Written by rjs, MarketWatch 666
Here are some more selected news articles for the week ending 03 April 2021. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening or Tueday morning.
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Line 5: Tribe seeks cultural property protection — The discovery of a potential archaeological site in the Straits of Mackinac last fall has opened the door for a Michigan tribe to pursue a new, longshot legal strategy to stop the planned Line 5 pipeline tunnel project.The Little Traverse Bay Bands of Odawa Indians passed a resolution in January instructing its historic preservation office to begin compiling research for an application to classify the straits as a Traditional Cultural Property, a rarely used federal designation under the National Register of Historic Places.The status is designed to preserve places associated with often-intangible elements of a local community’s cultural history – in this case, a set of boulders arranged in apparently deliberate lines and semi-circles that might be remnants of a 10,000-year-old caribou-hunting culture.The designation would add fresh uncertainty to the future of Enbridge’s Line 5 pipeline, which already faces an order from Michigan Gov. Gretchen Whitmer to shut down by next month. Tribal leaders are hopeful their request will be considered under Interior Secretary Deb Haaland, the first Native American ever to hold the position, but similar attempts by opponents of other pipeline projects, including the Dakota Access, have been unsuccessful.”This opens the door for us,” Andrea Pierce said of her tribe’s resolution. “It shows that we’re speaking out as our own sovereign nation. We need to make our voices heard in this political arena.” Enbridge’s Line 5 has crossed along the bottom of the straits since 1953, carrying crude oil and natural gas liquids from Superior, Wisconsin, to Sarnia, Ontario. Concerns about the safety of Line 5 in the straits were heightened in 2010 after a spill from Enbridge’s Line 6B pumped up to 1 million gallons of crude oil into Michigan’s Kalamazoo River.”That would not be acceptable in the Straits of Mackinac,” said Pierce, whose tribe has relied on the region’s freshwater resources for at least 1,500 years. “And that’s where I’m at. I have to protect the straits as best as I can.”
Sarnia union leader warns closing Line 5 pipeline will ‘kill’ his hometown – Sarnia union leader Scott Archer had a stark warning this week for Canada’s federal politicians. “Shutting down Line 5 will in affect kill my hometown … and many more places like it in Canada and the U.S.,” the business manager for Local 663 of the pipefitters’ union told a special Parliamentary committee on the economic relationship between Canada and U.S. “This is not an exaggeration,” he added during the online hearing. “It’s cold, hard fact.” Archer, along with Sarnia Mayor Mike Bradley and Andrew Pilat from the Sarnia Construction Association, spoke on the final day of committee hearings on a threat by Michigan’s governor to shut down the Line 5 pipeline in May. The 68-year-old pipeline – owned by Calgary-based energy giant Enbridge – carries western oil and natural gas liquids from Superior, Wis., through Michigan to Sarnia and supplies refineries and propane distribution in Ontario, Quebec and the U.S. Midwest. Michigan Gov. Gretchen Whitmer has revoked an easement allowing the pipeline to run along the bottom of the Straits of Mackinac over concerns about the risk of spills into the Great Lakes, but Enbridge is challenging the order in U.S. federal court and says it will continue operating the pipeline. The company and state are scheduled to begin court-ordered mediation April 16, and Canadian officials have raised the possibility of using a 1977 pipeline treaty with the U.S. to keep Line 5 operating.The Sarnia area is home to three of Ontario’s four refineries, as well as chemical plants served by Line 5 and other pipelines.
Is the Line 5 tunnel a bridge to Michigan’s energy future or a bad deal? As Canadian officials lobbied a Michigan Senate committee in March to keep the Line 5 pipeline open, Sen. Winnie Brinks grew frustrated with a conversation that, up to that point, had focused mainly on the immediate economic and safety implications of a possible shutdown. “We are at a moment of inflection on our energy future,” said Brinks, D-Grand Rapids, and will soon have no choice but to stop burning oil and other fossil fuels to power our vehicles and homes. Additional investment in the pipeline, she said, “does not seem to be the most enlightened way to go forward.” The Great Lakes region is frequently touted as one of the most climate-resilient places in the U.S., in no small part because of its enviable water resources. But climate change threatens water quality, availability, and aging water infrastructure by exposing existing vulnerabilities and creating new ones. “All of us want a lower (greenhouse gas) future,” Rocco Rossi, President & CEO of the Ontario Chamber of Commerce said. But the transition away from the petroleum products that Line 5 carries “is not going to be overnight.” In the meantime, he said, pipelines are the safest and cleanest way to move petroleum from the Alberta tar sands in western Canada to facilities in the U.S. and eastern Canada where it’s turned into propane, jet fuel, plastics and fertilizer. The exchange highlights a sharpening focus on global climate change and economy-wide energy transitions, in a pipeline fight that began with concerns about oil spill risks in a 4-mile-wide strip of water known as the Straits of Mackinac. Against the backdrop of recent carbon neutrality pledges from Gov. Gretchen Whitmer and President Joe Biden, activists have ramped up their arguments that the Canadian oil giant Enbridge Energy is threatening Michigan’s water as well as its climate future. Enbridge and its supporters have defended Line 5 as a necessary asset in the transition to clean fuels, without which energy consumers in Michigan and elsewhere would suffer. Now, as a federal judge considers whether Line 5 should shut down in May and state and federal regulators decide whether to let Enbridge replace it with a tunneled pipe deep below the straits that could keep the oil flowing for decades, they’ll grapple with an issue of global significance: Are pipelines like Line 5 a “bridge to the energy future,” as Enbridge CEO Al Monaco has said, or a climate liability that threatens Michigan’s and the world’s progress toward carbon neutrality?
Utility says Ixonia LNG facility would have saved $1.1 million – We Energies officials stated Wednesday that a liquid natural gas storage facility, proposed for location in Ixonia, could have saved Jefferson County customers $1.1 million in heating costs this year if it had been in place. We Energies, in the face of strong local opposition, has been proposing location of an LNG tank in Ixonia northeast of Hill and North Roads, with the project calling for the facility to be located on 20 acres of approximately 165 total acres that is currently farmland.
Wisconsin regulators, residents question pipeline spill Enbridge failed to report for over a year –Canadian firm Enbridge Energy waited more than a year to notify state environmental regulators of a spill of a petroleum substance stemming from one of its pipelines in Fort Atkinson, Wisconsin. Now, community members near the site of the release want answers, and the regulators are determining whether to take enforcement action against the company.An alarm first alerted Enbridge Energy of a release on its Line 13 pipeline on April 26, 2019, near Blackhawk Island Road. Several weeks later, Enbridge staff identified the leak was coming from a valve fitting and made permanent repairs by June 2 of that year. But, it was on July 31, 2020 – more than a year later – that Enbridge reported the leak to the Wisconsin Department of Natural Resources.Now, the DNR is investigating the matter and is working with the company to figure out why there was a reporting delay, said Steve Martin, south central region team supervisor for the DNR’s remediation and redevelopment program.”Their initial notification to us indicated a release of less than two gallons, and they indicated they were under the impression there was a five-gallon threshold. That may be part of the problem,” said Martin. “But, we’re exploring that further with them to figure out why there was such a delay in the reporting.”Under the state spills law, Martin said any release regardless of the amount must be reported immediately to the agency. He said DNR staff are discussing whether to pursue enforcement action against the company and what steps might be taken.
INTERIOR: 13 states urge court to halt Biden’s oil leasing freeze — Thursday, April 1, 2021 — A coalition of 13 Republican state attorneys general are pressing a federal court to swiftly block the Biden administration’s moratorium on new oil and gas leasing on public lands and waters.
Line 3 protesters chain themselves to downtown Duluth business – In an attempt to speak out against Enbridge’s ongoing Line 3 pipeline replacement project, protesters gathered in downtown Duluth Wednesday, some chaining themselves to the doors of a building. Police were dispatched to the scene around 11:20 a.m. Two protesters involved used a bike lock to attach themselves to the outside doors of the Wells Fargo building, in an attempt to stop anyone from going inside. The protesters tell us they’re against Wells Fargo’s investments in the Line 3 project, which they claim could lead to environmental impacts along the route from Alberta to Superior. “We are demanding divestment today. Wells Fargo is economically invested in Tar-sands which we are against,” said Rachel Sipress, who is against the Line 3 replacement project. Police told the protesters to leave and firefighters cut the protesters free from the bike locks. According to Duluth’s Fire Chief Shawn Krizaj, the protest was overall peaceful and no one was hurt. “We certainly don’t condone locking doors. That becomes a fire safety hazard and a public safety hazard,” said Krizaj. The bank was eventually reopened to the public.
