,” FERC said. In a July draft environmental impact statement, FERC staff found the project would have environmental impacts, but those would be reduced to less-than-significant levels through avoidance, minimization and mitigation (CP19-14). The report drew objections from environmental groups, concerns about data gaps from the Fish and Wildlife Service and a request from the Environmental Protection Agency that FERC study an alternative route in North Carolina. Developers of two other pipelines, Dominion Energy-led Atlantic Coast Pipeline and Transcontinental Gas Pipe Line, also touted their ability to offer alternatives that might reduce environmental impacts. The MVP-Southgate project is supported by a 300,000 Dt/d firm contract with the utility Dominion Energy North Carolina, formerly PSNC Energy. The project is targeting in-service in 2021, extended from the November 1, 2020, date listed in its initial application at FERC. The larger, 303-mile, 2 Bcf/d MVP project in October pushed back its in-service target in late 2020 and bumped up its cost estimate to a range of $5.3 billion to $5.5 billion. That project has been targeted by legal challenges to its non-FERC permits, and most recently faced a 4th US Circuit Court of Appeals stay involving its Endangered Species Act authorizations.

SUPREME COURT: Atlantic Coast pipeline arguments set for February — Wednesday, November 27, 2019 — Supreme Court justices are set to hear oral arguments in a high-profile legal dispute over the Atlantic Coast pipeline early next year.

Expanding pipeline industry in Louisiana– The pipeline industry is prominent here in the state and quickly expanding.According to the U.S. Energy Information Administration, there are 20 natural gas pipeline projects queued up in Louisiana. Seven projects completed construction this year.The map of Louisiana is covered with pipelines. “Our chancellor says that it looks like a spaghetti bowl because there are pipeline running everywhere because we have both liquid and gas pipelines running through the state,” said David Hayes, director of workforce solutions at SOWELA Technical Community College.SOWELA is starting a Pipeline Training Academy to train high-school students in foundational skills, those that want to enter the industry, and those that want to move higher that are already in the industry.“There’s nothing really in the area that is training people for the pipeline industry,” Hayes said. “There’s a few smaller things that happen in Houston that I’m aware of but nothing that is a true program or academy like this that will have the impact that we hope this one has.” The academy will have certification programs in more than just pipeline construction, it will also provide certification in operation and management. The curriculum will also focus on more than just natural gas, but water and other aspects of the pipeline industry.

OFFSHORE DRILLING: BOEM rejects $4.4M in leases after critical federal report — Wednesday, November 27, 2019 — The Bureau of Ocean Energy Management (BOEM) rejected $4.4 million worth of oil and gas industry bids to potentially drill in the Gulf of Mexico from a recent auction that otherwise netted $155 million.

Congressman Higgins says Fed has helped the oil and gas industry, now it’s Louisiana’s turn – Federal agencies are making changes to bring more oil and gas jobs to the Louisiana coast, but U.S. Representative for Louisiana’s 3rd District Clay Higgins said the Bayou State could miss out unless Baton Rouge takes action as well. The Bureau of Safety and Environmental Enforcement (BSEE) and The Bureau of Ocean Energy Management released a report indicating the Gulf of Mexico will now be treated as two separate provinces: shallow water and deep water. To increase drilling, those investing in shallow water reservoirs will get a higher return on investments and their applications will be considered on a per-project basis. In 2018, 97 platforms abandoned the continental shelf while zero new ones were constructed, but with federal reform and new tech which can locate previously untapped resources, Congressman Higgins said there is potential to reverse the trend. “There’s a tremendous opportunity,” U.S. Representative Higgins told News 10. “We have done everything possible at the federal level to create this opportunity, and we need a little help from Baton Rouge.” Congressman Clay Higgins said he is confident BSEE’s plan to make drilling in the Gulf of Mexico more profitable will work, “The prospect of new projects coming to the gulf in Louisiana is much greater now then it was two weeks ago.”

Commonwealth LNG lands supply deal for one-third of proposed production – The proposed Commonwealth LNG export terminal in southwest Louisiana has landed a marketing and supply deal that will account for more than a third of the facility’s planned production. In a Monday morning statement, the Houston liquefied natural gas company announced a deal with Gunvor, a global LNG marketing and trading firm headquartered in Geneva, Switzerland. Commonwealth LNG is seeking permission from the Federal Energy Regulatory Commission to build a brand new liquefied natural gas export terminal at the mouth of the Calcasieu Ship Channel along the Gulf of Mexico in Louisiana. Under the deal, Gunvor will take 3 million metric tons of production from the plant and help Commonwealth LNG land contracts to sell the rest of the facility’s production on the global market. Business: Four approved LNG projects to bring billions to South Texas Commonwealth LNG’s application remains under review by FERC officials, who are not expected to make a permit decision until the first quarter of 2021. The company expected to make a final investment decision shortly thereafter and deliver its first shipments of LNG in second quarter of 2024. The announcement comes less than a week after FERC officials approved permits for four LNG export terminal projects in Texas. Although the four projects have obtained permits, they still need to land contracts for their production and secure financing for the multi-billion projects.

EDITORIAL: Gassed: LNG companies advance, official actions should start – Three companies that want to build liquefied natural gas export terminals cleared a major hurdle Thursday when they all received approval from the Federal Energy Regulatory Commission. FERC approval brings the sites closer to reality, although the companies are still at various stages in the permitting process with other agencies including the U.S. Fish and Wildlife Service, Texas Commission on Environmental Quality and the U.S. Army Corps of Engineers. The companies propose to receive the LNG through pipelines and trucks, then load it onto tanker ships for worldwide distribution. Together they represent nearly $40 billion investment at the South Texas port. Final approval by all agencies isn’t assured and environmentalists and others opposed to the terminals have pledged to step up their fight against them. However, we note that most of the gas that moves through the local port would be shipped to fuel electrical plants worldwide, reducing the need to continue relying on coal- and oil-burning turbines that are greater polluters. LNG is around 16% cheaper than coal, saving users money, and it burns up to 60% cleaner than coal. Even if the ultimate goal is total reliance on renewable energy sources, LNG offers a viable bridge that can be used until technology and cost make that goal feasible. Locally, the terminals bring the promise of jobs. In addition to more than 1,000 total workers involved in the construction of the buildings and pipelines, together they promise to employ hundreds of permanent full-time workers, many, they say, earning salaries above $50,000.M

