Oil, Gas, And Fracking News Reads: 18April 2021 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles for the week ending 17 April 2021. Go here for Oil, Gas, And Fracking News Read 18April 2021 – Part 1 (econintersect.com).

This is a feature at Global Economic Intersection every Monday evening or Tueday morning.

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Berkshire Hathaway’s backup power plan for Texas opposed by energy firms — An $8.3 billion idea by Warren Buffett’s Berkshire Hathaway Energy to build 10 new natural gas power plants across the state for emergency use turned into formal legislation Thursday, when the proposal was introduced during a state Senate committee hearing.Berkshire executives, who pitched the plan to lawmakers in the weeks following February’s deadly winter storm, said revenue for the massive project would come through an additional monthly charge on Texans’ power bills.Republican state Sen. Charles Schwertner, R-Georgetown, put forward the legislation, saying it would create “a backstop” of “emergency supply” that would only be tapped when demand on the power grid is so great that the state may beforced into electricity blackouts.”We should look at all options to ensure Texans never have to face the devastation caused by the failure of the electric grid again,” Schwertner said.While Schwertner said Senate Bill 2109 is a starting point and that he welcomed expertise to improve the legislation, more than a dozen energy industry stakeholders testified in opposition to the bill.”This proposal creates an unfair economic advantage, undercutting existing participants that have made the decision to invest in Texas over the past 20 years,” testified Bill Barnes, director of regulatory affairs at energy company NRG, one of the legislation’s opponents. Amanda Frazier, a vice president at Vistra Corp., the largest power plant owner in Texas, said the bill would motivate some older power plants in the state to shut down for good.But Schwertner’s proposal is just one of several bills lawmakers are considering to address issues stemming from the winter storm. The state House has advanced legislation to reform the governance of the grid operator, the Electric Reliability Council of Texas, and the Public Utility Commission that oversees ERCOT. Lawmakers have also advanced legislation improving emergency communications between regulatory agencies and to create an emergency alert system to notify Texans of power outages.

No natural gas bans in state; nursing homes get immunity – Two significant and controversial pieces of legislation became Kansas law Friday. One concerns nursing homes, while the other prohibits natural gas bans.The governor didn’t sign or veto the Energy Choice Act, merely letting it become law. Now, no Kansas municipality can put a ban on the use of natural gas, a result desired by those in the natural gas industry. This comes after fears that cities would have done so after Berkeley, California, put a ban into place in 2019. The city of Lawrence had opposed this bill, as it had committed previously to powering the city with all renewable energy by 2035. With the act now law, it’s going to complicate if not outright stop, that effort.”The path that I’m seeing Kansas take is really shortsighted and morally wrong,” City Commissioner Lisa Larsen told the Lawrence Journal-World. “And if we continue along this path, there is no doubt in my mind that we are going to be on the wrong side of history.”But bill supporters framed it as giving choice to consumers, and they said banning natural gas could lead to less energy competition, meaning higher utility rates.”These local bans will ultimately serve as regressive taxes that hurt low- and middle-income consumers and they will exacerbate energy poverty in our state,” said Americans for Prosperity’s Elizabeth Patton.Those arguments even seemed to have won a couple Democrats over, as the act passed out of the Legislature with veto-proof majorities.

Reynolds signs child care bill, ban on local natural gas laws – Gov. Kim Reynolds on Monday signed a bill increasing the number of children who can be cared for at an unregulated caregiver’s home.House File 260 defines a “child care home” as one that can care for five or fewer children. Also Monday, Reynolds signed House File 555, which bans cities and counties from regulating the sale of propane or natural gas. The Iowa Environmental Council and organizations representing cities and counties opposed the bill, arguing it could expose Iowans to safety threats and higher energy costs. The bill also could impede efforts to shift to alternative energy sources, they said.

Judge: BP’s Indiana refinery violated soot emission limits (AP) – A BP refinery in northwest Indiana repeatedly violated air pollution standards for soot emissions between 2015 and 2018, a federal judge ruled in a lawsuit brought by environmental advocates. U.S. District Judge Philip Simon issued his decision Wednesday. The Sierra Club and the Environmental Integrity Project sued BP in 2019 under the federal Clean Air Act after Indiana officials declined to take formal action against the company and it’s sprawling refinery in Whiting, 15 miles (24 kilometers) southeast of Chicago. Simon based his ruling largely on the results of nine pollution tests the oil giant provided to the Indiana Department of Environmental Management from 2015 to 2018. In eight of the tests, boilers at the refinery released soot concentrations that exceeded permitted limits. BP was legally obligated to fix the violations and retest its emissions but it failed to do so each time, Simon said. Simon has not ruled on whether BP must pay monetary damages. Bowden Quinn, director of Sierra Club Hoosier Chapter, called the ruling a major victory. “Today’s ruling stamps out BP’s profits-over-people approach and ensures it will be held accountable for endangering Northwest Indianans’ health and safety with their dangerous emissions,” Quinn said. A BP spokeswoman said the company is reviewing Simon’s ruling.

AIR POLLUTION: Exxon faces $1.5M fine for alleged violations at Ill. refinery — Tuesday, April 13, 2021 — Federal and state regulators plan to tag Exxon Mobil Corp. with about $1.5 million in fines for alleged environmental infractions at a Joliet, Ill., refinery, according to a pair of court filings today.

U.S. Startup Plans to Build First Zero-Emission Gas Power Plants – A new kind of power plant that doesn’t add greenhouse gases to the atmosphere is being built in the U.S., potentially providing a way for utilities to keep burning natural gas without contributing to global warming. Net Power intends to build two natural-gas power plants in the U.S. that will have all its emissions captured and buried deep underground. The startup licensed its technology to developer 8 Rivers Capital LLC, which will work with agriculture giant Archer-Daniels-Midlands Co. to replace some emissions from a coal power plant in Illinois. For the other plant, 8 Rivers is working with the Southern Ute Indian Tribe Growth Fund in Colorado. Both projects will be designed and developed this year, which 8 Rivers says requires spending tens of millions of dollars. A final decision on whether to go ahead with the facilities is due in 2022. Net Power’s technology uses a new kind of turbine to burn natural gas in oxygen, rather than the air. As a result, the plant only produces carbon dioxide and water as a byproduct. The water can be frozen out of the mixture and the pure stream of COâ‚‚ can be buried in depleted oil and gas wells or similar geological structures. The required oxygen is secured by separating it from the air, which needs energy. But Net Power says its turbine is more efficient so that, on balance, the overall efficiency of the system matches that of an advanced natural-gas power plant that pumps its emissions into the atmosphere. Another upside of using oxygen is that Net Power plants do not produce any nitrogen emissions, which would cause local air pollution. The Illinois power plant will inject its emissions into an already existing COâ‚‚ well, which currently buries emissions from an ethanol production facility. The Colorado plant hasn’t decided where to bury its emissions, but 8 Rivers says that the site of the power plant is close to a COâ‚‚ pipeline which extends the area available for storing the carbon. Though the power plant won’t produce any pollution, environmentalists are concerned about the continued use of natural gas. The production and transportation of the fossil fuel does lead to emissions, which companies that rely on natural gas will have to mitigate. Both plants will have access to a U.S. tax credit that amounts to about $50 for each ton of COâ‚‚ injected into the ground. As in the case of solar and wind power, the credit seeks to subsidize early-stage climate technologies until they can compete with the existing fossil-fuel based incumbents.

BoC asks advocate to go rework and add to Line 5 resolution – The Iosco County Board of Commissioners have asked an advocate who is against Line 5 to make some changes to a resolution before they would consider adopting the measure at a meeting. The resolution would support the state’s decision to revoke Enbridge’s easement at the Straits of Mackinac to operate the Line 5 oil pipeline. This took place during a April 7 meeting of the Iosco County Board of Commissioners Committee of the Whole meeting. Jim Mortimer, who has continually spoke against Line 5, presented the resolution to commissioners. This was after a representative from Enbridge spoke about why having the oil pipeline, which is Canadian owned, shut down would affect Michigan residents negatively. The pipeline extends from Canada through the state, under the lake and then back over to Canada to Sarnia. Critics have cited the potential danger if the line were to breach, releasing petroleum products into the Great Lakes and causing an ecological nightmare. To combat this, the company had applied for permits to construct a tunnel, bored through the rock under the lake, to put the line, but Gov. Gretchen Whitmer has ordered the line closed, the easement revoked, and the operations to cease by May.

Enbridge’s Great Lakes Pipeline Is ‘Nonnegotiable’ for Canada – Enbridge Inc.’s contentious oil pipeline crossing the Great Lakes is “nonnegotiable” for Canada, and Justin Trudeau’s government spoke with U.S. President Joe Biden to defend it. With the Canadian pipeline giant and Michigan Governor Gretchen Whitmer locked in a legal battle over the state’s efforts to decommission Enbridge’s Line 5, Canadian Natural Resources Minister Seamus O’Regan said he has reached out to all levels of government in the U.S. Legislators on both sides of the border have also held over 20 meetings to seek an agreement, he said. He declined to say what Canada would do if a court orders the line to be shut. “We have signaled very clearly that this is nonnegotiable,” O’Regan, 50, said in an interview. “We have made our case extremely clear directly to the President of the United States.” Tensions over cross-border energy projects have cast a shadow over the relationship between Biden and Trudeau. While the two leaders share many of the same values and have pledged to collaborate on the fight against climate change, they remain divided on the role of oil and gas in transitioning to a greener economy. On his first day in office, Biden canceled the permit for TC Energy Corp.’s Keystone XL pipeline, which would have transported over 800,000 barrels a day of crude from oil-rich Alberta to refineries in the U.S. “Line 5 is very different from Keystone XL and we fully support it, and we will defend it,” O’Regan said. “We made our case with Republicans as well as Democrats.” A mediation in the dispute between Michigan and Enbridge is scheduled to start on April 16.