26 arrests made after Line 3 protest, including a Detroit Lakes resident —A Detroit Lakes resident was among 26 people arrested at the site of a Line 3 pipeline protest in Hubbard County on Thursday, March 25. At 11:17 a.m. March 25, the Hubbard County Sheriff’s Office received a report of about 30 pipeline protesters standing on the side of US Highway 71 at an Enbridge pipeline crossing in Hubbard County’s Lake Alice Township. Officers found numerous vehicles parked along the highway, a crowd of protesters standing on the edge of the roadway, and approximately 20-protesters on private property within the pipeline easement. A dispersal order was given to those on the highway and also to those trespassing on private property. Some individuals complied with the order as they moved their vehicles and left the area. Those that remained on the private property were locked together in a circle and were surrounding other protesters who also refused to leave. Officers from Hubbard and Beltrami counties removed the protesters and arrested them. Those charged were:
- Christian Briones, Garland, Texas: Unlawful assembly, trespassing.
- Micah Lott Carpenter, Arapahoe, Wyo.: Unlawful assembly, trespassing, obstructing legal process.
- Helen Clanaugh, Duluth, Minn.: Unlawful assembly, trespassing, obstructing legal process.
- Joshua Decker, Missoula, Mont.: Trespassing, unlawful assembly.
- Daniel Dixon, Washington, D.C.: Trespassing, unlawful assembly.
- Jennifer Dylkowski, Stacy, Minn.: Unlawful assembly, trespassing.
- Anne Franklin, Arroyo Seco, N. Mex.: Unlawful assembly, trespassing, obstructing legal process.
- Tara Houska, Minneapolis: Unlawful assembly, trespassing, obstructing legal process.
- David Ingold, Minneapolis: Unlawful assembly, trespassing.
- Elsa Johnson, Boulder, Colo.: Unlawful assembly, obstructing legal process, trespassing.
- Michael Kuhn, Minneapolis: Unlawful assembly, trespassing, obstructing legal process.
- Erik Leigh, Chisago City, Minn.: Unlawful assembly, trespassing.
- Regan Loggans, Brooklyn, N.Y.: Obstructing legal process, trespassing, unlawful assembly.
- Natalie Marsh, Springfield, Va.: Unlawful assembly, trespassing, obstructing legal process.
- Shane Mcsauby, Grand Rapids, Mich.: Unlawful assembly, trespassing, obstructing legal process.
- Joseph Meinholz, Minneapolis: Unlawful assembly, obstructing legal process, trespassing.
- Nteboheng Mokuena, Baltimore, Md.: Public nuisance, trespassing, unlawful assembly.
- Danika Pandilla, Monterey, Mass.: Unlawful assembly, trespassing, obstructing legal process.
- Victor Puertas, Salt Lake City, Utah: Trespassing, unlawful assembly, obstructing legal process.
- Avery Beattie, Red Wing, Minn.: Trespassing, unlawful assembly.
- Savannah Romero, Tukwila, Va.: Trespassing, unlawful assembly, obstructing legal process.
- Anna Schumacher, Detroit Lakes: Unlawful assembly, obstructing legal process, trespassing.
- Rafael Feikema, Williamsburg, Va.: Trespassing, unlawful assembly, public nuisance.
- Natalie Steinberg, Springfield, Va.: Unlawful assembly, trespassing.
- Maya Stovall, Macomb, Ill.: Trespassing, unlawful assembly, public nuisance, obstructing legal process.
- Maura Sullivan, New Orleans: Unlawful assembly, trespassing, obstructing legal process.
- Katie Woodward, Minneapolis: Unlawful assembly, trespassing.
All the individuals that were arrested were transported to the Hubbard County Jail and are awaiting arraignment.
When an Oil Company Profits From a Pipeline Running Beneath Tribal Land Without Consent, What’s Fair Compensation? – Tribal landowners tried for years to get fair compensation for an oil pipeline that cuts across the Fort Berthold Reservation in North Dakota, only to see officials and the courts dismiss their concerns. But now, thanks to new leadership at the Department of Interior, the federal government is taking a fresh look at their claims. Some see it as a sign that, not only might their voices finally be heard in this case but also that a turnaround has begun in the nation’s long history of injustices toward Indigenous people. For Mandan, Hidatsa and Arikara (MHA) Nation members with land allotments at Fort Berthold, an encouraging signal came earlier this month. That’s when the Department of Interior’s Acting Secretary Scott de la Vega scrapped the Trump administration’s decision to reduce a $187 million penalty assessed against the oil company that owns the Tesoro High Plains Pipeline for trespassing on the reservation for seven years after its contract lapsed. Although de la Vega’s order was issued the week before Interior Secretary Deb Haaland took office, it’s one of several recent moves by the department that oversees the nation’s mineral resources and tribal trust lands that is inspiring a new sense of hope among Indigienous peoples. Members of the nation’s 574 registered tribes are eager to see Haaland, a New Mexican from the Laguna Pueblo and the first Indigenous U.S. cabinet secretary, bring greater understanding to tribal rights and sovereignty. They hope she can help end a long history of exploitation of their land and natural resources without compensation or consultation.
Companies to test if syrupy, biodegradable substance boosts oil output – Two companies have teamed up to test whether sending a substance the consistency of maple syrup down oil wells will help boost production in North Dakota. The project involves combining the syrupy “biosurfactant” with water and pumping the mixture into wells. Once inside, it will reach the cracks in rock formed through the fracking process. It’s expected to reduce the attraction between rock and oil, freeing up the crude so it can be extracted. If successful, the biosurfactant could eventually be produced in North Dakota using locally sourced materials such as canola oil and sugar beets to facilitate the fermentation process necessary to create the substance. The pilot project is being funded in part by a $206,000 state grant approved by the North Dakota Industrial Commission earlier this year. The money stems from oil and gas taxes via the state’s Oil and Gas Research Program. “All the big players see this as a potentially low-cost, low-carbon footprint way of extracting more of the original oil in place in the Bakken,” said Jon Rogers, CEO of Locus Bio-Energy Solutions. Locus, an Ohio company, developed the biosurfactant and is partnering with Minot-based Creedence Energy Services to test it in North Dakota. Creedence provides chemical treatments to wells to protect against corrosion and scale buildup.
Pilot project will test method to increase oil production -(AP) – A pilot project in North Dakota is testing whether sending a substance with the consistency of maple syrup down oil wells will help increase production. The process involves combining so-called biosurfactant with water and pumping the mixture into wells where it will reach cracks in the rock formed when the oil is extracted by fracking. The goal is to reduce the attraction between rock and oil in order to recover more crude. If successful it could also benefit North Dakota farmers because materials such as canola oil and sugar beets facilitate the fermentation process necessary to create the biosurfactant. The project is being funded in part by a $206,000 state grant approved by the North Dakota Industrial Commission, The Bismarck Tribune reported. “All the big players see this as a potentially low-cost, low-carbon footprint way of extracting more of the original oil in place in the Bakken,” said Jon Rogers, CEO of The Woodlands, Texas-based Locus Bio-Energy Solutions. Locus developed the biosurfactant and is partnering with Minot-based Creedence Energy Services to test it in North Dakota. Creedence provides chemical treatments to wells to protect against corrosion and scale buildup. “We’re like the doctors and pharmacists of the oil fields,” Creedence President Kevin Black said. The companies are planning to test the biosurfactant down a handful of horizontal wells in the North Dakota oil patch, targeting those that are several years old with declining production. They also will test it down older vertical wells. In Texas, where the biosurfactant has already been tested, regulators have approved it as a means for oil companies to obtain a state tax credit. The product has been applied to more than 300 wells in various oil and gas basins across the United States.