State permit for Texas LNG remains up in the air – Houston liquefied natural gas company Texas LNG landed a federal permit for its proposed export terminal at the Port of Brownsville but its state permit remains tied up in a legal process that may take at least another four months to sort out. After more than three years of review, the Federal Energy Regulatory Commission granted Texas LNG a permit authorizing the plant to make up to 4 million metric tons of liquefied natural gas per year. Before construction can begin, the company must secure customers, financing and obtain permits from nearly a dozen state and federal agencies. But the company may not be able to obtain a state air pollution permit from the Texas Commission on Environmental Quality until March. With the project facing opposition from the City of Port Isabel and residents from the nearby colonia of Laguna Heights, a panel of judges with the Texas State Office of Administrative Hearings has been tasked with reviewing the state air pollution permit.The judges heard two days of testimony from both sides on Wednesday and Thursday. Attorneys for Texas LNG, Port Isabel and the colonia residents have until Dec. 10 to file their written closing arguments. Responses are due by Dec. 20. The judges have until Feb. 24th to make a ruling. Once a ruling has issued, their decision will be placed on the next TCEQ commissioners meeting, which would most in March at the earliest.

Evacuation Ordered After Apocalyptic Fireball Erupts Over Texas Town In Chemical Explosion – More details are emerging after a massive chemical explosion at a southeast Texas refinery in the early hours of Wednesday ripped through the plant and shattered windows across nearby residential areas of Port Neches, which lies about 90 miles east of Houston. People in homes that are miles away from the blast site reported windows, doors, and rooftops being blown out by the initial shock wave from the blast. All residents within a half mile of the burning chemical plant have been issued a mandatory evacuation order, and so far plant operator TPC said its more than 175 full-time employees and 50 contractors are all accounted for, though a handful were transported to the hospital for burns and other injuries, at least one in serious condition. Some of the eyewitness accounts of the chemical explosion collected by NBC News convey at atmosphere of confusion when the first blast occurred at about 1am, resulting in a blaze that overtook much of the plant.Currently the emergency is considered “ongoing” but response crews say they will soon bring it under control.”Their doors were blown open… doorknobs themselves were shot across rooms,” one resident said. “We didn’t know what had exploded and what gasses were in the air,” the woman said, and described a panic scramble of nearby residents to flee the area: “I’ve never seen the traffic like that ever.” And another eyewitness identified as Omar Hamza described a “loud boom” and “bright flash” which was followed by a deafening explosion.”We waited for a little bit and we kind of looked outside and everyone was running around and freaking out.” He continued, “So we just grabbed the important stuff we needed – I left a note on the door and we left.” Jefferson County Judge Jeff Branick, who lives within the evacuation zone, described an apocalyptic scene where he initially thought they were under attack: Branick, who lives less than a mile away from the explosion site, said his wife thought someone was shooting at their home when she heard the blast. “I ran out with my pistol,” the judge said, before he realized it was a refinery explosion.

Residents flee fourth major Texas petrochemical fire this year – (Reuters) – Three workers were injured and residents of four towns were told to evacuate after explosions on Wednesday at a Texas petrochemical plant, the latest in a series of chemical plant accidents in the region.An early morning blast at a TPC Group complex in Port Neches, Texas, was followed by a series of secondary explosions that shattered windows and blew locked doors off their hinges. About 60,000 people within a four-mile (6.4 km) radius of the facility were ordered to leave after a distillation column blew up about at 2 p.m. (2000 GMT) It was uncertain when residents would be able to return, Jefferson County chief executive Jeff Branick said. The explosion was reported by local media and other eyewitnesses. Branick ordered the departures on the eve of the Thanksgiving holiday out of fear heat from the fire would ignite petrochemical tanks at the site. Firefighters were spraying water on the spherical tanks containing butane and other fuels to keep them cool, officials said. The mandatory evacuation covers Port Neches and Groves, and portions of nearby Nederland and Port Arthur, Texas, officials said. State police would patrol the communities to prevent looting, Branick said. The plant sits on a 218-acre (88.22-hectare) site located about 90 miles (145 km) east of Houston. It processes petrochemicals used to make synthetic rubber and resins, and a gasoline additive. TPC is nestled among several other chemical complexes that were not affected by the flames. Peyton Keith, a TPC spokesman, said fire officials were determined to let the fire in a butadiene processing unit burn itself out, and were attempting to keep the flames from spreading. He could not say when the fire could be extinguished. A smoky plume visible from miles (km) away released volatile organic compounds that can lead to eye, nose and throat irritation, shortness of breath, headaches and nausea, pollution regulator Texas Commission on Environmental Quality (TCEQ) said.

Just One Week After Trump Rolled Back Safety Measures, Chemical Plant Explosion Rocks Texas Town – Concerns about air quality lingered Wednesday following a major early morning explosion at a chemical plant in Port Neches, Texas that shot a fireball into the sky. The disaster at the TPC Group-owned facility roughly 94 miles west of Houston took place a week after the Trump administration rolled back safety rules meant to protect workers and people who live near chemical plants. In light of the timing, Catherine Fraser, Environment Texas’s clean air associate, called Wednesday’s explosion “a timely warning that state and federal officials need to do more to keep communities safe.” “It shook our house twice,” Shawn Dunlap, who lives in neighboring Nederland, told NBC News. “It was just like a bomb going off.” Twitter user @souljaslim52 put it another way: “shit blew tf up.” According to a statement from TPC Group, the incident occurred at 1:00am local time. The company said it “cannot speak to the cause of the incident or the extent of damage.” The Port Neches Police Department, in a statement posted to Facebook, said, “There’s extensive damage throughout the city.”Area residents reported damaged homes, with some suffering shattered glass and blown-off doors. Three workers at the plant also suffered minor injuries, the company said.”Throughout the morning more booms could be heard in the area as firefighters attempted to control the blaze,” reported Beaumont’s KBMT.Local ABC affiliate KTRK reported that the chemical burning is butadiene, which the EPA classifies as carcinogenic.Environment Texas’s Fraser, in her statement, pointed to the plant’s history as cause for particular concern. “This facility has a track record of violating the Clean Air Act,” she said, “with five other illegal emissions events just in 2019, emitting carcinogenic 1,3 butadiene and other chemicals, and a history of community complaints.” “According to the EPA, the TPC Plant has been in non-compliance 12 separate quarters over the last 3 years, and has received 7 formal enforcement actions over the last 5 years. According to the TCEQ, the chemical of most concern is butadiene,” Fraser continued. “The TPC plant emitted 61,379 pounds of butadiene in 2018. Butadiene is a known human carcinogen.”