Work underway on natural gas pipeline through Racine County A pipeline to deliver more natural gas to southeastern Wisconsin is cutting a path across Racine County in a project that has temporarily dotted the landscape with green pipeline segments. We Energies is building the 46-mile pipeline to bring enough natural gas to the region to power the equivalent of 77,000 homes during a typical Wisconsin winter day. En route from Whitewater to its destination near Kenosha, the pipeline (using 24-inch pipes) is being installed in an east-west configuration that cuts through the Town of Burlington and City of Burlington, and runs just south of Union Grove. The “Lakeshore Lateral” natural gas pipeline for We Energies will cross about 46 miles, including nine miles in Racine County, where these segments are waiting to be assembled in the Town of Burlington. Although large segments of green pipeline can be seen sitting above ground along the route, crews eventually will bury the pipeline underground. From there, the operation will be largely unseen by the public. “Generally people aren’t going to know that anything was installed,” said Matt Fehler, an operations manager for We Energies. The Milwaukee-based utility company has received approval for the large pipeline project, known as the “Lakeshore Lateral,” from both the state Public Service Commission and the Wisconsin Department of Natural Resources. Work began last year. We Energies expects to have the pipeline completed by the end of 2021. Burlington Town Administrator Brian Graziano said the green pipeline scattered along highly visible areas near Highway 83 and elsewhere has not gone unnoticed by townsfolk. Graziano, however, said he is confident that the project will not cause any major troubles for the town. The DNR gave We Energies permission to clear trees, temporarily disturb wetlands, and to cross more than 20 navigable rivers and other waterways. it would be challenging to complete such an undertaking without temporary disturbance of wetlands or other environmentally sensitive lands. “It would be very difficult, if not impossible,” he said.

Driven by Industry, More States Are Passing Tough Laws Aimed at Pipeline Protesters – When Nancy Beaulieu’s Ojibwe ancestors signed a series of treaties with the federal government in the 19th century, one of the goals was to protect the land, she said. So she sees it as not just her right but her duty to protest the building of a major oil pipeline underway in northern Minnesota.As an organizer for the state chapter of 350.org, Beaulieu has helped lead a campaign against the replacement and expansion of Line 3, which carries oil from Canada’s tar sands to the United States. Advocates say more than 200 protesters have been arrested as part of the campaign, and Beaulieu said she intends to be arrested herself as construction continues this spring.But a bill currently pending in the state legislature threatens her right to do so, by increasing the penalties for trespassing on pipelines and other energy infrastructure.”These are our own lands in some areas, ceded lands. We never gave up the right to hunt, fish and travel. So just because we don’t hold title doesn’t mean we cannot protect. That’s what treaties are all about, is that responsibility,” she said. The Minnesota bill would impose a felony offense carrying up to five years in prison for anyone who enters a pipeline construction site with “intent to disrupt” operations.The legislation is just one of a growing number of such bills, backed by the oil and gas industry, that are pending in at least five states and have been enacted in 15 others over the last four years, according to the International Center for Not-for-Profit Law. While the details vary state by state, the legislation in many cases imposes felony charges for trespassing and “impeding” the operation of pipelines, power plants and other “critical infrastructure.”The bills emerged in 2017 after a pair of stinging losses for the pipeline industry. Activists had used civil disobedience and mass arrests to draw attention to the Keystone XL and Dakota Access projects, and the Obama administration eventually blocked both. States’ critical infrastructure legislation raised the stakes for protesters by increasing penalties for acts like blocking access to a construction site, in many cases converting the offenses from misdemeanors to felonies.Some of the laws include clauses allowing prosecutors to seek 10 times the original fines for any groups found to be “conspirators.” Those bills have prompted concerns on the part of civil liberties advocates and leaders of groups like the Sierra Club, who fear they could be roped into trials and face steep fines for having joined with broader coalitions that include an element of civil disobedience.The nation’s leading oil industry groups have been among the most vociferous advocates of the legislation, and in several states, including Kansas this year, lawmakers have openly introduced the bills on behalf of industry lobbyists. Enbridge, TC Energy and Energy Transfer – the companies behind Line 3, Keystone XL and Dakota Access pipelines – have been some of the most active corporations lobbying for the legislation along with Marathon Petroleum, according to Connor Gibson, an independent researcher who has tracked the bills for Greenpeace.

Enbridge taps new approach for pipelines – Indian Country Today –It’s the dead of winter in Minnesota, and the woman’s footsteps make a distinctive crunching sound as she walks down a snow-covered road. She and others are conducting an Ojibwe pipe ceremony along the Mississippi River, offering a ground blessing and prayers for the safety and health of people working on Enbridge’s Line 3 pipeline project. The pipe is loaded with tobacco, and people smudge themselves with burning sage. The scene – a traditional ceremony considered sacred by Ojibwe – is captured on a video posted on Enbridge’s website as an example of the company’s commitment, respect and connection to Native peoples and the lands affected by the Line 3 project. “I’m very honored to work with Enbridge,” says the woman, identified in the video only as Diane, a citizen of the Leech Lake Band of Ojibwe. “They want to do it the right way. They’re looking at our culture, and how to be respectful to the land and the people.” Enbridge’s use of the video – and the company’s extensive promotion of its programs and efforts to engage the Native community – is an example of a burgeoning business model called corporate social responsibility, experts say. “Their approach seems to be to get buy-in without affecting their bottom line.” What isn’t apparent in the video is that Diane was pilloried on social media for supporting the multibillion-dollar Line 3 project, which has divided Natives and non-Natives alike. Nancy Beaulieu, a citizen of the Leech Lake Band of Ojibwe, told Indian Country Today she was astonished by the video. “This is a dishonor to our culture,” she wrote on Facebook. “No tribal elected officials, no spiritual leader, no tribal members in attendance, just ‘Diane’ who says she likes working for Enbridge, and a few other Natives.” Daniseton Vendiola, of the Swinomish Indian Community, posted similar sentiments. “This is what you call MEDIA MANIPULATION,” he wrote on Facebook, “where a corporation tries to trick the community into thinking they are inclusive and considerate but are really showboating and exploiting to attain their means.” There are no official rules for using sacred Ojibwe items such as the pipe. There is no bible or handbook, or official process for sanctioning their perceived misuse. Through unspoken understanding, however, Ojibwe people are protective of their traditional spirituality and ceremonies. It’s unusual to see a video of an Ojibwe pipe ceremony shared publicly on the internet; many consider it unseemly.

HOUSE: Republicans warn about slippery slope on pipelines — Wednesday, April 14, 2021 — House Republicans warned yesterday that motivations behind the White House’s action to cancel the controversial Keystone XL pipeline have the potential to affect other pipeline networks caught in the midst of environmental backlash.

KXL Pipeline developer presses land acquisition despite federal block on project — Progress on the Keystone XL Pipeline halted in January due to a presidential order. Still, the Canadian developers are moving forward with plans to secure rights to lay pipe across private land. Earlier this year, TC Energy called the attorney representing 65 Nebraska landowners and let them know they intended to move forward with eminent domain proceedings to use their property to build the tar sands oil pipeline. Notice of the plans to hold on to the property rights came in a phone call from the company’s lawyers to Brian Jorde, the attorney representing 65 hold-out landowners. Jorde told NET News his clients were “pretty frustrated, upset and wondering why the state of Nebraska isn’t stepping in to stop this. With an executive order, President Biden withdrew permits allowing the pipeline to cross the border with Canada. TC Energy, formerly TransCanada, announced it would suspend plans to start laying pipe. It did not disclose it was continuing to move forward with acquiring the last remaining property rights along the 270-mile Nebraska route. “It means they’re still fighting this battle,” Jorde said. “They’re still defending themselves, incurring costs for an easement that’s supposed to apply to a project that is, at this point, null and void.” In Jorde’s interpretation, the Nebraska law regulating pipelines may not explicitly cover the question of what happens if a project can no longer proceed after being authorized by state regulators. For the landowners, in Jorde’s view, the vagueness in law combined creates an added layer of uncertainly about the future of the KXL pipeline and the company’s intentions.”What could happen is TransCanada, to make a quick buck, could sell or flip the easement,” and sell off the project or the pipeline subsidiary to another company. “All of a sudden, the landowner, for the rest of time, will be dealing with someone that they never got to size up (and) never had to say no.”