North Dakota’s mineral owners are taking oil companies to court over royalty deductions -North Dakota’s mineral owners are squaring off against oil companies in court, with a series of lawsuits that take a multi-million swing at rising – and plaintiffs say improper – royalty deductions. Among the latest of these suits is one filed on behalf of Powell Family Mineral, which seeks class action status against Slawson Exploration. It was filed by Kansas attorneys Rex Sharp and Isaac Diel with Sharp Law and North Dakota attorney Mike Montgomery with Montgomery and Pender. In the suit, plaintiffs say they signed a lease in December of 2009, and that the lease language entitles Powell Family Mineral to royalties paid “free of cost” into the pipeline. However, Slawson has been deducting expenses such as gathering and moving oil, preparing oil, and other costs that plaintiffs say violate that lease language. Slawson has been contacted for comment on this story. If any comments are received, they will be added to this story online. In addition to Sharp’s case, North Dakota attorney Josh Swanson has filed seven similar cases, all revolving around the same lease language. “This issue has been percolating for a number of years,” Swanson said. “I would say probably going back four or five years, we started getting phone calls form clients who were noticing that significant deductions were being taken from their royalties that were exponentially greater than previous deductions.” As the deductions steadily rose, Swanson said, explanations have dwindled. “We’d get an explanation that either one, didn’t make any sense, or two, what happens most of the time is, mineral owners get stonewalled and the operator just refuses to answer any questions,” Swanson said. To Swanson’s clients, the lease language is fairly clear, Swanson said. “(It’s) ‘free of cost into the pipeline,'” he said. “Our contention is free of cost means exactly that, that oil and gas companies cannot be deducting any of their costs from the mineral owners’ royalties.” The cases have triggered Chief Judge Peter Welte to send a certified question to the North Dakota Supreme Court on the matter, asking that court to rule on the lease language. A hearing for that is set for April 6. “To say it’s a significant issue and that these are significant cases is probably an understatement,” Swanson said. “There’s tens of thousands of leases with just one oil company that are impacted. So you know, figure that if you’ve got, nearly 15 or 16 oil companies that have been sued in North Dakota.”
US senators press FERC to act quickly on North Bakken gas pipeline expansion US lawmakers from North Dakota are pressing the Federal Energy Regulatory Commission to act by its next monthly meeting to authorize WBI Energy Transmission’s North Bakken Expansion project, contending the 60-mile, 250 MMcf/d project has potential to cut methane emissions, alongside their assertions about its economic benefits. The project, if approved, will provide incremental firm capacity from six gas processing plants to a proposed interconnect with Northern Border Pipeline Company. The senators’ emphasis on the environmental footprint comes as greenhouse gas emissions of gas projects are expected to face more scrutiny at FERC under Chairman Richard Glick, who has long urged FERC to consider the climate impact of projects when it makes a public interest determination. “Providing new takeaway capacity allows domestic producers in the Bakken to increase their natural gas capture rate and reduce flaring,” said Senators John Hoeven and Kevin Cramer, along with Representative Kelly Armstrong, all Republicans from North Dakota, in a March 26 letter. “Because this project would interconnect with an existing pipeline network and provide an alternative to Canadian-sourced gas, it is our understanding that the net effect on downstream greenhouse gas emissions would be negligible.” WBI Energy on March 19 also pressed FERC for expedited action by April 15, building on the company’s prior effort to secure a February or March FERC decision to allow time to complete construction by a November 1 in-service target. In its March 19 letter to FERC, WBI Energy said the project would assist North Dakota producers and operators in meeting state gas capture targets by providing an added outlet for gas volumes that might otherwise be flared. Most gas pipeline capacity in the region is at capacity because of an increase in associated gas production over the last several years, WBI said. Bakken production averaged 2.0 Bcf/d this winter, but S&P Global Platts Analytics expects this to decline to 1.7 Bcf/d next winter with winter-over-winter losses going forward. While the exact timeline of when the bulk of declines would occur could vary, Platts Analytics expects them to come regardless. According to the North Dakota Industrial Commission, Bakken flaring averaged 170 MMcf/d from November 2020 through January 2021. The data is lagged by a couple of months. With lower production in the basin and the start-up of Outrigger Energy II’s 250 MMcf/d Bill Sanderson Gas Processing Plant any day now, flaring will likely fall in the basin regardless of this new processing and transport. WBI and the lawmakers also touched on another area of interest to Glick – whether projects have adequately demonstrated need. They noted that WBI Energy has entered into six binding precedent agreements with non-affiliated shippers for project capacity. Glick has sought more scrutiny of project need in circumstances when projects rely on contracts with affiliated shippers to demonstrate need.
33 Democrats urge Biden to shut down Dakota Access Pipeline 33 Democrats urge Biden to shut down Dakota Access Pipeline Greg Nash A group of 33 Democratic lawmakers is asking President Biden to shut down the Dakota Access pipeline after a court left the decision about whether to do so up to the administration. The legislators wrote to Biden on Monday that he should shut down the pipeline while it faces a court-ordered environmental review. “By shutting down this illegal pipeline, you can continue to show your administration values the environment and the rights of Indigenous communities more than the profits of outdated fossil fuel industries,” they wrote. “This is a critical step towards righting the wrongs of the past and setting our nation on a path of environmental, climate, and social justice,” they added, arguing that the way in which law enforcement removed protesters from the site in 2016 was “egregious environmental racism.” A court in January ruled against a decision by the federal government that allowed for the Dakota Access’s construction, determining that the Army Corps of Engineers should have conducted an environmental impact statement before the pipeline was allowed to move forward. But for the time being, it left the decision on whether to shut down the now-operation pipeline on that ground, up to the agency. “How and on what terms the Corps will enforce its property rights is … a matter for the Corps to consider,” the three-judge panel wrote. It was originally slated to decide on Feb. 10, but this was pushed back to April 9 at the administration’s request. The Dakota Access pipeline was completed in 2017 after former President Trump ordered for it to be revived, a reversal from when the Obama administration denied a permit for the project. The pipeline has drawn massive protests from environmentalists and tribes and have raised concerns about the risk of oil spills, with the Standing Rock Sioux and Cheyenne River Sioux tribes challenging it in court. However, the Mandan, Hidatsa and Arikara (MHA) Nation recently requested a consultation on the potential shutdown, noting that the pipeline brings its oil to market. A White House spokesperson didn’t immediately respond to the The Hill’s request for comment on the letter, but in regard to a different pipeline, the spokesperson recently told The Hill that it will evaluate infrastructure proposals based on energy needs, if they will help the country reach its goal of carbon neutrality by 2050 and whether they can create good-paying union jobs. Thursday’s letter was led by Sens. Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) and Reps. Nanette Diaz Barragfln (D-Calif.), Raul Ruiz (D-Calif.) and Raul Grijalva (D-Ariz.).
MHA Nation seeks consultation with U.S. Army Corps of Engineers on fate of Dakota Access Pipeline -Native American tribes have been the driving force behind efforts to shut down the Dakota Access pipeline, but now a Native American tribe has come forward in support of continuing its operation. Chairman Mark Fox of the Mandan, Hidatsa, and Arikara Nation has sent a letter to the U.S. Army Corps of Engineers asking for single-tribe consultation on continuity of operations for the Dakota Access Pipeline. In the letter, Fox notes that half of the oil produced on the MHA’s reservation is taken to market through Dakota Access. “We seek immediate consultation on the alternatives being considered by the Corps regarding continuity of operations of the Dakota Access Pipeline or alternative delivery systems while any NEPA-related or other federal review of DAPL is conducted,” Fox wrote. Fox said the MHA nation’s interests as an oil and gas producing tribe make it unique when compared to other tribes in the region. “We insist on a one-on-one consultation before any action is taken that would adversely impact the market value of our oil and gas resources, which are held in trust on our behalf by the United States,” Fox wrote. “At a minimum, our trustee owes the MHA Nation meaningful consultation that is specific and pre-decisional.” The letter is dated March 23 and was sent to Lt. General Scott A. Spellmon, commanding general of the U.S. Army Corps of Engineers. The letter comes as the Dakota Access pipeline nears a crucial moment. There is a court hearing on April 9 to determine whether the pipeline can continue carrying Bakken oil to Illinois while the U.S. Army Corps of Engineers completes additional environmental review, as ordered by Judge James Boasberg last year in April. The hearing was originally set for February, but the Biden administration requested a delay to familiarize themselves with the case. Boasberg last year vacated the easement the Corps had granted Dakota Access for its crossing under Lake Oahe. He determined that the federal government did not look closely enough at social justice aspects of the pipeline’s crossing. He also said the Corps should have conducted the lengthier Environmental Impact Statement, instead of the shorter Environmental Assessment, due to the pipeline’s controversial nature. Among items Boasberg said must be clarified in the Environmental Impact Study are how an oil spill at the Pipeline’s Lake Oahe crossing would affect the tribe’s hunting and fishing rights, and whether a spill at that crossing could disproportionately affect the tribal community, which lives on a reservation that is near the crossing. Boasberg had also ordered Dakota Access to empty itself by Aug. 5, but an appeals court found the type of injunction the judge ordered did not meet certain requirements, including that the remedy not harm public interest.