Second Explosion Seen At Burning TPC Plant In Texas – A second minor explosion erupted at the TPC Group chemicals plant that is ablaze after a fire broke out early Wednesday, the Grove Fire Department told Bloomberg.

Texas chemical fire rages for second day, thousands evacuated – Reuters (Reuters) – A major fire at a Texas petrochemical plant continued to burn for a second day on Thursday, with the 60,000 people forced to evacuate still uncertain as to whether they could return home in time to celebrate the Thanksgiving holiday. The fiery blast inside a distillation column at the Port Neches, Texas, TPC Group facility on Wednesday injured three workers, blew locked doors off their hinges and spewed a plume of toxic chemicals for miles (kilometers). The plant manufactures petrochemicals used to make rubber and resins, and the volatile organic compounds in the explosion’s smoke can lead to eye, nose and throat irritation, shortness of breath, headaches and nausea, the pollution regulator Texas Commission on Environmental Quality (TCEQ) said. No impact to water was reported. The plant, 90 miles (145 km) east of Houston, has a long history of environmental violations and has been out of compliance with federal clean air laws for years, according to the Texas Tribune and state records; it was also declared a high priority violator by the Environmental Protection Agency. State agencies are monitoring air quality. Police are patrolling the evacuated communities to prevent looting. TPC spokesperson Sara Cronin said that it was uncertain when the fire would be extinguished or the chemicals burned off but pointed the public to the company’s emergency response website at www.portnechesresponse.com. The explosion was the fourth major petrochemical fire in the region this year.

Pipeline owner sues Texas over flaring – US midstream operator Williams is suing Texas regulators over an exemption it says will give oil producers a “blank check” to flare off associated natural gas whenever doing so would be profitable. The Texas Railroad Commission, which regulates oil and gas in the state, this summer gave US independent EXCO Resources a two-year exemption from the state’s prohibition on flaring for 130 wells in the Eagle Ford basin. The company said it would have to shut in the wells, reducing recovery of oil, if it were unable to flare the gas. But Williams, which owns a gathering system that could service the wells by turning an existing valve, says regulators were incorrect that flaring is necessary. The pipeline operator, in a lawsuit filed last week, says the decision effectively guarantees an exemption to any operator requesting one and marks a shift from a state policy to ban flaring unless an operator shows it is a necessity. “This shift eviscerates the no-flaring rule and policy by effectively giving operators total discretion in deciding whether and how much to flare,” Williams said in the lawsuit. Texas producers this year have been flaring record amounts of natural gas, as a shale oil boom generated massive amounts of associated gas with too few pipelines to carry it away. Flaring and venting in the Permian Basin, which straddles Texas and New Mexico, reached an all-time high of 661mn cf/d in the second quarter of 2019, according to the consulting company Rystad Energy. Williams had a gathering contract with the previous owner of the wells at issue in the lawsuit. But that agreement terminated in 2017, and EXCO and Williams have yet to reach a gathering agreement for the wells. The wells’ owners said the pipeline gathering rates were uneconomic, resulting in the need to flare. Texas Railroad Commission member Ryan Sitton, in explaining his vote to support the exemption, said he did not want to “artificially force” the producer into a pipeline contract to avoid flaring gas worth $10,000/d when the wells at issue are producing $500,000/d of crude.

New study blames some fracking practices for Eagle Ford earthquakes – Earthquakes caused by hydraulic fracturing are more common in the Eagle Ford Shale of South Texas than previously thought, a new study reveals. Researchers with Miami University in Oxford, Ohio and the U.S. Geological Survey analyzed more than 2,800 earthquakes recorded in the South Texas shale play between 2014 and 2018. In a recently published study, the researchers revealed that more than 2,400 of those earthquakes could be linked to hydraulic fracturing activity and that certain industry practices were more likely to trigger them. Earthquakes were twice as likely to happen when operators simultaneously injected fluids into multiple nearby wells compared to when they injected fluids into multiple wells one at a time, the researchers determined. Out of the 2,823 earthquakes analyzed in the study, only 121 of them registered above a magnitude 2.0 on the Richter Scale, which would have been strong enough to be felt by some close to the epicenter.The Miami University study was released a month after researchers with the University of Texas at Austin published a study that linked hydraulic fracturing to some earthquakes in the Permian Basin of West Texas.Previous studies blamed the shale play earthquakes on an industry practice of injecting oil field wastewater deep underground. Those studies prompted the Railroad Commission of Texas, the state agency that regulates the oil and natural gas industry, to enact stricter rules and regulations for saltwater disposal wells.Favoring regulations based on science, Texas Oil & Gas Association President Todd Staples said his organization created a committee that allows members to work with seismologists, geologists and regulators to address the issue of earthquakes.“The oil and natural gas industry is actively working to mitigate impact through recommended practices including pre-completion risk assessment, proper monitoring, and mitigation protocols,” Staples said in a statement.