Settlement with Merit Energy resolves violations of oil pollution – The U.S. EPA announced a proposed settlement with Merit Energy Company of Dallas, Texas, resolving alleged violations of the Clean Water Act.As a result, Merit is implementing regulations meant to prevent oil pollution, according to EPA.The violations include failure to comply with spill prevention, control, and countermeasure (SPCC) requirements at a tank battery facility operated by the company in Hot Springs County, Wyoming. The proposed agreement results in Merit agreeing to pay a civil penalty of $115,000 to resolve the alleged violations, according to EPA.The $115,000 penalty will be deposited into the Oil Spill Liability Trust Fund, which is a fund used by federal agencies to respond to discharges of oil and hazardous substances, according to EPA.”Due to the harm oil spills can cause to public health and the environment, every effort must be made to prevent oil spills and to clean them up promptly once they occur,” said the EPA Region 8 Enforcement and Compliance Assurance Division Director Suzanne Bohan, according to EPA. “We are encouraged by Merit’s actions to come into compliance with the laws and regulations that protect the environment from the damages that can occur when oil is discharged into navigable waters or adjoining shorelines.”The proposed settlement is a result of EPA’s investigation of an oil spill that occurred on June 19, 2018. The settlement alleges that Merit released approximately 455 barrels of crude oil from the Stateland Tank Battery Facility into Grass Creek, a tributary of the Big Horn River, reported EPA. After reviewing the spill, EPA discovered deficiencies in Merit’s SPCC plan for the facility and since the violation and the company has since submitted an updated plan to EPA. The Oil Pollution Prevention requirements of the Clean Water Act aim to prevent and facilitate the response to the discharge of oil from non-transportation-related onshore facilities, according to EPA. All facilities with 1,320 gallons of oil that have the potential for a spill to reach waters of the U.S. are required to have an SPCC Plan.

Fracking Lies & Greed Lead To Oil & Gas Spills On Native Lands (Video) – Fracking is another in a long list of incalculable losses that native peoples across North America have suffered. In the last decade alone, the US EPA stripped nearly 40 tribes of their ability to make fundamental decisions regarding fracking, agricultural pollution, and the dumping of toxic waste on their own lands.Two recent accidents on tribal land account for just 1% of oil- and gas-related incidents in northwestern New Mexico in 2019, according to statistics kept by the New Mexico oil conservation division (OCD). Since those two, there have been another 317 accidents in the region, including oil spills, fires, blowouts, and gas releases. There were 3,600 oil and gas spills over the previous decade, both smaller and larger. A land infused with centuries of indigenous history is now dotted with oil and gas wells, resembling more of an industrial landscape that a testimonial to the human-nature interface. Accident sites seem to evade the attention of the US Bureau of Land Management (BLM) and the Bureau of Indian Affairs (BIA), which, according to tribal members, hasn’t listened to their concerns about drilling in the area. A rectangular grid of private lands, federal lands, and Navajo Nation off-reservation trust lands are managed by the BIA on behalf of the Navajo and represents a clash of differing jurisdictions, rules, and interests. That frustration has touched off dozens of lawsuits – and more to come if the pattern doesn’t change. The tribes and environmental groups are looking to Interior Secretary Deb Haaland – a member of the Laguna Pueblo tribe – and her efforts to protect the Chaco area in order to gain a greater voice in federal oil, gas, and mining decisions. The most recent wave of drilling started around 2009 when land agents called Navajo families to the Chapter house to sign leases for the oil beneath their homes. The families were thrilled by the signing bonus. What they didn’t know is that their land sat atop vast oil resources. “When you have more than 70% unemployment and you have more than 70% of the population living in abject poverty, you can’t fault them for signing,” Daniel Tso, chairman of the health, education and human services Committee of the Navajo Nation Council, says., In February 2019, a burst water line went unnoticed due to its remote location. By the time the situation could be remedied, more than 1,400 barrels of fracking slurry mixed with crude oil had drained off the wellsite owned by Enduring Resources and into a snowy wash. Almost 59,000 gallons of the slurry flowed more than a mile downstream toward Chaco Culture national historical park. This network of historic archaeological sites holdsUnesco world heritage status and is of spiritual importance to Navajo and Puebloan people in the region. “To a non-indigenous person, they [are] ruins. But to an indigenous Pueblo person, they’re still active sites that are used in spiritual ways,” said Julia Bernal, the environmental justice director at the Pueblo Action Alliance, an indigenous sustainability organization formed in the wake of Standing Rock. “The fight has constantly been, ‘These are sacred sites.’ But the non-indigenous power is like, ‘Well prove to us these are sacred sites.’ How can we prove that when it’s our beliefs?”

Groups seek federal oil and gas leasing reform » As a public comment period on the federal mineral leasing program draws to a close today, Thursday, environmental and Indigenous groups in New Mexico’s oil- and gas-producing communities are seeking a complete overhaul of the system. Julia Bernal, a Sandia Pueblo member and Pueblo Action Alliance director, said during a panel discussion Wednesday that previous administrations had “gone off the rails” in leasing on culturally significant areas near Chaco Culture National Historical Park. “Meaningful tribal consultation hasn’t been fulfilled, nor has it been respected,” Bernal said. “Resource management plans should have tribal governments at the initial planning processes as the Indigenous nations in New Mexico have a large stake in how our water and land is managed.” President Biden ordered a pause on new fossil fuel leasing on federal lands in January. Interior Secretary Deb Haaland said the pause allows for a careful review of a program that operated under an “act now, think later” approach for the past four years. “In order to tackle the climate crisis and strengthen our nation’s economy, we must manage our lands and waters and resources, not just across fiscal years, but also across generations,” Haaland said during a March forum. The majority of New Mexico’s oil production occurs on public land. The industry contributes about 40% of the state’s general fund revenue. New Mexico wells produced a record 366.6 million barrels of oil in 2020, despite the pandemic. The Rev. Gene Harbaugh, a retired Presbyterian minister and member of Carlsbad-based Citizens Caring for the Future, said the government should consider long-term local impacts of the boom-and-bust cycle. “Short-term economic gains from the extraction industry have resulted in housing and educational and infrastructure problems that will have to be faced long after the man camps and the traffic has gone silent,” Harbaugh said. Gov. Michelle Lujan Grisham’s administration has finalized, or is developing, new industry regulations to address climate change. New rules include water use reporting requirements, and a ban on routine venting and flaring of natural gas. Interior will release a report this summer with recommendations for natural resource management on federal land.

February’s blackouts caused North Dakota oil output to fall | State & Regional – North Dakota’s oil production dropped in February beyond what state officials had anticipated due to cold weather that forced rolling blackouts in the Bakken. The state’s daily oil output fell 6% to 1.083 million barrels per day that month, according to data released Thursday. Natural gas production fell 5% to 2.703 billion cubic feet per day. Official state oil and gas figures lag several months as officials gather data. The blackouts came about when a blast of cold weather hit the southern United States, stressing the Southwest Power Pool grid, which delivers electricity up the middle of the country all the way to North Dakota. The grid operator ordered rolling blackouts in North Dakota and other states to avoid bigger problems elsewhere on its system. State Mineral Resources Director Lynn Helms said that caused gas plants and related infrastructure to go offline for hours at a time. Some oil wells also stopped operating. “People got very little warning,” he said. More recently, wildfires have plagued western North Dakota amid dry weather. Helms said they have not caused any problems for the oil and gas industry, though flares at oil wells started a few fires. That can happen in high wind, which causes the flame to touch down on grass. None of those fires caused any major damage, and they were put out quickly before growing very large, Helms said. North Dakota continues to meet its flaring target, though the percentage rose slightly in February. Statewide, 8% of all gas produced was wastefully flared that month. The target set by state regulators aims to keep flaring within 9%. Flaring occurs when an oil well is not connected to pipelines and processing plants, or when that infrastructure is down or already at capacity.

US will allow Dakota Access oil pipeline to operate during review – The $3.8 billion Dakota Access pipeline can continue to operate while the U.S. Army Corps of Engineers completes its environmental review of the project, likely to take until March 2022, but the question of a shutdown remains on the table. At an April 9 hearing, a U.S. Justice Dept. attorney told Brian Boasberg, U.S. district court judge in Washington, D.C. that the Corps doesn’t plan to shut down the 1,172-mile pipeline, which starts in North Dakota and ends in southern Illinois. But it could change its mind after consulting with officials from tribes and North Dakota. The pipeline moves more than half a million gallons of crude oil daily. It crosses Lake Oahe, which the Standing Rock Sioux rely on for drinking water. Department attorney Ben Schifman said the Corps wants to take stakeholder’s views into account before it decides, saying the agency is in a continuous process of evaluating the safety of the pipeline. He added the Biden administration could shut down operations at any time before the Corps completes an Environmental Impact Statement for the project. The pipeline has been operating for about three years. In a complicated case that has gone on for years, Boasberg ordered an immediate shutdown of the pipeline in 2020. The federal appeals court in Washington, D.C. overruled him but agreed the Corps violated federal law in 2016 when it issued permits for the pipeline to cross beneath the Missouri River. The EIS will study the risk that an oil spill poses to the Standing Rock Sioux and will decide whether to reissue the permit or require an alternative route that mitigates risk to the tribe. In 2015 the Corps issued a draft environmental assessment finding construction would have no significant environmental impact. Both the U.S. Dept. of Interior and the U.S. Environmental Protection Agency raised concern the assessment lacked significant analysis of the impact on water resources. The Corps decided in January 2017 to prepare an EIS, but the Trump administration directed the agency to expedite approvals and reconsider that decision. In February 2017, the Corps granted the easement for the pipeline to travel under the lake without the complete EIS.Jan Hasselman, an EarthJustice attorney representing the Standing Rock Sioux, expressed disappointment that Boasberg didn’t order a shut down. Tribes and environmental groups were dismayed by Biden’s decision not to shut down the pipeline given his climate platform. But he said they would ask the judge “to shut the pipeline down under a judicial standard. We will continue this fight for as long as it takes.” According to Hasselman, in a press conference after the hearing, the Corps shut out the tribes and their cultural experts in developing the original environmental review. “It’s critical that the Corps take the time to engage with tribes as sovereign nations to make sure the decision is fully informed,” he said. Meanwhile, two ranking House and Senate Republicans urged President Joe Biden to allow the Corps to issue nationwide project water crossing general permits for those “with limited environmental impact,” in an April 7 letter, as the administration reviews the project-wide permits that face new opposition and legal challenges.