‘I live with Standing Rock in my heart’: Massive pipeline protest resonates 5 years later – Stuart Perkins had a steady job and was busy pursuing a career in comedy and music in the Twin Cities. But in late October, he saw a video online of law enforcement officers pulling protesters from a sweat lodge, and arresting them. “I quit my job that day, because somebody called me and said, ‘Hey, I’m going to Standing Rock, you want to ride with (me)?'” said Perkins. “I didn’t know where I was going to stay when I got there. I had money for food. I had my own bedding. I was ready to go out there and do whatever I had to do.” Perkins, 41, spent nearly the next four months at the Oceti Sakowin protest camp, near the confluence of the Cannonball and Missouri rivers. Stuart Perkins, a Red Lake Nation member, arrived at the Oceti Sakowin Camp near from the Standing Rock Sioux Reservation in south central North Dakota in late October 2016. “Out here you see people in a different light,” he said. “It’s like you’re out here with us risking your life. You get past that the first, second day. That’s over with.” “I still live with Standing Rock in my heart today,” he said recently. “It’s definitely changed me for life, and it’s changed me for the better.” Five years ago, that small protest camp, formed near the Standing Rock Sioux Reservation in North Dakota, grew to thousands of people – and lit the spark of an international movement against the Dakota Access oil pipeline – and many pipeline projects since. For months, the Oceti Sakowin camp drew protesters from North Dakota and across the country – and its influence is still felt at pipeline and climate change protests, and in the lives of those who were there in 2016. The protest started as a tribal government challenge to a pipeline permit process it felt ignored the sovereign status of the Standing Rock Tribe, and downplayed the risk to its water supply. It later expanded to also encompass a global climate change movement.
Oil Giants Win Climate Suit as Judges Push For Political Fix -New York City suffered another setback in its effort to make Exxon Mobil Corp., BP Plc and other energy companies help cover the public costs of dealing with climate change, as a federal appeals court ruled the global problem demands political rather than legal action.The ruling Thursday by the U.S. Court of Appeals in Manhattan is a warning sign for those trying to use the courts to hold the industry responsible for a problem that could cost taxpayers trillions of dollars in coming years. Chevron Corp., Royal Dutch Shell Plc and ConocoPhillips were also sued in the case.The court said global warming “is a uniquely international concern” that requires the federal government to step in rather than judges. Only the U.S. Environmental Protection Agency has the authority to regulate domestic greenhouse gas emissions, the unanimous three-judge panel held.New York City “sidestepped” federal procedure with a state-law tort suit against the energy companies even though their commercial activity of selling fossil fuel products around the world is “admittedly legal,” U.S. Circuit Court Judge Richard Sullivanwrote for the court.”In so doing, the City effectively seeks to replace these carefully crafted frameworks – – which are the product of the political process – – with a patchwork of claims under state nuisance law,” Sullivan wrote.A lower court judge in 2018 tossed out the lawsuit on similar grounds, ruling that the federal Clean Air Act governs carbon dioxide emissions and blocks lawsuits. New York City’s press office didn’t immediately respond to a message seeking comment.”As we’ve said from the beginning, lawsuits like New York City’s do not belong in the courts and do nothing to advance meaningful efforts that address climate change,” Exxon spokesman Casey Norton said in an email. “We support global efforts from policymakers, companies, and individuals to develop real solutions.” “Today’s unanimous opinion by a distinguished panel of judges appointed by presidents from both parties explains in clear detail why the U.S. climate tort lawsuits are meritless, applying established law as agreed upon by the Justice Department under the previous two U.S. administrations,” Chevron General Counsel R. Hewitt Pate said in a statement.
Canadian Pacific-KC Southern deal likely adds market share, not more crude by rail | S&P Global Platts – The $25 billion combination of Canadian Pacific Railway with Kansas City Southern creates the first single-path crude-by-rail gateway from Alberta to the Houston-area refining and export network, but it does not mean overall Canadian crude volumes to the US Gulf Coast are going to surge. While the combined company Canadian Pacific Kansas City may offer cheaper shipping rates for Canadian heavy oil sands when it is integrated in mid-2022, analysts said notably greater crude-by-rail volumes would only come if major oil pipelines are shuttered, such as the in-progress Line 3 Replacement project, the four-year-old Dakota Access Pipeline, and the pending Trans Mountain Pipeline expansion. The combined entity would have more efficiency in scheduling, and likely would reduce the cost of movements from Canada to the US Gulf Coast, since there would no longer be interchange fees for switching rail lines, according to S&P Global Platts Analytics. “Any lowering in an offered railing rate to the Gulf Coast would not be enough to be able to compete with pipeline capacity; it just may be able to better compete with other railing volumes, such as on Canadian National,” Indeed, rival Canadian National Railway currently offers the only seamless crude-by-rail route from Edmonton to the USGC. However, Canadian National only terminates in the refining hub of St. James, Louisiana. By scooping up Kansas City Southern, Canadian Pacific will offer routes to St. James and Lake Charles, Louisiana, as well Texas destinations near Houston, Beaumont and Corpus Christi. Notably, the combined Canadian Pacific Kansas City also would bank on growth by shipping more refined crude oil products into Mexico. That is expected to prove more beneficial thanks to the revised United States-Mexico-Canada Agreement trade deal. In recent years, Canadian Pacific has focused on improving oil sands crude transportation into the US, while a key source of Kansas City Southern’s growth was its increased movements of refined products into Mexico. The two companies’ rail networks do not overlap, and they link up, not coincidentally, in Kansas City, Missouri. The integrated company would count 20,000 miles of rail network stretching from the Alberta oil sands down past central Mexico.
Northern Alberta pipeline leak spills estimated 100,000 litres of ‘sour emulsion’ – The Alberta Energy Regulator says it is responding to the release of an oil-water mixture known as ‘sour emulsion’ from an Accel Energy Canada line in northern Alberta (Kyle Bakx/CBC)The Alberta Energy Regulator says an oil and gas company under court protection from creditors is reporting the leak of an estimated 100,000 litres of oilfield liquids from a pipeline in northern Alberta. The provincial regulator says it is responding to the release of an oil-water mixture known as “sour emulsion” from an Accel Energy Canada line about 24 kilometres southwest of Swan Hills, reported by the company last Thursday evening. It says the pipeline has been shut down and depressurized and the company is taking steps to clean up the spill. The volume of the release is unknown at this time but is estimated to be approximately 100 m3, the AER said in a statement. “AER staff are on site to oversee the company’s clean-up activities and to ensure all safety and environmental requirements are met during the response to the incident. “There are no reported impacts to the public or wildlife at this time.” The AER says that PricewaterhouseCoopers Inc. has been appointed to monitor Accel while in creditor protection but the licence for the assets remains with the company. The company did not immediately respond to a request for comment on Monday.
Venezuela wants to pay for vaccines with oil –Venezuelan President Nicolfls Maduro on Sunday proposed that his country pay for coronavirus vaccines with oil. Maduro offered the proposal at a news conference, explaining that he hoped to use oil revenue to pay for vaccines through the World Health Organization’s COVAX mechanism, which gives vaccine access to poorer countries. “Venezuela has the oil vessels and has the customers who will buy our oil,” said Maduro, according to a report by Reuters. “We are ready and prepared for oil for vaccines, but we will not beg anyone.” Venezuela has received shipments of vaccine doses from allies Russia and China. The Venezuelan government has been in talks with the Pan American Health Organization for access of the vaccine through COVAX, but last week Venezuela said it will not accept the AstraZeneca PLC vaccine which is disturbed by COVAX, Reuters reported. The AstraZeneca vaccine saw its use suspended in a number of European countries earlier this month after reports linking it to blood clots in some patients. But health authorities in Europe have since vouched for its safe use. The AstraZeneca vaccine has not yet been approved by the U.S. Food and Drug Administration. Venezuela has been struggling economically the last decade with plummeting oil sales as the U.S. government has imposed sanctions on it.