World Cracked Open: When Fracking Came to Town – “When I first bought my property, it was a dream come true, Sharon Wilson told WhoWhatWhy. “The air was beautiful and clean when we first moved out there and the sky was this gorgeous color of blue. I mean blue, not this washed out blue you see in the cities, but this vivid, electric blue.” What she didn’t realize four decades ago was that she was establishing her home next door to one of the nation’s first and most widespread experiments in fracking – cracking open the Barnett Shale. She didn’t know anything about mineral rights or threats to the environment. But when the trucks started moving in and the pollution started filling the air, she learned firsthand. Experts say the fracking process releases both methane – a greenhouse gas – and a multitude of hydrocarbons into the air. Hydrocarbons oxidize in the atmosphere in the presence of nitrogen oxide, forming ozone, also a greenhouse gas. Benzene, one of the hydrocarbons released, is a known carcinogen. In addition to emissions that come directly from fracking, scientists have evaluated indirect emissions from trucking huge amounts of water to sites, and transporting huge amounts of hydrocarbons away from the sites,” Gunnar Schade, a professor of geosciences at Texas A&M, explained. According to a study published in the Oxford Research Encyclopedia of Global Public Health, fracking has been linked to increased heart problems, early births, high-risk pregnancy, certain types of cancer, asthma, migraine headaches, skin disorders, fatigue, and nasal and sinus symptoms. In Wise County, Wilson watched as fracking put an end to her quiet country lifestyle. “There was diesel from the rigs and soot from the flaring and horrible emissions. Eventually, my air turned brown and my water turned black.” “The polluted air was the worst,” said Wilson. “Because you can get clean water somewhere – it’s not ideal, but you can get it. You can’t get air.” This story is not unique. Wilson said she has corresponded with hundreds of people with similar stories, all having their lifestyles eroded by fracking. “You have this deep connection and caring for each other because you have gone through something traumatic. Because I’ve lived through it, I can help other people,” said Wilson. “I know exactly what it feels like to have your American dream, and then realize that your paradigm of America was false.”

Hill Country Landowners Say Kinder Morgan Is Lowballing Them. Special Courts Are Agreeing. – Kay Pence owns a ranch in the Hill Country town of Fredericksburg. About a year ago, she got a call from the pipeline company Kinder Morgan. The caller told her the company planned to run a section of its 430-mile Permian Highway natural gas pipeline through her property. Pence didn’t like that.“This is going to sound overreactive, but you felt violated,” Pence says. “They have access to your property, and there was nothing you could do.”In Texas, pipeline companies have the power of eminent domain. That means they can take private land even if the landowner doesn’t want to sell. The company only needs to pay a fair price. Companies say this allows them to build the infrastructure necessary to move oil and gas. “You have property in the Hill Country that is fifth generation and their property is being cut in half,” Pence says. “Their property is ruined.” Now, as building starts on the pipeline, some landowners are rejecting Kinder Morgan’s offers and winning awards vastly greater through a legal process called a condemnation hearing. It’s a unique proceeding where three local volunteers appointed by a district judge hear arguments about the land’s value and make a decision.In Pence’s case, an offer of $45,000 for a 3-acre strip of land turned into an award of $1.2 million after the hearing. In Blanco County, a landowner who was told by Kinder Morgan that his land was worth $20,000 was awarded $1.3 million. Another landowner in Gillespie County turned an offer of $85,000 into an $11 million award.Kinder Morgan has appealed some of the awards. But pipeline opponents are pointing to the results of these hearings as evidence the company is undervaluing Hill Country land. Some also see this as proof the company is messing with the wrong small towns.

Seaway Sets Open Season for Expansion – Seaway Crude Pipeline Co. LLC on Monday unveiled plans for a binding open season for customers to commit to expansion capacity on its pipeline extending from Cushing, Okla., to the Texas Gulf Coast. According to a written statement from the 50/50 joint venture (JV) owned by Enterprise Products Partners L.P. and Enbridge Inc., the open season will run from 9 a.m. Central time on Dec. 16, 2019, to 5 p.m. Central on Feb. 14, 2020. Seaway links to an integrated network of pipelines, storage facilities and export terminals along the Gulf Coast and connects to every refinery in the Houston, Freeport, Texas City and Beaumont/Port Arthur areas, the JV noted. The expansion – announced in October – reportedly would add 200,000 barrels per day (bpd) or more of light crude capacity to the Seaway system, primarily through pump upgrades. Moreover, the JV stated the expansion could include further quality enhancements to segregate heavy and light crude oil shipments. Seaway noted that up to 100,000 bpd of initial light crude expansion capacity could be available as soon as the second half of 2020, with the remainder of the expansion implemented in 2022. The JV, which will determine the final capacity for committed and uncommitted service during the open season, added that its fee schedule starts at 99 cents per barrel for light crude transportation from Cushing. Factors affecting fees include volume, destination and term.

OKLAHOMA: ‘Flowback’ – a new cause of oil-driven earthquakes? — Two earthquakes that shook Oklahoma on Sunday evening may be part of a new trend – shaking that’s neither natural, linked to oil field disposal nor linked to hydraulic fracturing.

Evers signs bill making it a felony to trespass on pipelines (AP) – Gov. Tony Evers has signed into law a bipartisan proposal making it a felony to trespass or damage oil or gas pipelines in Wisconsin. Evers signed the measure Wednesday, despite complaints from opponents that it would violate free speech rights and disproportionately affect American Indians whose lands are often affected by pipeline projects. Evers says even though he signed the measure, he wanted to reaffirm that tribal nations “deserve to have a voice in the policies and legislation that affect indigenous persons and our state.” The new law builds upon a 2015 state law that made it a felony to intentionally trespass or cause damage to the property of an energy provider. The bill Evers signed expands the definition of energy provider to include oil and gas pipelines, renewable fuel, and chemical and water infrastructure. The Wisconsin measure has broad support from both Republican and Democratic lawmakers and numerous organizations..