Biden Refuses to Shut Down Dakota Access Pipeline, Despite Campaign Pledges on Tribal Relations and Climate – Indigenous leaders and climate campaigners on Friday blasted President Joe Biden’s refusal to shut down the Dakota Access Pipeline during a court-ordered environmental review, which critics framed as a betrayal of his campaign promises to improve tribal relations and transition the country to clean energy.”Biden’s inaction to protect our fragile ecosystems, natural resources, traditional medicines, and Indigenous rights is a clear sign that this administration is the exact opposite of the climate leadership narrative they promised to lead during his campaign,” said Tasina Sapa Win Smith of the Cheyenne River Grassroots Collective.Brooke Harper, campaign strategist for the environmental group 350.org, declared that “the Biden administration missed a huge opportunity today to take a step towards ensuring a livable future for everyone in this country.””The Dakota Access Pipeline violates treaty rights and endangers land, water, and communities,” Harper said. “The climate crisis is here; we can no longer afford to build polluting, dangerous fossil fuel pipelines and delay a just transition to 100% clean energy. In solidarity with Indigenous water protectors, we call on President Joe Biden to stop the Dakota Access pipeline, Line 3, and all new fossil fuel projects immediately. If Biden wants to be a climate leader on the world stage, he needs to start at home.” U.S. District Judge James Boasberg, who ordered the environmental impact assessment last year, held a hearing Friday afternoon so the U.S. Army Corps of Engineers could provide an update on whether the Biden administration planned to allow the pipeline known as DAPL to continue operating without a federal permit.After Ben Schifman, an attorney for the government, shared that the Army Corps of Engineers would not shut down the pipeline at this time but “is essentially in a continuous process of evaluating,” Boasberg granted the 10-day continuance. The DC-based judge is expected to decide whether he will order DAPL to shut down by April 19. Indigenous water protectors and environmentalists have been fighting against the pipeline for years – opposition that’s been met with forceful crackdowns by private security and law enforcement. Since it began operating in 2017, DAPL and the communities through which it runs have been plagued by repeated leaks. Dozens of Democrats have recently joined with tribal leaders and climate activists in calling on Biden to order a shutdown. Chairman Mike Faith of the Standing Rock Sioux Tribe said Friday that “we are gravely concerned about the continued operation of this pipeline, which poses an unacceptable risk to our sovereign nation.” “In a meeting with members of Biden’s staff earlier this year, we were told that this new administration wanted to ‘get this right,'” Faith noted. “Unfortunately, today’s update from the U.S. Army Corps of Engineers shows it has chosen to ignore our pleas and stick to the wrong path.”

Dakota Access Pipeline Seeks to Scrap Environmental Review Order -Dakota Access pipeline lawyers are urging a federal appeals court to reconsider a recent ruling against the divisive oil project.Lawyers for the Energy Transfer LP line on Monday petitioned for rehearing before all active judges on the U.S. Court of Appeals for the District of Columbia Circuit, asking them to toss a three-judge panel’s January decision that said a critical easement violated the National Environmental Policy Act.The Biden administration granted Dakota Access a reprieve April 9, announcing it wouldn’t, for now, require the pipeline to shut down during a court-ordered environmental review. The pipeline company’s rehearing request targets the underlying legal conclusions that prompted the review.A federal district court last year said the Army Corps of Engineers violated NEPA by foregoing an environmental impact statement when it granted an easement for Dakota Access to cross part of the Missouri River. The agency should have done the in-depth analysis, rather than the narrower environmental assessment it performed, in light of expert disagreement over the impacts of a potential oil spill on nearby Indigenous tribes and resources, a judge ruled. The D.C. Circuit affirmed the ruling in January.The panel’s decision “impermissibly transforms NEPA from a procedural statute into one requiring particular results, and is inconsistent with decisions from the Supreme Court and other circuits,” Gibson, Dunn & Crutcher LLP attorney Miguel A. Estrada, representing Dakota Access, told the appeals court Monday.The D.C. Circuit rarely grants rehearing. Dakota Access is facing separate but related proceedings in district court, where the Standing Rock Sioux Tribe and other opponents have asked a federal judge to issue a shutdown order. The case is Standing Rock Sioux Tribe v. Army Corps of Engineers, D.C. Cir., No. 20-5197, petition for rehearing filed 4/12/21.

Corps stalls on Dakota Access shutdown decision; matter likely falls to judge – Whether the Dakota Access Pipeline can keep operating during a lengthy environmental review remains an open question following a court hearing April 9, in which the U.S. Army Corps of Engineers said it was in a “continuous process of evaluating” the situation. The Corps was expected to say whether it would force the pipeline to stop pumping oil temporarily, but that decision will likely now fall to a federal judge overseeing the pipeline litigation. U.S. District Court Judge James Boasberg said he was “surprised” by the announcement from the Corps, adding that he “would have thought there would be a decision one way or another at this point.” He had granted the agency more time to brief incoming Biden administration officials on the matter ahead of the court hearing. Jan Hasselman, an attorney for the Standing Rock Sioux Tribe whose reservation lies just downstream of the pipeline’s Missouri River crossing, said the tribe is “deeply disappointed.” “The decision today is to continue to let it operate, which is the same decision as the previous administration,” he said. “The pipeline is going to keep operating, exposing the tribe and its members to the risk of a disaster while the Army Corps studies what those risks are.” The Corps has been weighing whether to shut down the pipeline for eight months, ever since a federal appeals court upheld part of a ruling revoking the easement for the pipeline’s river crossing. Boasberg rescinded the permit last summer while the Corps conducts a court-ordered study that will go more in-depth into environmental issues surrounding the pipeline than previous work. The review began last September and is expected to take until March 2022, an attorney for the Corps said.

DAPL closure could shut 400,000 bpd of N. Dakota oil output -state official (Reuters) – The state of North Dakota could see 400,000 barrels a day of crude oil production temporarily wiped out if the Dakota Access Pipeline (DAPL) is shut, a state official said on Thursday. Energy Transfer LP ET.Nis in the middle of a years-long legal fight to keep open its 557,000-barrels-per-day pipeline, the largest out of the Bakken shale region of North Dakota and Montana, as U.S. officials conduct an environmental review of the line. If the U.S. district court judge considering the case orders DAPL to cease flows, multiple wells in the second-biggest crude oil state would be shut, North Dakota Department of Mineral Resources Director Lynn Helms said at a monthly briefing. “That would at least (lead) to some temporary shut-ins while people arranged alternate transportation,” Helms said. North Dakota, which has seen its oil production plunge more than 30 percent to about 1.08 million barrels per day since its peak in November 2019, depends on DAPL to carry oil to the Midwest and then on to the U.S. Gulf Coast. Roughly 40% of the state’s production is moved on the line, Helms has previously stated, and said it would take time for shippers on DAPL to find alternative routes for getting their oil to market.

Big Oil Fed Educators Stats to Push Back on Biden Climate Goals –For years, Big Oil has cozied up to American public schools – and now they seem to be cashing in their chips. New emails appear to show that some elected officials in charge of public schools may have been helped in attacking the Biden administration’s recent decision to pause oil and gas leasing on federal land by powerful oil industry lobbying groups. The emails, obtained by the watchdog group Accountable.us as part of a public records request, are exchanges from late January of this year between Kirsten Baesler, the superintendent of public schools in North Dakota, and two members of the North Dakota Petroleum Council, an industry advocacy group in the state.”Ron wanted me to send you some ND stats on oil impacts,” the first email from Kristen Hamman, the director of regulatory and public affairs at the North Dakota Petroleum Council, reads, referencing Ron Ness, the group’s president, who is also cc’ed. In the email, Hamman listed a series of statistics and employment numbers on the oil and gas industry in North Dakota and Wyoming. A little over two weeks after that exchange, on Feb. 16, Baesler joined four other state superintendents from Alaska, Utah, Montana, and Wyoming (the former two are governor-appointed while the latter two are elected like North Dakota’s) in penning a letter to the Biden administration. Their letter was in protest of, curiously for five educators, the administration’s decision to ban fossil fuel leasing on federal lands. The letter described the five states as dependent “on revenues from various taxes, royalties, disbursements, and lease payments to fund our schools, community infrastructure, and public services,” and goes on to list statistics about fossil fuel money and education – using some of the same statistics and numbers sent to Baesler by the North Dakota Petroleum Council.The North Dakota Petroleum Council, the organization’s website states, is partially sponsored by the American Petroleum Institute, the oil and gas industry’s biggest lobbying organization in the U.S. Around the time when the North Dakota Petroleum Council emailed Baesler, API was busy promoting various pieces of the same information on Facebook. API, of course, recently made headlines for coming out in support of a carbon tax, part of a seemingly industry-wide push to present itself as greener and carbon-free.”Oil and gas executives love to talk about working with the Biden administration to address climate change, but these documents show behind closed doors they are actively working to undermine that very effort,” said Kyle Herrig, president of Accountable.US, in a press release.