Research team monitors oil-eating bacteria in northeast Atlantic – An underwater observatory in the Faroe-Shetland Channel offshore northwest Scotland has detected oil-eating bacteria that could help manage future oil spills. The observatory, said to be the first of its kind in the northeast Atlantic, is in an area with a heavy oil and gas and shipping activity. The Royal Society, the Society for Applied Microbiology, and the Marine Alliance for Science and Technology for Scotland are helping to fund the research. According to Dr Tony Gutierrez of Heriot-Watt University, it is unclear whether the oil-degrading bacteria provide evidence of chronic spillage, but it is a hopeful sign should blowouts or pollution arise in the area. “Oil-degrading bacteria play a vital role in cleaning up oil spills – we found them strongly enriched during the Deepwater Horizon spill, for example. These types of microbes thrive on oil as a food source.” Gutierrez and his team monitored the Faroe-Shetland channel’s water over a two-year period, at different depths and locations. “Overall, we detected a higher than usual abundance of these bacteria. They comprised about 15-20% of the total community of microbes, when quite often you find them at less than 1% abundance. “We’re not sure why this is the case – it could be due to natural seepage of oil from the seafloor, or the release of produced waters from oil rigs.” Establishing a baseline in these waters, he added, will support monitoring of the impact of future spills and the success of any future clean-up campaigns. The team now plans to extend its monitoring in the Faroe-Shetland channel, and have identified other locations for similar observatories. “Creating microbial observatories in other ocean regions at potential risk of pollution and climate change effects, like the Arctic, is one of our goals,” said Gutierrez.
Russia Oil Demand Hits Record High in U.S. Amid Rising Tensions – The oil tankers docking at the refinery in Baytown, Texas, look exactly like many others plying the waters of the Houston Ship Channel. But stashed inside their capacious holds is an unusual cargo: Russian petroleum. The sprawling complex, which belongs to Exxon Mobil Corp., isn’t the only U.S. refinery that’s been receiving shipments of Russian oil. Chevron Corp.’s plant in Mobile, Ala., and Valero Energy Corp.’s facility in St. Charles, La., are also customers. Deprived of access to Venezuelan crude by U.S. sanctions on the regime of Nicolfls Maduro, and facing reduced shipments from OPEC nations since the cartel cut output, U.S. refiners turned to Russian oil in 2020 to fill the gap. The buying spree, combined with sharply lower Saudi shipments, catapulted Russia into the position of third-largest oil supplier to the U.S. last year. The feat for the Kremlin has been the talk of the oil market, but surprisingly it hasn’t been discussed much in diplomatic circles. “Russia’s move into third place has not attracted any attention in Washington,” says Bob McNally, a former senior White House policy adviser who now runs Rapidan Energy Group, a consulting firm in Washington. America’s increasing reliance on Russian oil is at odds with U.S. energy diplomacy. For the last two years, lawmakers in Washington have been lobbying European countries to abandon Nord Stream 2, a multibillion-dollar pipeline to transport Siberian gas to Germany, fearing it will give the Kremlin further leverage over U.S. allies. (Russian gas accounted for about 45% of Europe’s natural gas imports in 2019.) Congress went as far last year as to authorize the use of sanctions against companies involved in the project. The Biden administration hasn’t indicated whether it’s considering exercising that option. More important, perhaps, the quiet surge in Russian oil imports shows that the mantra of energy independence championed by former U.S. President Trump is hollow, says Mark Finley, a former oil analyst at the CIA who’s now a fellow at Rice University’s Baker Institute in Houston. Campaigning last year in Texas, Trump boasted that the U.S. was the “No. 1 energy superpower” and the country would never again have to depend on “hostile” foreign suppliers. “So much for energy dominance,” Finley says. In February of last year, the Trump administration blacklisted a trading subsidiary of state-run Rosneft, the largest Russian oil company, saying it provided a financial lifeline to Maduro’s government. But no other Russian entities were targeted, meaning U.S. companies could carry on buying Russian crude and refined products. The path for Russia to become a key oil supplier to the U.S. was paved with market savvy, luck, and the Kremlin’s proven ability to turn Washington’s policies to its favor. After years of accounting for less than 0.5% of annual U.S. imports of oil and refined products, Russia steadily increased its share over the last decade, reaching an all-time high of 7% last year, according to Bloomberg News calculations. U.S. imports from Russia averaged 538,000 barrels a day in 2020 – more than the 522,000-barrel-a-day average from Saudi Arabia.
Watchdog to fine Russian Railways $429,707 for fuel oil spill in Vladimir Region – Russia’s Federal Service for Supervision of Natural Resources estimated the damage to the environment caused by the fuel oil spill near the city of Vladimir in November last year at 32.5 mln rubles ($429,707), the agency said in a statement on its website on Monday. According to the statement, the watchdog has sent its demand for voluntary compensation for the damage to the Russian Railways company. On November 16, 2020, the cars of the freight train, which included 64 tanks with fuel oil, derailed on the Novka-1 – Terekhovitsy section of the Gorkovskaya railway. As a result of the accident, one person was killed. According to the Emergency Situations Ministry, the area of the leakage of oil products at the scene was 12,500 square meters. In December, the watchdog’s experts reported a tenfold excess of the maximum permissible concentration of oil products in soil samples taken at the scene. “Employees of the department [the interregional department of the watchdog for the Ivanovo and Vladimir regions – TASS] calculated the amount of damage done to the soil. It totals 32,454,862 rubles. By now, a demand for voluntary compensation for environmental damage has been forwarded to Russian Railways,” the statement said. The watchdog’s regional department opened an administrative offense case. An order to eliminate the identified violations has been sent to the Russian Railways company. The Volga Transport Investigation Department continues to investigate the criminal case under Part 2 of Article 263 of the Criminal Code of the Russian Federation (Violation of traffic safety rules and the operation of railway transport, resulting in the death of a person by negligence).
Water samples taken from river after oil spill iIn Northwest Russia – Officials –Specialists took water samples from the Volkhov River in Novgorod region after reported oil spill, the Russian emergency ministry’s representative told Sputnik on Friday. Earlier this day, the Novgorod region government reported detecting the spill of oil products on the river in the nearby city of Veliky Novgorod. The source of contamination is unknown. “Water samples have been taken from the site of the spill to identify contaminants and pollution degree,” the representative said. According to him, drones will fly over the place to determine the scale of the spill. He added that the contamination, located in the backwater, has not spread downstream yet.
Delta residents groan as oil spill hits community — THE people of Gbaramatu Kingdom in Warri South-West Local Government Area Delta State have cried out over the ravaging oil spill from the facilities of Chevron Nigeria Limited for over six weeks They demanded the physical presence of the Managing Director of the oil firm to see things for himself and ensure honesty and transparency on the way out of the woods. In a statement signed by the Spokesman for the Kingdom, Chief Gbenekama Godspower (The Fiyewei of Gbaramatu Kingdom) and made available on Sunday, the people decried their alleged neglect by Chevron Nigeria Limited since the ranging oil spill six weeks ago. The statement read in part, “We, the women of Gbaramatu Kingdom, ranging, but not limited to Okerenkoko, Ikpokpo, Opuedebubor, Kenghangbene, Azama, Benikrukru, Kokodiagbene, Oporoza, Inikorogha, Kunukunuma, Pepeama as well as other communities, are currently protesting their ill-treatment at the hands of both Government and Chevron Nigeria Limited.” They called on government at all levels, as well as other well meaning individuals and organisations to prevail on Chevron Nigeria Ltd to do the needful regarding the oil spills, lamenting that it had grounded economic activities in the Kingdom for over six weeks.
Libya NOC gets oil spill in Dahra under control – Libya’s National Oil Corporation (NOC) said Sunday an oil spill north of the country has been brought under control.In a statement posted on its Facebook page, the NOC said the leak occurred in one of the supply lines of the Dahra oil field.”Technical teams were able to complete the work and halt the leak,” the statement said, while the cause of the spill was not announced.According to the oil corporation, the leak did not affect production operations.Dahra oil field is one of the oldest oil fields in the country and was discovered in the late 1950s with an average daily production of 120,000 barrels.The Libyan economy suffered huge losses and continues to do so due to the oil blockades, which were described in the statement as “illegal” and which will badly affect the state’s 2020-2021 budget and salary payments.Oil production has plunged by around three-quarters since forces loyal to Haftar launched a blockade. The blockade has also cut off revenue for state institutions operating across the countryAs the warring sides reached a consensus to issue a cease-fire and launch a peace process under a unity government over the past months, the blockage has also been lifted.Back in October 2020, the NOC said in a statement on Facebook that it was declaring “the ending of the blockades in the entire Libyan fields and ports as of today.””Instructions have been given to the operator, Mellitah Oil & Gas BV, to resume production in al-Feel oil field and the gradual return of Mellitah crude to its normal level in the next few days,” it added.