Pipeline protester arrested during northwestern Minnesota incident – – An environmental protest on Monday at an Enbridge Energy terminal in northwestern Minnesota resulted in one arrest. Sara-Beth Anderson, 21 of Minneapolis, was arrested on the charge of trespassing on a critical public service facility. The protesters tied three large poles together to form a tripod structure. Anderson then suspended herself from the top of it, hanging above the ground. Clearwater County Sheriff Derin Halverson said they first received word of the Clearbrook protest around 7:30 a.m. Monday. He said it continued until approximately noon. A press release from Enbridge indicated although the demonstration delayed some employees from arriving to work, “the terminal continued to safely operate without interruption.” Anderson released a statement before her arrest, explaining her reasons for protesting in front of the oil pipeline terminal. “I am a diver and love the ocean with all of my heart. The destruction of the sacred is happening because of these terrible decisions to keep extracting, to keep harming the earth despite what climate science has told the world’s leaders,” her statement said in part. Although Anderson eventually lowered herself to the ground, it was not before law enforcement called in assistance from the Beltrami County sheriff’s office to help remove her, Halverson said. Tara Houska, a member of the environmental organization Ginew, was one of the people at the protest. Houska said Anderson lowered herself when officials began cutting through the poles of the tripod. Houska said although there was an ambulance on scene, Anderson likely could have been injured from the fall. “It was a very tense moment … It was incredibly dangerous,” Houska said of the officials’ decision to cut through the poles. “That was the reason she lowered herself; she felt unsafe.”

Keystone XL: police discussed stopping anti-pipeline activists ‘by any means’ – US law enforcement officials preparing for fresh Keystone XL pipeline protests have privately discussed tactics to stop activists “by any means” and have labeled demonstrators potential “domestic terrorism” threats, records reveal. Internal government documents seen by the Guardian show that police and local authorities in Montana and the surrounding region have been preparing a coordinated response in the event of a new wave of protests opposing the controversial Keystone XL tar sands pipeline, which would carry crude oil from Canada to Montana, South Dakota and Nebraska. Civil rights organizations say the documents raise concerns that law enforcement is preparing to launch an even more brutal and aggressive response than the police tactics utilized during the 2016 Standing Rock movement, which drew thousands of indigenous and environmental activistsopposed to the construction of the Dakota Access pipeline (DAPL) to North Dakota. At Standing Rock, law enforcement organized repeated rounds of mass arrests and filed a wide array of serious charges in local and federal courts against activists. Police also deployed water cannons, teargas grenades, bean bag rounds and other weapons, causing serious injuries toprotesters. The documents are mostly emails from 2017 and 2018 between local and federal authorities discussing possible Keystone protests. They show that police officials are anticipating construction will spark a sustained resistance campaign akin to the one at Standing Rock and that police are considering closing public lands near the pipeline project. The new records have come to light as the Keystone pipeline project hasovercome numerous legal hurdles with help from the Trump administration, and as the project’s owner, TC Energy (formerly TransCanada), is moving forward with initial construction efforts. Among the major revelations in the documents:

1. Officials at a 2017 law enforcement briefing on potential Keystone XL protests said one key tactic would be to “initially deny access to the property by protestors and keep them as far away [from] the contested locations as possible by any means”, according to an email summary from a US army corps of engineers security manager in Nebraska in July 2017.
2. Officials with the Bureau of Land Management (BLM) said in 2017 that the bureau had 10 armed officers in Montana and was prepared to “work with local [law enforcement] to deny access to federal property”. In 2018, army corps officials were also in discussions with the Montana disaster and emergency services department to discuss ways to “close access” to lands near the pipeline route, including areas typically open for hunting and other activities.
3. A “joint terrorism task force” involving the US attorney’s office and other agencies, along with federal “counterterrorism” officials, said it was prepared to assist in the response to protests and a “critical incident response team” would be available for “domestic terrorism or threats to critical infrastructure”. Authorities have also pre-emptively discussed specific potential felony charges that protesters could face, noting that a “civil disorder” statute was used to prosecute activists at Standing Rock.
4. Authorities have been preparing for possible protests in the Fort Peck area,home to a Native American reservation and indigenous people opposing the project.

“There is a lot of muscle behind this effort to make sure that Keystone is constructed,” said Alex Rate, legal director of the American Civil Liberties Union of Montana, which obtained the documents through records act requests and shared them with the Guardian. “There are historically marginalized communities, primarily indigenous folks, who have grave concerns about the impact of this pipeline on their sovereignty, their resources, their religion and culture. They have a first amendment right to assemble and make their viewpoints heard.”

Oil giant confirms sale of its Colorado oil and gas acreage to Crestone Peak Resources – One of the biggest international oil giants is selling its oil and gas lease rights at the northeast edge of the metro area in a deal poised to make Denver-basedCrestone Peak Resources much bigger. Houston-based ConocoPhillips Co. said Tuesday that it has negotiated the deal.“We can confirm we are working towards a transaction with Crestone Peak Resources to sell our Niobrara assets and will continue to operate the assets until a transaction is complete. Beyond this, we won’t comment,” said Rachel David, a spokeswoman for ConocoPhillips’ Lower 48 oil and gas business. Niobrara refers to geological formation that’s most sought after for unconventional oil and gas development in northeast Colorado.Financial terms of the deal have not been disclosed.Crestone Peak revealed Monday that it had struck a deal to buy 97,000 acres of oil and gas lease rights in Adams and Arapahoe counties and in the city of Aurora, nearly tripling the company’s size in the southern Denver-Julesburg Basin.The deal includes the Lowry Range, a former military bombing range east of Aurora, and some ConocoPhillips acreage in northern Douglas and Elbert counties, too.The company is going through due diligence on the purchase and expects the acquisition to close in early 2020, it said.Crestone Peak would have a total of 148,000 acres on which to drill and operate oil and gas wells.Crestone Peak didn’t identify the seller of the territory it’s acquiring. It mentioned that the Aurora acreage it’s buying is covered by an operator’s agreement with the city, something only a couple companies have in place.ConocoPhillips’ online profile of its Colorado operations said it holds about 100,000 acres of leased rights, and that it employs about 160 people based from an office in the town of Watkins. The company, and its predecessor Burlington Resources Oil and Gas, have operated in the area for years. ConocoPhillips acquired Burlington Resources Oil and Gas in 2006.