Former Secretary of State Pompeo to speak at North Dakota oil conference Former U.S. Secretary of State Mike Pompeo is set to headline a major oil conference in Bismarck next month. The North Dakota Petroleum Council announced on Monday, April 12, that Pompeo will speak on May 13, the final day of the trade group’s Williston Basin Petroleum Conference. Pompeo, who previously led the CIA and served as a Republican congressman from Kansas, worked as the president of an oilfield services company before entering the national political scene. Former Republican President Donald Trump appointed Pompeo to the country’s top foreign policy-making post in 2018 and he remains popular with Trump’s loyal supporters. Widely rumored to be considering a run for president in 2024, Pompeo is a controversial figure nationally, taking heat from Democrats and political observers for failing to acknowledge that Trump had lost his bid for reelection last year. “(Pompeo) has an energy background and understands the important role our domestic energy industry plays in supporting our national security,” said Ron Ness, the council’s president. “We look forward to hearing an encouraging message about the value of American energy to the world.” More than 70 speakers will take the stage during the three-day conference, including executives from oil giant ConocoPhillips and Dakota Access Pipeline operator Energy Transfer, according to a news release from the council.

California Senate Fails to Advance Fracking Ban Bill – A bill that would have banned fracking in California died in committee Tuesday.The bill, SB467, would have prohibited fracking and other controversial forms of oil extraction. It would also have banned oil and gas production within 2,500 feet of a home, school, hospital or other residential facility. The bill originally set the fracking ban for 2027, but amended it to 2035, The AP reported.”Obviously I’m very disappointed,” State Sen. Scott Wiener (D-San Francisco), one of the bill’s two introducers, told the Los Angeles Times. “California really has not done what it needs to do in terms of addressing the oil problem. We have communities that are suffering right now, and the Legislature has repeatedly failed to act.”The bill was introduced after California Gov. Gavin Newsom said he would sign a fracking ban if it passed the legislature, though his administration has continued to issue permits in the meantime, Forbes reported. Newsom has also spoken in favor of a buffer zone between oil and gas extraction and places where people live and learn, according to the Los Angeles Times. The latter is a major environmental justice issue, as fossil fuel production is more likely to be located near Black and Latinx communities.Urban lawmakers who want California to lead on the climate crisis supported the bill, while inland lawmakers in oil-rich areas concerned about jobs opposed it. The oil and gas industry and trade unions also opposed the bill. This opposition meant the bill failed to get the five votes it needed to move beyond the Senate’s Natural Resources and Water Committee. Only four senators approved it, while Democrat Sen. Susan Eggman of Stockton joined two Republicans to oppose it, and two other Democrats abstained.Eggman argued that the bill would have forced California to rely on oil extracted in other states. “We’re still going to use it, but we’re going to use it from places that produce it less safely,” Eggman told The AP. She also said that she supported the transition away from fossil fuels, but thought the bill jumped the gun. “I don’t think we’re quite there yet, and this bill assumes that we are,” she added.Still, California’s fossil fuel industry is at odds with state attempts to position itself as a climate leader. “There is a large stain on California’s climate record, and that is oil,”

California bill to ban fracking dies, but other oil regulation measures win votes A tough bill that would have banned oil and gas production across California and required a 2,500-foot buffer between drilling sites and schools, home and playgrounds died in a committee vote in Sacramento on Tuesday. Senate Bill 467 by Sen. Scott Wiener (D-San Francisco) and Sen. Monique Limon (D-Santa Barbara) failed to muster the five votes needed to move it out of the Senate Natural Resources and Water Committee. Wiener decried the lack of a statewide public health buffer as “a stain” on California’s vaunted global environmental reputation, noting even oil-friendly Texas has one. “In California it is legal to drill next to someone’s home and that is indefensible. And when Texas has setbacks and California doesn’t, I think that speaks volumes,” said Wiener. “No offense to Texas.” But three other bills to tackle the state’s aging oil industry and its long-troubled top industry regulator all advanced, including one by Limon that would raise to $100 million the required industry funds for plugging and abandoning tens of thousands of idle wells. An expert study concluded last year that as much as $5 billion might be needed, and Limon and others said they don’t want taxpayers stuck footing the bills. A pair of bills by Sen. Henry Stern (D-Los Angeles) that would require more transparency by the state’s top oil regulator and digital production records from oil companies – and mandate that unionized California workers (rather than out-of-state workers) be hired to shut down old wells – also won the required votes. All will face more scrutiny in other committees and both houses of the legislature. Still, the divergent votes at a critical stage of bill-making show the might of California organized labor tied to energy production – particularly the Building and Construction Trades Council, which represents 450,000 workers across the state. One by one, representatives of carpenters, ironworkers, steelworkers and other locals stood in the committee chambers or phoned in to “stand in support of the Building Trades Council” and Stern’s hiring bill. Sen. Shannon Grove (R-Bakersfield) voted no on all the bills, saying thousands of in-state employees working for non-union small companies or private contractors had lost their jobs due to previous organized labor agreements, and Kern County and the state already have stringent environmental regulations of the petroleum industry. She switched from polite but pointed questions to a harsh one-two punch against the public health buffer and the hiring bill shortly before the votes were called. “I do not think your bill is as big a threat. It doesn’t have a chance in hell of passing,” she told Wiener. “But SB 419 (Stern’s union hiring bill) will destroy thousands of local jobs, particularly in Kern County.”

Appeals court backs drilling protections reinstated by Biden –A U.S. appeals court on Tuesday affirmed an earlier decision upholding Obama-era standards for Arctic Ocean and Atlantic Ocean protections. In an April 2017 executive order, then-President Trump unwound the Obama administration’s permanent ban on offshore gas and oil drilling in the oceans. But in 2019, the U.S. District Court for the District of Alaska ruled in favor of a coalition of conservation groups, finding that the Trump administration had overstepped its authority with the rollback. Plaintiffs in the case included the groups Earthjustice, the Natural Resources Defense Council, the Northern Alaska Environmental Center, Resisting Environmental Destruction on Indigenous Lands, the Sierra Club and The Wilderness Society. In its Tuesday order, the U.S. Court of Appeals for the 9th Circuit upheld an earlier decision by the U.S. District Court for the District of Alaska, noting that the Biden administration had issued an executive order revoking the Trump order. “We lack jurisdiction to consider ‘moot questions … or to declare principles or rules of law which cannot affect the matter in issue in the case before [us],'” the ruling states. “Because the terms of the challenged Executive Order are no longer in effect, the relevant areas of the OCS [outer continental shelf] in the Chukchi Sea, Beaufort Sea, and Atlantic Ocean will be withdrawn from exploration and development activities regardless of the outcome of these appeals.” “We welcome today’s decision and its confirmation of President Obama’s legacy of ocean and climate protection. As the Biden administration considers its next steps, it should build on these foundations, end fossil fuel leasing on public lands and waters, and embrace a clean energy future that does not come at the expense of wildlife and our natural heritage,” Earthjustice said in a statement. “One obvious place for immediate action is America’s Arctic, including the Arctic Refuge and the Western Arctic, which the previous administration sought to relegate to oil development in a series of last-minute decisions that violate bedrock environmental laws.”

U.S. boosts oil exports to Canada -Canada’s crude oil imports fell by 20 percent in 2020 due to lower demand in the pandemic, but the United States further cemented its position as top oil supplier to Canada, supplying nearly four out of every five barrels of oil, the Canada Energy Regulator said on Wednesday. Canada is a major crude oil producer and exports much more oil than it imports, almost exclusively to the United States. Yet, Canada imports oil from abroad to feed refineries in its Atlantic Provinces, Quebec, and Ontario. “Less than one third of Canadian crude oil is processed by Canadian refineries for a variety of reasons, such as lack of pipeline access to domestic supplies, specific product requirements of refineries, or because it costs less to import,” the regulator said in its analysis.Last year, total Canadian crude oil imports plunged by 20 percent annually to 555,000 barrels per day (bpd), down from 693,000 bpd in 2019, because the pandemic crushed demand for fuels. As imports dropped in volumes, the share of imports from the United States jumped to 77 percent of all imports in 2020 from 72 percent in 2019.The second-biggest oil supplier to Canada was the world’s top oil exporter, Saudi Arabia, with a 13-percent share of Canadian oil imports, followed by Nigeria with 4 percent of imports and Norway with 3 percent, the Canada Energy Regulator said.”The source for Canada’s crude oil imports has changed dramatically over the past decade. The United States has moved from a bit player in 2010 to a major supplier today, with the majority of oil imported into Canada coming from our southern neighbour,” Darren Christie, Chief Economist at the Canada Energy Regulator, said in a statement.