Hundreds evacuated after Indonesian oil refinery catches fire – An oil refinery in Indonesia caught fire early Monday morning, leaving six people seriously injured and prompting the evacuation of nearly 1,000 residents. The fire, which officials said was caused by lightning, also caused damage to hundreds of houses nearby, according to The New York Times. Pertamina, the state-owned company that runs the oil refinery, released a statement that said it could not estimate when the fire could be contained. Clips of the fire show panicked residents as well as a loud explosion coming from the inferno. Authorities shared that a 61-year-old man suffered a heart attack and died during the chaos. Ifki Sukarya, a Pertamina spokesman said that four gasoline storage tanks caught on fire. Twenty-three other people suffered minor injuries, and some residents became ill due to the strong smell of the fuel. A similar accident happened at the refinery two years ago when crude oil leaked offshore, contaminating 12 miles of the West Java shoreline. Company officials announced that they will have the refinery operating within four to five days. They said there was enough gasoline on hand to supply the country.
Balongan refinery fire inflicts 400,000 barrels oil loss for Pertamina – – Some 400 thousand barrels of oil of Indonesia’s state-owned oil company PT Pertamina (Persero) were lost following a major fire at the Balongan Refinery, Indramayu, West Java, on Monday, at 00:45 a.m. local time. “The production loss is estimated at around 400 thousand barrels since it cannot be supplied from the refinery,” Pertamina’s Logistics and Infrastructure Director, Mulyono, noted in a statement here, Monday. The company proceeded with a normal shutdown soon after the fire erupted. The Balongan Refinery is expected to be operating normally again in the next four to five days. During the termination of operations, Pertamina will supply fuel for the community from several refineries and fuel terminals, one of which is the Cilacap Refinery and the Trans Pacific Petrochemical Indotama (TPPI) Refinery. The Cilacap refinery will boost production to 300 thousand barrels and the TPPI refinery by 500 thousand barrels. Pertamina continues to probe the cause of the fire and is focused on handling the emergency situation. The company claims to have been able to localize the fire inside the bund wall by using foam to prevent the flames from spreading to other areas. Pertamina, in cooperation with the district governments of Indramayu and Cirebon, deployed 10 fire engines. The fire broke out at the T-301G tank amid torrential rains accompanied by lightning. The flames could be seen at a distance of five kilometers. Hundreds of residents, earlier evacuated to a safe place, away from the location of the fire, have now gradually begun returning to their respective homes.
Lamor and NCEC of Saudi Arabia to strengthen oil spill response capabilities in Red Sea Area – The Finnish environmental services company Lamor Corporation Ab and the National Center for Environmental Compliance (NCEC) of Saudi Arabia have concluded an agreement to strengthen the oil spill response capabilities in the Red Sea area Lamor image ORMELamor will provide a programme of services, equipment and resources that will enhance the response capabilities in the region. (Image source: Lamor Corporation) The Red Sea is one of the world’s busiest sea routes and the coastline has some absolutely pristine environments that could suffer irreparable damage in case of a major oil spill. Increasing the Kingdom’s abilities to respond to incidents is a key mission of NCEC and the Ministry of Environment, Water and Agriculture. “Signing this agreement marks an important milestone in the agency’s continuous efforts to improve the environmental protection abilities of the kingdom,” commented Ali S Alghamdi, CEO of NCEC. Lamor will provide a programme of services, equipment and resources that will enhance the response capabilities in the region. The services include assessment of the current resources, contingency planning, knowledge transfer and training of responder resources. The services include the provision of both marine and aviation assets for oil spill response duties.
Oil rises as traders expect OPEC+ to hold output cuts (Reuters) – Oil prices rose nearly 1% on Monday after Reuters reported that Russia would support stable oil output from OPEC+ ahead of a meeting with the producer group later this week. Futures had fallen earlier in the session on news that a container ship in the Suez Canal blocking traffic for nearly a week had been refloated. Brent oil rose 41 cents to settle at $64.98 a barrel. U.S. crude rose 59 cents to settle at $61.56 a barrel. “The market is looking beyond the Suez Canal and focusing on the upcoming OPEC+ meeting, where we’re getting strong indications they’re going to rollover the output cuts,” Russia will support broadly stable oil output by the Organization of the Petroleum Exporting Countries and allies including Russia (OPEC+) in May, while seeking a relatively small output hike for itself to meet the rising seasonal demand, according to a source familiar with Russia’s thinking. Sources told Reuters last week that they expect a decision similar to the last meeting when OPEC+ meets on April 1 to decide output policy. Russian oil and gas condensate output increased to 10.22 million barrels per day (bpd) in the period March 1-28 from 10.1 million bpd in February, two industry sources familiar with the data told Reuters, broadly in line with Moscow’s plans. At the Suez Canal, live footage on a local television station showed the ship Ever Given surrounded by tug boats moving slowly in the centre of the canal on Monday. The station, ExtraNews, said the ship was moving at a speed of 1.5 knots. However, disruptions in the global shipping industry could take weeks and possibly months to clear, top container shipping lines said. “The market will soon realize that despite the positive news, even if Ever Given leaves the Canal within days, some leftover downstream ripple effects should be expected in the meantime,” Limiting price gains, some European countries struggling with increased COVID-19 infections have tightened lockdown restrictions, and fuel demand across the continent remains weak. England’s stay-at-home lockdown order, though, ended on Monday.
Oil Prices Fall As Bearish Sentiment Returns – Oil prices fell on Tuesday as the Suez Canal was cleared and concerns about global bottlenecks eased. Traders are now focused on the upcoming OPEC+ meeting, which most observers believe will result in an extension of cuts, and the impact of Covid-19 on oil demand in Europe. Saudi Arabia wants OPEC+ cuts extended through June. Russia, the leader of the non-OPEC group in OPEC+, favors a rollover of the alliance’s oil production cuts while seeking a slight increase for itself to meet higher seasonal demand. Total and other international contractors evacuated some staff from Mozambique over the weekend as insurgents advanced to the coastal town of Palma, a hub for the country’s nascent LNG industry. Total’s $20 billion project is the largest foreign investment on the African continent but now appears to be at grave risk. Iran and China signed a wide-ranging economic and security agreement, billed as a “strategic partnership” that will last 25 years. Details remain sparse, but the move likely paves the way for more Chinese investment in Iran’s oil sector and also open up more room for exports. The WSJ also says that the two countries could set up a joint bank that would help Iran evade U.S. sanctions. Reuters reports that Iranian oil exports are expected to continue to rise in March. . Sinopec, the largest oil refiner in Asia,announced plans to shift towards carbon neutrality by 2050, a plan that leans heavily on hydrogen. Abu Dhabi allowed trading in its futures contract, Murban, on the Intercontinental Exchange (ICE). The move is aimed at bolstering the emirate as an international oil trading hub. President Joe Biden is including rivals Vladimir Putin of Russia and Xi Jinping of China among the invitees to the first big climate talks of his administration, according to the AP. The event will be held virtually April 22 and 23. Exxon and Chevron have dramatically scaled back drilling in the Permian compared to a year ago. According to Rystad, the two majors accounted for 28% of Permian drilling activity in the spring of 2020, a share that is now down to less than 5%. “We essentially hit a pause button,” said Chevron Chief Financial Officer Pierre Breber, according to Reuters. Cheap financing and higher crude oil prices couldkick off another round of drilling in U.S. shale, despite promises to exercise restraint.