Fracking workers exposed to dangerous amounts of benzene, study says – Some workers at oil and gas sites where fracking occurs are routinely exposed to high levels of benzene, a colorless gas that can cause cancer, according to a study by the National Institute for Occupational Safety and Health.The agency, which is part of the Centers for Disease Control and Prevention, recommends that people limit their benzene exposure to an average of 0.1 of a part per million during their shift. But when NIOSH researchers measured the amount of airborne benzene that oil and gas workers were exposed to when they opened hatches atop tanks at well sites, 15 out of 17 samples were over that amount.Workers must open these hatches to inspect the contents of these tanks, which could include oil, waste water or chemicals used in high-volume hydraulic fracturing, or fracking. The real-time readings taken by researchers show that benzene levels at the wells “reached concentrations that, depending on the length of exposure, potentially pose health risks for workers,” the researchers reported in the Journal of Occupational and Environmental Hygiene. Researchers visited six oil and gas sites in Colorado and Wyoming in the spring and summer of 2013, spending about two days at each site. They outfitted 16 workers at flowback tanks with small devices attached to their shirt collars that sampled the air throughout the day. The key measurements were taken when these workers were standing above the hatch.Over the course of a 12-hour shift, workers open the hatches and stand above them one to four times per hour, breathing in the fumes for two to five minutes each time. This could add up to dangerous levels of exposure to various volatile organic compounds from the chemicals used in fracking, or from the hydrocarbons themselves.Benzene, a component of crude oil, “is of major concern because it can be acutely toxic to the nervous system, liver, and kidneys at high concentrations,” the study authors wrote. As the CDC explains, benzene interferes with the normal workings of cells.

State Finds Elevated Benzene Level at Fracking Site Near Greeley School – For years, Greeley’s Bella Romero Academy has served as a rallying cry for anti-fracking activists who say the elementary school, located about 1,200 feet from an oil and gas site where drilling operations began in 2018, had become a symbol of everything wrong with Colorado’s neighborhood fracking boom. Now, state officials have confirmed the results of air-monitoring tests that activists say heighten their concerns about the site’s potential health hazards.A mobile air-monitoring unit deployed to Bella Romero earlier this month recorded benzene levels at 10.24 parts per billion (ppb), exceeding the federal short-term health guideline of 9 ppb, the Colorado Department of Public Health and Environment said today, November 25.”The state health department does not believe people were harmed by this single elevated measurement but is taking swift action to investigate the cause of the elevated level and conduct additional monitoring,” read the department’s press release, noting that the mobile lab recorded only one elevated benzene reading in an 85-day test period. The Bella Romero air-monitoring tests come as the state ramps up its efforts to evaluate the health impacts of oil and gas activity following therelease of a long-awaited air-quality modeling study last month. That report found the potential for short-term effects from drilling sites at distances up to 2,000 feet, well in excess of current statewide “setback” minimums, and specifically identified benzene, a toxic chemical that can cause a wide variety of short- and long-term health problems, as a top concern.Following last week’s test results, Colorado health officials say they’re “conducting an investigation of nearby oil and gas activities on the day of the high reading.” The state’s air-monitoring unit will return to Bella Romero to conduct additional tests, and will report any additional elevated benzene measurements “as soon as data can be validated.”

Shale Slowdown Continues As Oil Rig Count Falls Again – The US oil and gas rig count continued to fall this week, according to Baker Hughes, falling by 1 rig for the week.For oil rigs, this week marks the thirteenth decrease out of the last fifteen weeks, falling 102 rigs in that timeframe.The total oil and gas rig count now stands at 802, or 274 down from this time last year.The total number of active oil rigs in the United States decreased by 3 according to the report, reaching 668. The number of active gas rigs increased by 2, settling at 131 for the second week. By state, Texas has seen a drop of 126 year on year, while Oklahoma sunk by 94 to hit 51 rigs.Even though the number of oil rigs has declined by 209 this year alone, production has grown from 11.7 million bpd at the beginning of the year to an all-time high of12.9 million bpd – another brand new high for the United States.Oil prices were down on Friday ahead of the data, with WTI at 1:42 pm at $57.86 per barrel (-$0.55), which is flat from last week. Brent was trading down at $62.76 (-$0.45), which is $0.50 under last week’s figures.Canada’s overall rig count decreased this week, with oil and gas rigs falling by 11, after last week’s 3-rig increase. Oil and gas rigs in Canada now stand at 126, down 73 year on year. At 7 minutes past the hour, WTI was trading at $57.85 and Brent was trading at $63.35.

Dunn County produced water spill far exceeds initial report – A pipeline that leaked produced water in Dunn County last month released far more of the brine than originally estimated, a state agency said Friday, Nov. 22. The North Dakota Department of Environmental Quality announced that it had received an updated estimate on a Marathon Oil produced water spill about a mile and a half northeast of Manning on Oct. 2. According to an investigation into the incident, 32,826 barrels, or 1,378,692 gallons, were discharged. Marathon’s initial estimates indicated that roughly 500 barrels, or 21,000 gallons, were discharged. “We got out to the site and when we looked at it, everyone kind of knew it’d be bigger than (Marathon) initially estimated,” Bill Suess, spill investigation program manager for the state agency, told The Press on Friday. “They based their calculations on the surface impact they saw at the time, but with just the concentration we had seen in the stock pond, we knew it was going to be bigger – we just didn’t know how big.” As for the discrepancy in Marathon Oil’s estimates for the volume of the spill, Suess claims that, given that the pipeline was buried and that produced water spills are often harder to detect than crude oil, since most of the effects are subsurface, there is no way that Marathon could have been definitive that early in the investigation. The spill site is near a small creek flowing into the Knife River about a mile downstream of a stock pond. No impacts have been detected in the Knife River, the Department of Environmental Quality said in a news release. Produced water is a toxic and often hard to detect natural byproduct of crude oil extraction. “I’d rather deal with a crude oil spill on land, than a salt water spill,” Suess said.