Argentinas Pampa to start producing Vaca Muerta oil – Pampa Energia, the fifth-biggest natural gas producer in Argentina, is taking its first steps to produce oil from the Vaca Muerta shale play while also stepping up gas output on a bet that a rise in domestic and export demand and prices will improve profits, Horacio Turri, the company’s executive director of hydrocarbons, said April 14. Its first exploratory oil well in Rincon de Aranda, a block in Vaca Muerta’s oil window, has shown “very promising signs,” In March, Pampa said it plans to boost its gas production 28% to 9 million cubic meters/day this winter – June to August – from 7.1 million in winter 2020 after winning a contract to deliver the supplies at an incentivized price of $4.68/MMBtu. The higher price – up from less than $2.50/MMBtu in 2020 – stems from a 2021-24 stimulus program designed to rebuild production from a slump over the past year and a half from low prices. The government wants to eventually do away with imports and increase exports, now going to neighboring countries in small amounts. The challenge is to revert the decline first. Gas output fell 21% to 114.5 million cu m/d in February from a most recent peak of 144.4 million cu m/d in July 2019, according to the latest Energy Secretariat data. This has led the government to hire a second regasification terminal to boost LNG imports this winter, and there are expectations that imports will rise starting this year from an average of 19.9 million cu m/d in 2020 when production averaged 123.2 million cu m/d. Argentina consumes an average 140 million cu m/d. In the near term, companies can fill 7 million to 8 million cu m/d of spare capacity in the pipelines out of Vaca Muerta during winter to reduce the imports, but for longer-term growth, a new pipeline must be built, a project that the government shelved last year as the coronavirus pandemic and Argentina’s financial crisis deterred bidders in an already-delayed auction. Turri expects that the government will revive the $2 billion project in the next few months given that the country’s financial crisis is ebbing and the economy is rebounding from a slump last year. This will improve the possibility of companies securing financing to build the 1,000-km line with a full capacity for moving 40 million cu m/d, probably built in two stages. To prepare for sales growth, Pampa is investing $50 million to build a 4.8 million cu m/d treatment plant by the end of this year at El Mangrullo, its most productive gas field. This project, along with the expansion of other facilities, will boost its production capacity from the field to 9 million cu m/d from a current 5.2 million, Turri said. Most of the production is coming from tight plays, with five more wells planned for drilling and five for completions in El Mangrullo, plus another well to be drilled and four completed in Sierra Chata, its second-most-productive block.

Failed fitting caused oil spill – A Transportation Safety Board report says the failure of a fitting on a section of narrow tubing at a Trans Mountain pumping station in British Columbia was the cause of a crude oil spill last year.The investigation report into the spill on June 12, 2020, at the Trans Mountain Sumas pump station in Abbotsford confirms as much as 190,000 litres of crude, roughly 1,200 barrels, leaked when the fitting separated on the one-inch tube.A board report released Tuesday says tests show the compression fitting was not properly tightened when it was installed in 2015 on a tube that carries a small amount of oil to a section of the pump station for analysis.The pipeline was shut down within an hour of the spill at Trans Mountain’s control centre in Edmonton, but the report says it took another four hours to find and manually close valves to the tube, spilling oil into a culvert, the water table and a neighbouring agricultural field.No one was hurt and no evacuation was ordered, but the safety board report says a “multi-year remediation plan” will be needed to recover contaminants in the area surrounding the pump station.

Total signs key deals for Ugandas Lake Albert project –Total said today that first crude exports from the long-delayed Lake Albert project are planned for 2025, after key final agreements needed to develop two oil fields in Uganda and a pipeline to Tanzania were signed yesterday. The two countries signed the agreements with Total and China’s state-controlled CNOOC. “Uganda, Tanzania and oil firms Total and CNOOC [yesterday] signed the agreements that will kickstart the construction of a $3.5bn crude pipeline to help ship crude from fields in western Uganda to international markets,” the Petroleum Authority of Uganda (PAU) said. “This implies that signatories have now agreed to start investment in the contruction of infrastructure that will produce and transport oil”.The deal, which includes the shareholders’ agreement for the pipeline between the two countries, and the tariff and transportation agreement to ship crude through it, will pave the way to award the main engineering, procurement and construction contracts, according to Total.The project involves developing the Kingfisher and Tilenga fields in Uganda’s Lake Albert basin with a central processing facility, with production planned to plateau at a combined 230,000 b/d. Upstream partners comprise Total with 56.67pc, CNOOC with 28.33pc, and Uganda’s state-owned oil company UNOC with 15pc. Total acquired London-listed Tullow Oil’s stake in the project in November and will operate the Tilenga field, while CNOOC will operate Kingfisher.The heated East African Crude Oil Pipeline (EACOP) will transport around 216,000 b/d of Ugandan crude to the Tanzanian port of Tanga, while the rest will be used as feedstock for a proposed domestic refinery at Hoima, set to be completed in 2024. Total, UNOC, CNOOC and Tanzania’s state-owned TPDC are shareholders in the pipeline. Ugandan energy ministry commissioner Frank Mugisha told Argus last month that Total will raise around $2.5bn in international finance to support its share of pipeline construction costs.

ExxonMobil temporarily slashes output at Liza-1 project – ExxonMobil has reportedly reduced production output at its Liza-1 project offshore Guyana by at least 75% after it detected problems with the gas compressor. Production has been temporarily reduced from 120,000 barrels per day (bpd) to 30,000bpd in order to maintain gas injection and fuel gas to the power generators, as well as to reduce flare. The US-oil giant company said it encountered a problem with the compressor’s discharge silencer during the final testing phase of the reinstalled flash gas compressor on the Liza Destiny FPSO. ExxonMobil public and government affairs adviser Janelle Persaud said: “Relevant Government agencies have been notified and we are continuing to work with officials to determine the next best steps. “ExxonMobil Guyana is extremely disappointed by the design issues and continued underperformance of this unit, and will be working with the equipment manufacturer MAN Energy Solutions and the vessel’s operator, SBM, to rectify the situation. “This performance is below ExxonMobil’s global expectations for reliability.” This is the third time the company has reduced output on the Liza Destiny FPSO vessel due to problems associated with the gas compressor since its commissioning in December 2019. The Liza-1 is the first development phase of Liza oil field located in the Stabroek Block, approximately 190km offshore Guyana.

Exxon Mobil plans closure of another Australian oil refinery – US petroleum giant Exxon Mobil earlier this year announced plans to close its oil refinery in Australia, claiming it is no longer “economically viable.” The Exxon Mobil facility in Altona, Melbourne, commenced operations in 1949. Now the jobs of 350 workers – most of them highly skilled specialists in a dangerous industry – are under threat. In October last year, BP announced its plans to close its Kwinana refinery in Western Australia. If BP’s planned April 2021 shutdown also proceeds, there will be only two refineries left in Australia, down from seven a decade ago. The trade unions have enforced repeated “orderly closures” of the refineries. United Workers Union (UWU) national secretary Tim Kennedy responded to the Exxon Mobil Altona announcement by again making clear there would be no struggle to defend jobs. Describing “the closure” of the plant (though this is not slated to begin until another six months) as a “terrible missed opportunity,” the UWU head pleaded with the federal government to “invest in just transition and quality jobs of the future.” Other sections of the trade union bureaucracy have made open appeals to nationalist-militarist calculations within the Australian ruling class on the question of oil refining capacity. The Maritime Union of Australia (MUA), a division of the Construction, Forestry, Maritime, Mining and Energy Union, responded to the BP Kwinana refinery closure announcement by urging the government to nationalise the facility. MUA Assistant National Secretary Ian Bray said, “The COVID crisis exposed how vulnerable Australia’s supply chains have become, highlighting that essential supplies can quickly run short if seaborne trade is disrupted by a pandemic, military conflict, natural disasters or an economic shock.” This reference to petroleum supply chains in the event of “military conflict” was made amid accelerating US plans for a military conflict with China, in which Australia would be immediately involved as Washington’s regional ally.

Sri Lanka seeks $17 million from Greek ship owner over oil spill – Sri Lanka on Friday lodged a claim for $17.38 million with the Greek owners of an oil tanker that caught fire and left a spill stretching 40 kilometres (25 miles) off the South Asian island. The New Diamond vessel was travelling from Kuwait to India with 270,000 tonnes of crude oil on board in September when a fire broke out as it passed Sri Lanka’s east coast Sri Lanka on Friday lodged a claim for $17.38 million with the Greek owners of an oil tanker that caught fire and left a spill stretching 40 kilometres (25 miles) off the South Asian island. The New Diamond vessel was travelling from Kuwait to India with 270,000 tonnes of crude oil on board in September when a fire broke out as it passed Sri Lanka’s east coast. The crude being carried as cargo was unaffected by the blaze but some of the tanker’s fuel leaked into the Indian Ocean. Its skipper was in October fined $65,000 for causing the spill and failing to inform local officials of the environmental damage left behind. Authorities are now seeking compensation from Greek firm Porto Emporios Shipping Inc for the damage. “The Attorney-General forwarded the marine pollution claim for 3,423 million rupees ($17.38 million) to lawyers of the owners of MT New Diamond in respect of the oil spill caused in September,” the office of Sri Lanka’s state prosecutor said in a statement. Officials said about 400 to 480 tonnes of fuel had leaked from the Panamanian-registered ship. Firefighters led by India’s coastguard as well as the Indian and Sri Lankan navies succeeded in putting out the blaze before the vessel was towed to the United Arab Emirates. Porto Emporios paid Sri Lanka $2.38 million for extinguishing the fire. The blaze started after an engine room boiler exploded, killing one crew member. The remaining crew of 22, including the skipper, were rescued.