Oil drops as Suez opens, focus turns to OPEC+ output cuts – Oil prices fell on Tuesday as the Suez Canal opened up after days closed by a grounded supercarrier and focus turned to an OPEC+ meeting this week where the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns. Brent crude was down 78 cents, or 1.2%, at $64.21 per barrel. U.S. oil was off by 95 cents, or 1.5%, at $60.61 per barrel. Ships were moving through the Suez Canal again on Tuesday after tugs refloated the giant Ever Given container carrier, which had been blocking a narrow section of the passage for almost a week, causing a huge build-up of vessels around the waterway. With concerns about a shortage of physical supplies abating, the market is turning its focus to Thursday’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia in Vienna, collectively known as OPEC+. “The Saudi-led decision to hold back more oil production will yield an extraordinarily tight oil market with global stock draws,” OPEC+ will discuss whether to keep in place curbs on output that have kept millions of barrels a day off the market to support prices, a strategy that has largely worked in recent months. Saudi Arabia is prepared to accept an extension of the production cuts through June, and is also ready to prolong voluntary unilateral curbs amid the latest wave of coronavirus lockdowns, a source briefed on the matter said on Monday. Stymieing efforts to contain global supply are rising exports under the radar from OPEC member Iran to China, which is ignoring U.S. and United Nations sanctions on the country and importing higher amounts of Iranian oil, according to traders and analysts. China may receive as much as 1 million barrels a day this month in imports from Iran passed off as crude from other origins. Efforts to control the COVID-19 pandemic remain an issue. More than 127.43 million people have been reported to be infected by the novel coronavirus globally, and the death toll is approaching 3 million, according to a Reuters tally. In Europe, rising numbers in a third wave of infections are alarming authorities, with France’s Finance Minister Bruno Le Maire saying “all options are on the table” to protect the public. “
Oil Prices Under Pressure As API Reports Inventory Build – The American Petroleum Institute (API) reported a build in crude oil inventories of 3.910 million barrels for the week ending March 26.Analysts had predicted a much smaller inventory build of 107,000 barrels for the week.In the previous week, the API reported a build in oil inventories of 2.927 million barrels after analysts had predicted a build of 272,000 barrels.Oil prices were trading down on the day prior to the data release, with WTI trading down $0.96 at 2:45 p.m. EDT at $60.60, while Brent crude traded down $0.78 at $64.20 per barrel. Prices were again volatile this week, with the prospect of oil shipment delays through the previously logjammed Suez Canal and OPEC+’s JTC meeting on Tuesday, which saw its members agree to revise down its oil demand estimates for this year on the prompting of member Saudi Arabia, who indicated that the figure OPEC+ was using seemed too high. OPEC+ has not released the official oil demand figure.U.S. oil production rose to 11.0 million bpd during the week ending March 19, according to the latest data from the Energy Information Administration.The API reported a draw in gasoline inventories of 6.012 million barrels for the week ending March 26 – on top of the previous week’s 3.728-million-barrel barrel draw. Analysts had expected a 730,000-barrel build for the week.Distillate stocks saw an increase in inventories this week of 2.595 million barrels for the week, after last week’s 246,000-barrel increase.Cushing inventory figures rose by 904,000 barrels. Post data release, at 4:34 p.m. EDT, the WTI benchmark was trading at $60.46, while Brent crude was trading at $64.02.
WTI Pumps-n-Dumps After Crude Draw Ahead Of OPEC+ Meeting Oil prices chopped around overnight but are basically flat ahead of this morning’s inventory/demand/production data. Weakness came on concerns about the market’s recovery after OPEC and its allies lowered their 2021 demand growth forecast, although strong Chinese factory activities lent some support (China’s manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays).The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to meet on Thursday, to decide on output policy.“Given this pessimistic outlook, it seems likely that the production quotas will be left in place for another month,” said Commerzbank analyst Eugen Weinberg.OPEC oil output rose in March as higher supply from Iran countered reductions by other members under a pact with allies, a Reuters survey found, a headwind for its supply-limiting efforts if Tehran’s boost is sustained.For now, focus is on US activity. API:
- Crude +3.91mm (-1.5mm exp)
- Cushing +904k
- Gasoline -6.012mm (+700k exp)
- Distillates +2.595mm (+500k exp)
DOE
- Crude -876k (-1.5mm exp)
- Cushing +782k
- Gasoline -1.735mm (+700k exp)
- Distillates +2.542mm (+500k exp)
A surprise build reported by API overnight was dismissed by the official EIA data showing a 876k barrel draw (breaking a 5 week streak of builds). Gasoline stocks drew down unexpectedly and distillates inventories rose considerably more than expected..
Oil falls on OPEC+ concerns over slow demand recovery – Oil prices fell on Wednesday on concerns about the market’s recovery after OPEC and its allies lowered their 2021 demand growth forecast, although strong Chinese factory activities lent some support. Brent crude for May, which expires on Wednesday, fell 48 cents, or 0.8%, to $63.66 per barrel. The more active Brent contract for June was down 53 cents, or 0.83%, at $63.64 a barrel. U.S. West Texas Intermediate (WTI) crude futures declined $1.13, or 1.9%, to $59.52 per barrel. OPEC+ has lowered its oil demand growth forecast for this year by 300,000 barrels per day (bpd), a report from its experts panel meeting seen by Reuters showed. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to meet on Thursday, to decide on output policy. “Given this pessimistic outlook, it seems likely that the production quotas will be left in place for another month,”. OPEC+ are currently curbing output by just over 7 million bpd in a bid to support prices and reduce oversupply. Saudi Arabia has added to those cuts with an additional one million bpd. “The oil market is still playing a guessing game today as to what supply policy OPEC+ will set out at tomorrow’s meeting, but the $64 per barrel Brent price signals that traders expect a cautious approach from the alliance,” said Rystad Energy’s analyst Louise Dickson. Kuwait’s Oil Minister Oil Mohammad Abdulatif al-Fares expressed “cautious optimism” on Wednesday that global oil demand will improve as COVID-19 vaccination programmes gather pace and industrial output recovers. OPEC oil output rose in March as higher supply from Iran countered reductions by other members under a pact with allies, a Reuters survey found, a headwind for its supply-limiting efforts if Tehran’s boost is sustained. Meanwhile, data from the American Petroleum Institute showed a bigger than expected build in U.S. crude stocks. Traders will be eying data later on Wednesday from the U.S. Energy Information (EIA) for further guidance. Oil prices found some support as China’s manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays.
Oil Futures Decline As France Locks Down — Oil fell the most in roughly a week after France announced it will start a month-long lockdown, while OPEC+ voiced its concerns about the strength of oil demand ahead of an expected decision this week on output. Futures in New York fell 2.3% on Wednesday to the lowest in nearly a week, with French President Emmanuel Macron saying the pandemic is more dangerous than it was in the fall in his address to the nation. The deteriorating near-term demand picture in Europe offset a surprise oil supply draw in the U.S. and other bullish signals pointing toward rising demand as more Americans are vaccinated. “The news out of France is very troubling for the petroleum complex,” “The Covid situation worsening, particularly in Europe, represents a demand hit again, and it’s weighing on prices.” Meanwhile, an OPEC+ panel meeting ended without a policy recommendation ahead of Thursday’s talks where the producer group will decide on production going forward. The OPEC+ alliance is debating whether to revive part of the 8 million barrels of daily output — about 8% of global supply — they’re withholding. OPEC Secretary-General Mohammad Barkindo pointed to the oil market’s recent volatility as “a reminder of the fragility facing economies and oil demand.” “The balance of risks suggests OPEC will steer toward the cautious outcome, delivering sharp deficits and continue to tighten energy markets at a fast clip,” TD Securities commodity strategists led by Bart Melek said in a note. Figures from the Energy Information Administration paint the U.S. as a bright spot for demand recovery. U.S. refineries are processing crude at the highest rate in a year. In other parts of the world, the trajectory for fuel consumption remains muddled as evidenced by France’s renewed nationwide lockdown. The demand numbers in the U.S. “were huge and we continue to see improvements there,”. “It’s pretty consensus to think that gasoline will be strong and jet fuel will be the laggard,” but there’s been positive signs “even on the jet fuel side.” West Texas Intermediate for May delivery fell $1.39 to settle at $59.16 a barrel, posting the largest daily loss since March 25. Brent for May settlement slipped 60 cents to $63.54 a barrel ahead of the contract’s expiry later on Wednesday. Brent for June delivery lost $1.43 to $62.74 a barrel. Separately, Saudi Aramco, the state-owned oil giant, is expected to raise its Arab Light official selling price for May supplies by 30 cents a barrel, according to the median estimate in a Bloomberg survey of refiners and traders. That’s despite continued flows of Iranian crude into China, and challenging conditions for many Asian refiners.