Newsom freezes new fracking permits, but oil drilling permits outpace 2018 – The FracTracker Alliance and Consumer Watchdog unveiled a new website on November 19 to continually map and update the number of oil and gas wells permitted by the Newsom Administration: http://www.NewsomWellWatch.com. “The pace of permitting overall is still on track to beat the total number of permits issued during Brown’s final year in office (2018). The number of drilling and rework permits issued in the first ten months of 2019 through November 4 total 4,049. In the same period of 2018, under Governor Brown, the total was 3,723,” the groups stated. On November 19, Governor Gavin Newsom froze the approval of new fracking permits as a scientific study of fracking is conducted, but the total number of permits approved under the Newsom Administration still outpace those approved under Jerry Brown in 2018.State oil and gas regulators have not issued a new permit for fracking or acidizing in California since mid-July and have slowed the overall rate of permitting oil wells. Yet public interest groups Consumer Watchdog and FracTracker Alliance point out that regulators have granted oil permits at a pace that is 8.8% greater in the first ten months of 2019 than in the same period last year under Governor Jerry Brown, based on an analysis of state data.Three actions were announced by Newsom and the Department of Conservation’s Department of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR):

1. A halt of approvals of new oil extraction wells that use high-pressure steam to break oil formations below the ground, a process linked to recent oil leaks in Kern County.

2. Rules for public health and safety protections near oil and gas extraction facilities will be updated and strengthened.

3. Pending applications to conduct hydraulic fracturing and other well stimulation practices will be independently reviewed.

“These are necessary steps to strengthen oversight of oil and gas extraction as we phase out our dependence on fossil fuels and focus on clean energy sources,” said Governor Newsom. “This transition cannot happen overnight; it must advance in a deliberate way to protect people, our environment, and our economy.”

Fracking Blows Up Investors Again- Phase 2 Of The Great American Shale Oil & Gas Bust – Wolf Richter – In 2019 through third quarter, 32 oil and gas drillers have filed for bankruptcy, according to Haynes and Boone. Since the end of September, a gaggle of other oil and gas drillers have filed for bankruptcy, including last Monday, natural gas producer Approach Resources. This pushed the total number of bankruptcy filings of oil and gas drillers since the beginning of 2015 to over 200. Other drillers, such as Chesapeake Energy, are jostling for position at the filing counter. Chesapeake has been burning cash ever since it started fracking. To feed its cash-burn machine, it has borrowed large amounts and has been buckling under its debt for years, selling assets to raise cash and keep drilling for another day. But its debt is still nearly $10 billion. Its shares closed on Friday at 59 cents. On November 5, in an SEC filing, it warned of its own demise unless oil and gas prices surge into the sky asap: “If continued depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant, our ability to comply with the leverage ratio covenant during the next 12 months will be adversely affected which raises substantial doubt about our ability to continue as a going concern.” Other exploration and production (E&P) companies have seen their shares get crushed as reality began to re-set in. Whiting Petroleum shares [WLL] had spiked to $370 in August 2014, when the oil bust was setting in. By the trough of Phase 1 of the oil bust, in February 2016, its shares had plunged to $14. Then new money started flowing into the sector, and its shares rallied to $55 by August last year. Then Phase 2 of the oil bust set in, and after some disastrous earnings reports, its shares closed on Friday at $5.34. In June 2018, Whiting sold $1 billion of callable senior unsecured bonds, with a coupon of 6.625%. The next call date is in October 2025. Through September 2018, the notes were trading at 103-104 cents on the dollar. Then Phase 2 of the oil bust took its toll. On Friday, the bonds closed at 57.8 cents on the dollar, at a yield of 18.375% (via FINRA’s TRACE): The S&P U.S. High Yield Corporate Distressed Bond Index tracks bonds that trade at a yield that is at least 10 percentage points higher than the equivalent Treasury yield (“Option Adjusted Spread” of 1,000 basis points). Chesapeake’s bond illustrated above, trading at 21%, and Whiting’s bond trading at 18.375% qualify for this index with flying colors. Of the 182 constituents in the index, many are energy bonds. Since November 2018, the index has plunged by 28%:

Icahn to Seek Control of Oxy Board— Carl Icahn plans to nominate a slate of 10 directors in an attempt to seize control of the board of U.S. oil and gas producer Occidental Petroleum Corp., according to people familiar with the matter. The billionaire investor, who owns a stake in the company valued at about $1 billion, plans to make his move before the Nov. 29 deadline for nominations, said the people, who asked not to be identified because the matter is private. A representative for Icahn declined to comment, while a representative for Occidental wasn’t immediately available for comment. Icahn has been a vocal critic of the company — and Chief Executive Officer Vicki Hollub in particular — over its $37 billion takeover of Anadarko Petroleum Corp. completed in August. He has attacked the lack of a shareholder vote and the pricey $10 billion financing the company obtained from Warren Buffett to get the deal done. Occidental’s stock has slumped 41% since its interest in Anadarko was first reported in April, wiping out about $15 billion of shareholder value. The company is the seventh-worst performer in the S&P 500 index this year. In a Nov. 8 letter explaining his decision to launch a proxy fight, Icahn said the merger made “no sense” to anyone other than Hollub and certain members of the board, who he said “grossly overpaid” for Anadarko to avoid becoming a takeover target themselves. Icahn has argued Occidental should launch a strategic review, including a potential sale of the combined company, once the Anadarko deal was completed. “I believe it has become apparent – perhaps to everyone except Hollub and her board – that OXY’s massive Anadarko gamble is seriously jeopardizing the company’s future value,” Icahn said in the letter, referring to Occidental by its stock symbol. Houston-based Occidental said this month it plans to cut spending by 40% next year and accelerate asset sales in order to pay down debt and protect its dividend, both of which Hollub described as her “top priorities.” The company said it’s on track to exceed the upper end of its $10 billion to $15 billion asset plan by the middle of 2020, six months ahead of schedule.