PipeChina starts work on new gas pipeline project China’s national oil and gas pipeline operator PipeChina has begun construction on the first phase of its Mengxi pipeline project, which will link existing national trunklines and facilitate the flow of domestic and imported gas to the key demand centre of Beijing-Tianjin-Hebei in north China. The first, 6.6bn m/yr capacity phase of the Mengxi project run for 413.5km from the 2.2mn t/yr Tianjin LNG receiving facility to the Dingxing sub-transmission station at Baoding in Hebei province. The Mengxi trunkline is designed to facilitate the continuous flow of gas from the Tianjin LNG terminal to the Beijing-Tianjin-Hebei area and other northern China regions. It will help to connect such national gas pipelines as the Sino-Russian eastern pipeline, the Beijing-Tianjin-Hebei natural gas pipeline branch network and gas storage facilities in north China. Completion dates for each phase of the project are unclear. But PipeChina said a second phase may release a “bottleneck” at the Tianjin LNG receiving facility, allowing it to supply 25 counties along its route including the new Xiong’an area with 6.6bn m/yr of gas output as well as imported LNG. PipeChina operates a floating storage regasification unit as an import terminal at Tianjin. The Mengxi pipeline will be the first trunkline connecting to Xiong’an, a new urban district being developed in Hebei province that was launched by China’s president Xi Jinping in 2017.

Fire, oil spill at Chinas Penglai platform- Update –An offshore crude production platform in China’s Bohai bay has caught fire and spilt oil, forcing output to be halted, market participants said. The accident happened on 5 April at the Penglai 19-3 field, which is operated by state-owned CNOOC in a 51:49 venture with US independent ConocoPhillips. The third wellhead production platform at Penglai’s phase 3 caught fire and has been largely destroyed, leaving some workers missing, according to industry participants in China. The incident was confirmed by an employee at one of the companies involved, although the details are unclear. ConocoPhillips referred questions to CNOOC. CNOOC did not immediately respond to requests for comment. The platform is still on fire and at risk of collapse if the blaze is not extinguished soon, a market participant said. Penglai 19-3 was one of China’s largest oil fields when it was discovered more than 20 years ago. ConocoPhillips also has a 49pc non-operating share in Penglai’s 19-9 and 25-6 blocks, which together with the 19-3 field produced a combined 30,000 b/d in 2020. The phase 3 project comprises mainly three new wellhead platforms and a central processing facility. The Penglai fields produce heavy-sweet crude that is sold to CNOOC’s own refineries and to independent refiners in Shandong province. An oil spill at the Penglai fields in 2011 resulted in CNOOC and ConocoPhillips paying several hundred million dollars in compensation.

Saudi Aramco in deal to sell 49pc stake in oil pipelines – State oil giant Saudi Aramco said it has reached a $12.4 billion agreement to sell a 49 per cent stake in its pipelines to a consortium led by US-based EIG Global Energy Partners (EIG), one of the world’s leading energy infrastructure investors. The transaction represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximize value for its shareholders. It also reinforces Aramco’s role as a catalyst for attracting significant foreign investment into the kingdom and optimising its assets through a lease-and-lease-back agreement involving its stabilised crude oil pipeline network. As part of the transaction, a newly-formed Aramco subsidiary, Aramco Oil Pipelines Company, will lease usage rights in Aramco’s stabilized crude oil pipelines network for a 25-year period. In return, Aramco Oil Pipelines Company will receive a tariff payable by Aramco for the stabilized crude oil that flows through the network, backed by minimum volume commitments. As per the deal, Aramco will hold a 51% majority stake in the new company and the EIG-led consortium will hold a 49% stake, said the statement from Aramco. As per the deal, the state oil giant will continue to retain full ownership and operational control of its stabilized crude oil pipeline network. The transaction will not impose any restrictions on Aramco’s actual crude oil production volumes that are subject to production decisions issued by the kingdom. Aramco President & CEO Amin H. Nasser said: “This landmark transaction defines the way forward for our portfolio optimization program. We are capitalizing on new opportunities that also align strategically with the kingdom’s recently-launched Shareek program. Aramco’s strong capital structure will be further enhanced with this transaction, which in turn will help maximize returns for our shareholders.”

A Key Oil Spread Heralds Rising Competition Among Suppliers – The battle for oil sales is set to become more intense as rising output from OPEC+ and the Middle East boosts the competitiveness of the region’s shipments, potentially forcing other suppliers to discount their barrels. The warning signs can be seen in the widening of a key price spread that’s used by traders to determine the affordability of cargoes from the Middle East against Brent-linked barrels. Right now, the gap is close to the widest in more than 16 months, and that doesn’t bode well for oil that’s priced against Brent. Brent’s premium to Dubai swaps at widest since late 2019 “There’s much cheaper crude, and a lot of it coming from the Middle East,” said Grayson Lim, a senior oil analyst at FGE. “Those Brent-linked cargoes will need to be offered at a huge discount for buyers in the region to snap up the barrels,” he said, referring to Asian users. “But if they’re heavily discounted, there’s a chance that Chinese buyers may come out to buy.” Earlier this month the Organization of Petroleum Exporting Countries and its allies decided to relax the deep production curbs that rescued prices from last year’s pandemic-driven collapse. The move will see more than 2 million barrels a day in supply restored in stages through to July amid expectations that the roll-out of vaccines will underpin further gains in energy consumption. So far, the plan has been defended by leading architect Saudi Arabia, with futures for Brent and West Texas Intermediate up almost a quarter this year. At the same time that the OPEC+ cartel is preparing to loosen off the taps, there have been continuous flows of clandestine Iranian oil to China. That — plus planned maintenance of some North Sea fields, which will shrink the flow of Brent-linked barrels — has pushed out the spread to the widest since late 2019, according to data compiled by Bloomberg. That’s a big reversal from just a few months ago. The so-called Brent-Dubai exchange of futures for swaps — to give the marker its formal name — showed Brent-Dubai at a small discount as recently as November. In October and September, Dubai-linked cargoes were also more costly on some days. The shift favoring Dubai-linked flows is likely to ripple through the market, prompting buyers to shop around and sellers to respond. In Asia, the widened spread means users will probably scoop up more affordable spot cargoes from the Middle East, unless oil from the Atlantic Basin and West Africa is slashed to stay competitive, according to traders who asked not to be identified. s See More There may be signs of that already. Last week, Angola’s Sonangol Group again reduced the offer price for a Dated Brent-linked Saturno cargo for May, with the shipment eventually taken by China’s Unipec. Nigeria has also cut official selling prices of Qua Iboe and Bonny Light to the lowest since November.

OPEC raises 2021 oil demand growth forecast on hope pandemic wanes(Reuters) -OPEC on Tuesday raised its forecast for growth in world oil demand this year on expectations the pandemic will subside, providing help for the group and its allies in their efforts to support the market. Demand will rise by 5.95 million barrels per day (bpd) in 2021, or 6.6%, the Organization of the Petroleum Exporting Countries forecast in its monthly report. That is up 70,000 bpd from last month. “As the spread and intensity of the COVID-19 pandemic are expected to subside with the ongoing rollout of vaccination programmes, social distancing requirements and travel limitations are likely to be scaled back, offering increased mobility,” OPEC said in the report. The upward revision marks a change of tone from previous months, in which OPEC has lowered demand forecasts because of continued lockdowns. A further recovery could bolster the case for OPEC and its allies, known as OPEC+, to unwind more of last year’s record oil output cuts. Oil gained further towards $64 a barrel after the report was released on Tuesday. Prices have risen to pre-pandemic highs above $70 this year, boosted by anticipation of economic recovery and OPEC+ supply restraint. OPEC made a small upward revision in its 2021 demand projection last month, but it has steadily lowered the forecast from 7 million bpd expected in July 2020. The group raised its forecast of 2021 world economic growth to 5.4% from 5.1%, assuming the impact of the pandemic is “largely contained” by the beginning of the second half of the year. “The global economic recovery continues, significantly supported by unprecedented monetary and fiscal stimulus,” OPEC said. “The recovery is very much leaning towards the second half of 2021.”

IEA ups oil demand forecast as vaccinations brighten outlook(Reuters) – Vaccine rollouts are brightening the outlook for global oil demand, the International Energy Agency (IEA) said on Wednesday, though rising cases in some major oil-consuming countries show a recovery may be fragile. “Fundamentals look decidedly stronger,” the IEA said in its monthly report. “The massive overhang in global oil inventories that built up during last year’s COVID-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing.” Citing rising cases in Europe, Brazil and the United States, the Paris-based watchdog said it remained concerned about new waves of the virus derailing progress. Still, the IEA predicted global oil demand and supply were set to re-balance in the second half of the year and that producers may then need to pump 2 million barrels per day more to meet the expected demand. OPEC and allies like Russia, a grouping known as OPEC+, would likely prove capable of tailoring its output to demand whether the virus is tamed or not, the IEA added. “The bloc’s monthly calibration of supply may give it the flexibility to meet incremental demand by ramping up swiftly or adjusting output lower should the demand recovery fail to keep pace.” The IEA said commercial oil stored in OECD countries fell for a seventh consecutive month in February, signalling a rise in demand and increased imports in the near future. Less developed countries faced a steeper climb out of the demand crater created by COVID-19, the IEA warned, as the differences between countries with prompt access to the vaccine and those without become more pronounced. “Some emerging countries with lower access are in a more difficult situation, with likely new COVID waves slowing economic activity and mobility,” the IEA said. “The situation is currently deteriorating sharply in some large non-OECD oil consumers (Brazil, Iran and India).”