Oil gains ahead of OPEC+ meeting on output policy Crude prices rose on Thursday, recouping some of the previous session’s losses on expectations that a meeting of OPEC and its allies later on Thursday would yield output constraint- in the face of resurgent COVID-19 infections in some regions. Brent crude for June delivery was up by 16 cents, or 0.18%, at $62.85 a barrel after falling 2.2% overnight. U.S. oil was up 18 cents, or 0.16%, at $62.86 a barrel, having dropped 2.3% on Wednesday. Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia and Kazakhstan, a group called OPEC+, meet later on Thursday to consider options that include an output roll-over and a gradual output increase. “The most likely outcome of the … meeting is no significant changes in production,” Eurasia Group said in a report on the gathering. “The caution on display in the OPEC+ discussions signals that any decisions on tapering will likely be delayed to the May meeting,” Eurasia said, referring to the gradual supply of withheld production to the market. A lowering of the OPEC+ oil demand growth forecast for this year by 300,000 barrels per day (bpd) also weighed on prices and made it more likely the meeting would result in continued restraint. On Wednesday, the Joint Technical Committee, which advises the group of oil-producing nations that includes Saudi Arabia and Russia, made no formal recommendation, three OPEC+ sources said. OPEC+ is currently curbing output by just over 7 million bpd to support prices and reduce oversupply. Saudi Arabia has added to those cuts with a further 1 million bpd. The cuts came after the novel coronavirus outbreak turned into the biggest global health crisis in a century and led to the evisceration of demand for oil and fuel. Recovery has been intermittent as outbreak after outbreak of coronavirus infections leads to more lockdown measures. France President Emmanuel Macron on Wednesday put his country into a third lockdown and said schools would close for three weeks to cope with a third wave of COVID-19 infections that threatens to overwhelm hospitals.
Oil settles over 3% higher as OPEC+ officially announces plan to gradually lift output Oil futures gained more than 3% on Thursday after the Organization of the Petroleum Exporting Countries and its allies officially announced an agreement to gradually lift output starting in May.The group of producers, together known as OPEC+ announced that (link) they approved an adjustment to the production levels for May, June and July.During a press conference, Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman said OPEC+ will raise daily oil production by 350,000 barrels in May, 350,000 barrels in June and by 441,000 barrels in July.He also said Saudi Arabia will gradually roll back the voluntary 1 million-barrel per day cut it’s had in place since January, easing the per-day reduction by 250,000 barrels in May, by 350,000 barrels in June and by 400,000 barrels in July.Phil Flynn, senior market analyst at The Price Futures Group said that he expected producers to raise production levels, but “did not expect that they would announce it now, especially after lowering the demand outlook.””While OPEC is acknowledging that the world will need more oil as the U.S. reopens, the increases they are talking about are very modest so if demand bounces back, the market will still be tight,” he said. West Texas Intermediate crude for May delivery rose $2.29, or 3.9%, to settle at $61.45 a barrel on the New York Mercantile Exchange after trading as high as $61.75 in the wake of the producers’ decision. June Brent crude , the global benchmark, added $2.12, or 3.4%, at $64.86 a barrel on ICE Futures Europe, after taping an intraday high of $65.For the week, based on the front-month contracts, WTI prices rose 0.8% and Brent crude climbed 0.7%, according to Dow Jones Market Data.Both crude benchmarks ended Wednesday with a monthly loss of close to 4%. In opening remarks at the OPEC+ meeting Thursday (link), Prince Abdulaziz said that “the reality remains that the global picture is far from even, and the recovery is far from complete.””On the supply side, we have continued to play our part,” he said. “Compliance with the levels we agreed has — once again — been impressive,” with new aggregate levels set at 113%. But “we have to approach the coming weeks with the same admirable commitment.””Until evidence of the recovery is undeniable, we should maintain this cautious stance,” Prince Abdulaziz said. U.S. Energy Secretary Jennifer Granholm late Wednesday tweeted that she had talked with Prince Abdulaziz and had “reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers.”(link)
Oil settles up more than $2 despite OPEC+ production cuts – Oil prices settled up more than $2 Thursday despite news that OPEC+ reached a deal to gradually ease production cuts from May. Brent crude settled up $2.12, or 3.4%, to $64.86 a barrel. U.S. oil settled up $2.29, or 3.9%, at $61.45 a barrel. OPEC+, which comprises the Organization of the Petroleum Exporting Countries, Russia and other allied producers, agreed to ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June and further 400,000 bpd or so in July. “Ironically, the market has bought the OPEC+ story that demand will increase and the barrels will be needed, despite multiple calls by OPEC for caution in the days leading up to the meeting,” said Bob Yawger, director of energy futures at Mizuho. Under Thursday’s deal, cuts implemented by OPEC+ would be just above 6.5 million bpd from May. OPEC+ had cut output by nearly 7 million bpd, and Saudi Arabia made an extra 1 million bpd voluntary output cut. Russian Deputy Prime Minister Alexander Novak said in the meeting that he expected global oil demand to grow by 5-5.5 million barrels per day (bpd) this year. Novak said he hoped global oil inventories, a key parameter for the oil industry, would return to their normal level in two to three months. However, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the market’s recovery was “far from complete.” The Saudi state news agency reported that he and his U.S. counterpart Jennifer Granholm spoke on the phone and agreed to work to enforce cooperation in the energy field. OPEC+ has trimmed its oil demand growth forecast for this year by 300,000 bpd because of renewed lockdowns. France entered its third national lockdown and schools closed for three weeks to try to contain a third wave of COVID-19 infections. Still, European markets have recovered most of their pandemic-driven losses on strong manufacturing activity. March data showed euro zone factory activity growth galloped at its fastest pace in the history of the survey. Oil found some support after U.S. President Joe Biden outlined a $2.3 trillion spending plan to invest in traditional projects, such as roads and bridges, alongside tackling climate change. Oil prices were pressured by an unexpected rise in U.S. claims for unemployment benefits. But prices drew support from a U.S. Energy Information Administration report that domestic crude stocks fell unexpectedly last week.
Oil Futures Settle Nearly 4% Higher – Crude oil prices moved sharply higher on Thursday, supported by news that the Organization of the Petroleum Exporting Countries and their allies, including Russia and Kazakhstan, have agreed to incremental increases in crude production for three months starting in May. West Texas Intermediate Crude oil futures for May ended higher by $2.29 or about 3.9% at $61.45 a barrel. Brent crude futures were up $1.93 or 3.1% at $64.67 a barrel. Investors were also reacting to the EIA inventory data and the announcement of U.S. President Joe Biden’s vast infrastructure plan that includes investments in roads, railways, broadband, clean energy and semiconductor manufacturing. Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman said in a press conference that OPEC+ will raise daily oil production by 350,000 barrels in May, 350,000 barrels in June and by 441,000 barrels in July. Traders were also weighing the data from the U.S. Energy Information Administration that said domestic supplies of natural gas rose by 14 billion cubic feet for the week ended March 26. That compares with an average increase of 19 billion cubic feet forecast by analysts polled by S&P Global Platts.
Bucking US threats, China and Iran sign 25-year treaty – This weekend, Chinese Foreign Minister Wang Yi traveled to Tehran and signed a 25-year treaty with his Iranian counterpart, Javad Zarif. The terms of the treaty were not disclosed. However, US news outlets noted that an earlier draft of the treaty, obtained by US officials and shown to the New York Times, entailed $400 billion in Chinese investment in Iran in exchange for exports of Iranian oil, as well as a strategic alliance. Iranian Foreign Minister Mohammad Javad Zarif, right, and his Chinese counterpart Wang Yi, pose for photos after the ceremony of signing documents, in Tehran, Iran, Saturday, March 27, 2021. Iran and China on Saturday signed a 25-year strategic cooperation agreement addressing economic issues amid crippling U.S. sanctions on Iran, state TV reported. (AP Photo/Ebrahim Noroozi) Beijing is defying economic sanctions imposed by former US President Donald Trump after he unilaterally scrapped the 2015 Iranian nuclear treaty in 2018, and that incoming US President Joe Biden has yet to remove. In February, Biden suddenly bombed an Iranian-backed militia in Syria, killing at least 17 people. Beijing’s decision to sign the treaty with Tehran followed a disastrous US-China summit earlier this month in Alaska. During remarks to the press before summit proceedings even began, US Secretary of State Antony Blinken publicly lectured Wang that China must accept a “rules-based international order” set by Washington, or face “a far more violent and unstable world.” Afterwards, US Pacific Fleet commander Admiral John Aquilino threatened that a US war with China over Taiwan “is much closer to us than most think.” By signing a treaty with Tehran, Beijing is signaling that it has concluded that it must make its own preparations against a Biden administration that will be aggressive and relentlessly hostile. It is no doubt confirmed in this view by continuing, groundless war propaganda from US politicians, debunked by scientists, alleging that COVID-19 was manufactured in a Chinese lab. At the Anchorage conference, Wang replied to Blinken by contrasting China’s commitment to international law with US imperialism’s foreign policy in the Middle East. “We do not believe in invading through the use of force, or to topple other regimes through various means, or to massacre the people of other countries because all of those would only cause turmoil and instability in this world. And at the end of the day, all of those would not serve the United States well.”
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