Global oil consumption remains sluggish – (Reuters) – Global oil consumption has apparently accelerated since mid-year as lower prices filter through the supply chain, increasing demand and avoiding a big increase in inventories. But all may not be as it seems. Much of the growth has come from China, where reported consumption is rising at rates inconsistent with the country’s slumping auto sales and slowing economy. China’s fuel distributors and consumers have most likely taken advantage of lower prices to boost the amount of products held at fuel depots and in end-user tanks before prices rise again. If that is the case, much of the increase can be accounted for by a one-time shift in the location of stocks rather than a sustainable increase in consumption and it will likely unwind if prices rise again next year (https://tmsnrt.rs/2XP8U7d). Consumption in the rest of the world remains sluggish, according to the latest government figures reported to the Joint Organisations Data Initiative (JODI). The world’s top 18 consuming countries, each using more than 1 million barrels per day, reported a rise in consumption of 1.6% in the three months from June to August compared with the same period a year earlier. That was the fastest rate since the start of the year and a marked turnaround from the small year-on-year decline in the three months between March and May. But China’s reported surge in consumption of almost 13% year-on-year in June-August — among the fastest rates of the last eight years — is flattering the figures and hard to square with the country’s economic backdrop. Excluding China, consumption in the other top-17 countries was down 0.9% in the three months from June to August compared with a year ago, an improvement on a few months ago, but still weak. The flat or falling consumption trend in the rest of the world is consistent with the decline in global freight movements and the decline in global manufacturing activity reported in business surveys.

Freezing in the dark could happen in that place that doesn’t believe in our petroleum – “Let them freeze in the dark” is an old saying that got a lot of play in late November, as famously anti-pipeline, anti-oil, pro-equalization Quebec said on Nov. 21 it was within days of running out of propane due to the Canadian National Railway strike. A few days later, it was announced a train was expected by Nov. 25 which would tide the province over for a few more days. On Nov. 24, Pembina announced it was essentially coming to the rescue, stating in a press release, “Pembina is preparing unit trains, comprising up to 105 cars, with propane sourced from Western Canada, by Canadian producers at Pembina’s Redwater, Alberta, facility. Pembina’s facility is the only one in Canada capable of amassing these quantities of propane and building such unit trains.” Where do you use propane? Basically, wherever you need a flame and there is a lack of natural gas infrastructure. In other words, no pipelines. This includes remote communities, farmers drying grain, your barbecue in the backyard or the one you take to the lake. A few years ago, my dad converted his house on the farm from fuel oil (essentially diesel) to propane heat, resulting in a tremendous cost savings.But I’ve also learned that sometimes propane is used to supplement natural gas supplies, where either there’s insufficient pressure or insufficient energy from the natural gas by itself. In these cases, propane is used in a mixed-fuel scenario.There’s not a lot of pipe moving propane to Central Canada. There once was a dedicated pipeline which carried propane from Alberta to central Canada, the Cochin Pipeline. Kinder Morgan owns it, but is in the process of selling it to Pembina. In March 2014, the direction of flow on the segment of the Cochin Pipeline from Kankakee, Illinois, to Fort Saskatchewan was reversed to transport condensate westbound. The eastern portion of that pipeline system now delivers ethane from Ohio to Windsor. Enbridge’s Line 1 takes NLGs to Superior, Wisc., and then its Line 5 takes NGLs from there to Sarnia, Ont. These days, most propane, at least from Saskatchewan, is shipped by rail, with the rest by truck. A lot goes through the rail terminal at Northgate, on the U.S. border. This whole supposed crisis in Quebec leaves some interesting questions. How does a province run so dangerously low of a critical fuel supply like propane? Was it the increased consumption by farmers trying to dry grain there, as well as on the Prairies? Or was there some sort of market failure? And if it was, how and when did the government of Quebec step in? Why should governments have to ration supplies?

Unpaid Bills in Mexico Oil Patch Add to Pemex Troubles – Companies that help keep Mexico’s faltering oil wells operating are waiting months to get paid and the debts are building up, complicating efforts to revive an industry whose production has plunged by half since 2004. Petroleos Mexicanos, facing pressure from the government to slow spending, has delayed some payments to contractors for as long as seven months. The result: goods and services are becoming scarcer and contractors are finding it tougher to secure financing of their own. “Investors and credit ratings agencies don’t have confidence in what Pemex is doing in the sector,” said Sergio Suarez Toriello, director of strategy at Marinsa de Mexico, which does contract work for Pemex. “So this is the biggest risk for suppliers: Getting access to resources and financing for working capital and investment.” Mexican President Andres Manuel Lopez Obrador is pushing to end the year with a government-wide surplus, and that effort has slowed payments from Pemex, people familiar with the matter told Bloomberg. The president has previously pledged to rescue Pemex from its debilitating debt and long-term production declines. Pemex faces about $100 billion in debt, the most of any major oil producer. Pemex owes Marinsa, which provides marine services for Mexico’s offshore drilling platforms, 155 million pesos ($8 million), according to Suarez Toriello. The company has been waiting seven months for about 47 million pesos of that debt from logistics contracts, he said. The remaining amount has been in arrears for about three to four months. Marinsa isn’t alone. Another international service supplier with an established presence in Mexico is facing delays of more than three months on its payments, said a person familiar with the finances who asked not to be named because the information is private.

Exclusive: Facing U.S. sanctions, Venezuela offers suppliers payment in Chinese yuan – sources – (Reuters) – Venezuela’s government and its oil company PDVSA have offered to pay suppliers and contractors into accounts in China using the yuan currency, five people familiar with the matter said. The move made in recent months is the latest example of how Caracas has sought new ways of making international payments since sweeping sanctions by Washington, intended to force out socialist President Nicolas Maduro, cut off the country’s access to the U.S. financial system. Officials have made the proposal verbally to at least four companies that provide services to the public sector, said the people, including two government officials and three sources from private companies in the financial or oil sectors. The individuals declined to disclose which companies have been approached. The companies are evaluating the proposal, the sources said. Reuters could not determine whether any such payments in yuan have been made. China’s central bank, the Peoples’ Bank of China, did not respond to a faxed request for comment. PDVSA, Venezuela’s central bank, and Venezuela’s information ministry did not respond to requests for comment. Venezuelan public entities have traditionally paid private sector partners in the local bolivar currency or U.S. dollars. But hyperinflation and U.S. sanctions, which prohibit American companies from doing business with Venezuela’s public sector, are complicating those methods.

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