Oil could plummet to $10 by 2050 if Paris climate goals are achieved, energy consultancy says – The price of oil could plunge to as little as $10 a barrel by 2050 if the world succeeds in electrifying the energy market and meeting Paris Agreement goals, a consultancy said on Thursday. Energy research and consultancy Wood Mackenzie said in a report that if world leaders took decisive action to limit global warming to 2 degrees Celsius by 2050, as set out in the landmark Paris climate accord, oil demand would drop “significantly.” Wood Mackenzie said under its accelerated energy transition scenario, the energy market would be increasingly electrified through to 2050, squeezing out the most polluting hydrocarbons, like oil. Under this scenario, oil demand could fall 70% by 2050 from current levels, the report said. Wood Mackenzie forecast demand for oil would start to fall from 2023 under this scenario and this decline would quickly accelerate thereafter, with year-on-year falls of around 2 million barrels a day. The report said oil prices could go into “terminal decline,” with international benchmark Brent crude falling to between $37 and $42 a barrel by 2030. Brent crude futures traded at $66.29 a barrel during morning deals in London, down around 0.4%. Wood Mackenzie said oil prices could slide to between $28 and $32 a barrel by 2040, before slipping to between $10 and $18 a barrel in 2050. Almost 200 countries ratified the Paris climate accord in 2015, agreeing to pursue efforts to limit the planet’s temperature increase to “well below” 2 degrees Celsius above pre-industrial levels and to pursue efforts to cap the temperature rise at 1.5 degrees Celsius. It remains a key focus ahead of COP26, although some climate scientists now believe that hitting the latter target is already “virtually impossible.” To be sure, a United Nations analysis published on Feb. 26 found that pledges made by countries around the world to curb greenhouse gas emissions were “very far” from the profound measures required to avoid the most devastating impacts of climate breakdown. Ann-Louise Hittle, vice president for macro oils at Wood Mackenzie, stressed that the consultancy’s report was a scenario rather than a “base-case forecast.” “Even so, the oil and gas industry cannot afford to be complacent,” she added. “The risks associated with robust climate-change policy and rapidly changing technology are too great.”

Oil prices drop as coronavirus caseloads rise – Oil slipped on Monday in thin trading as rising COVID-19 case numbers in some parts of the world kept a lid on prices, even as the Federal Reserve signaled the U.S. economy may soon rebound as vaccinations accelerate. Brent was up 28 cents, or 0.4%, at $62.67 a barrel by 0635 GMT, having risen to as high as $63.30 earlier. U.S. crude was down 23 cents, or 04%, to $59.09 a barrel, after rising as much as 46 cents earlier. Prices have changed little since a period of volatile trading ended last Monday. “At the moment, the market lacks direction,” the Schork Report, founded by Stephen Schork, said in a note. “We are waiting for a breakout of the current range.” While the United States has fully vaccinated more than 70 million people, and in Europe new infection numbers are falling as lockdowns take effect, India is reporting record new cases and other parts of Asia are seeing caseloads rise. That is likely to continue to keep a lid on any revival of global travel and keep prices rangebound as the summer approaches, analysts and traders said. The U.S. economy is at an “inflection point” amid expectations that growth and hiring will accelerate in the months ahead, but faces the risk of reopening too quickly and sparking a resurgence in coronavirus cases, Federal Reserve Chair Jerome Powell said in an interview broadcast on Sunday. “There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases,” Powell said

Oil rises on U.S. vaccine rollout, Middle East tension – Oil prices rose on Monday on optimism over the pace of coronavirus vaccinations in the United States and after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites. Still, crude prices have remained rangebound in the past three weeks, as growing expectations of surging U.S. economic activity are balanced by the slow rate of vaccination in Europe and anticipation of additional supply from Iran in coming months. Brent rose 33 cents to settle at $63.28 a barrel. U.S. West Texas Intermediate (WTI) rose 38 cents to settle at $59.70 a barrel. The United States has fully vaccinated 22% of its population, while the United Kingdom has vaccinated 11% fully, according to the Reuters vaccine tracker here. Still, other countries are not faring as well, with France and Germany at around 6% vaccinated. “Oil prices rose today as a result of progress in vaccination campaigns in the U.S., which are helping the country’s plan to spend,” said Louise Dickson, Rystad Energy’s oil markets analyst. “The upward momentum in other countries is promising, but large discrepancies remain globally,” Dickson added. Prices also found some support after Yemen’s Iran-aligned Houthi movement said it had fired 17 drones and two ballistic missiles at Saudi targets, including towards Saudi Aramco refineries in Jubail and Jeddah. There was no immediate Saudi confirmation. Saudi Aramco, the state oil firm, did not comment when contacted by Reuters.

Oil rises after robust China data but J&J vaccine pause weighs – Oil prices rose about 1% on Tuesday on strong Chinese import data, but the rally was capped by concerns that pauses on the Johnson & Johnson vaccine could delay economic recovery and limit oil demand growth. Brent crude oil futures were up 64 cents, or 1%, at $63.91 a barrel, while U.S. crude oil futures settled up 48 cents to $60.18 per barrel. “We’ve been trading in a range, and need clear demand data and direction on U.S. inventories to break out of this trough,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery, as global demand picked up amid progress in COVID-19 vaccinations. Import growth surged to the highest in four years. Crude oil imports into China jumped 21% in March from a low base a year earlier as refiners ramped up operations. The Organization of the Petroleum Exporting Countries in its monthly report on Tuesday raised its forecast for 2021 oil demand growth by 70,000 barrels per day from its previous forecast to 5.95 million bpd, or 6.6%. Also supporting prices ahead of week data, U.S. crude oil stockpiles were expected to have fallen last week for a third straight week, while distillate and gasoline inventories likely grew, according to analysts in a Reuters poll. Still, U.S. oil output from seven major shale formations is expected to rise for a third straight month, the U.S. Energy Information Administration said on Monday. The slow rate of vaccinations in Europe and anticipation of additional supply of oil from Iran in the coming months capped price gains. Johnson & Johnson said it would delay the rollout of its COVID-19 vaccine in Europe and was reviewing cases of extremely rare blood clots in people after U.S. federal health agencies recommended pausing the use of the vaccine as six women under 50 developed rare blood clots after receiving the shot. Yemen’s Iran-aligned Houthi movement said on Monday it had fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Saudi Aramco facilities in Jubail and Jeddah. Meanwhile, Tehran has said an explosion on Sunday at its key nuclear site was an act of sabotage by arch-foe Israel and vowed revenge. “The rise in geopolitical tension will only have a notable bullish impact on oil prices if it is coupled with actual physical supply disruption,” PVM analysts said in a note.

Oil Prices Jump As EIA Reports A Crude Draw – Crude oil prices climbed on Wednesday morning after the Energy Information Administration reported crude oil inventories had shed 5.9 million barrels in the week to April 9. This compared with an inventory draw of 3.5 million barrels for the previous week. The EIA’s inventory estimate comes a day after the American Petroleum Institute reported a 3.6-million-barrel inventory draw in crude oil for the same period but a 5.565-million-barrel build in gasoline stocks, which prevented oil prices from swinging significantly up or down. For gasoline, the EIA estimated a modest inventory build of 300,000 barrels for the week to April 9, with production averaging 9.6 million bpd. This compared with a stock build of 4 million barrels for the previous week and an average production rate of 9.3 million bpd. In middle distillates, the authority estimated an inventory decline of 2.1 million barrels for the week to April 9, with production averaging 4.6 million bpd, virtually unchanged from the week before last, with inventories adding 1.5 million barrels. Brent crude traded at $65.04 a barrel at the time of writing, with West Texas Intermediate at $61.55 per barrel. Both were up by more than 2 percent from opening, supported by news of a 21-percent oil import increase in China last month. However, headwinds remain strong. “Prices are still locked in a sideways limbo, as bearish Covid-19 developments in some countries compete against bullish economic data and spending projections going forward in US and China,” Rystad Energy analysts said on Tuesday. Morgan Stanley, meanwhile, said in a new note that it expected prices to remain range-bound through the end of the summer, at between $65 and $70 per barrel for Brent. The slow rollout of Covid-19 vaccines in Europe and the news that vaccinations with Johnson & Johnson may be suspended temporarily because of rare blood clotting problems in several patients are also weighing on oil prices.

Oil climbs nearly 5% on signs of increasing crude demand (Reuters) -Oil prices surged almost 5% on Wednesday, after a report from the International Energy Agency, followed by U.S. inventory data boosted optimism about returning demand after the coronavirus lockdowns last year crushed fuel consumption. Brent crude futures rose $2.91, or 4.6%, to settle at $66.58 a barrel. U.S. West Texas Intermediate (WTI) crude ended $2.97, or 4.9%, higher at $63.15 a barrel. U.S. crude inventories fell by 5.9 million barrels last week, the Energy Information Administration said, exceeding analysts’ forecasts for a 2.9 million-barrel drop. East Coast crude stocks hit a record low. [EIA/S] Gasoline supplied in latest week, indicating the U.S. consumption of the fuel, rose to 8.9 million barrels per day, the highest since August, the EIA report showed. Gasoline stocks edged higher by 309,000 barrels, less than expectations for a 786,000-barrel rise. Distillate stockpiles fell by 2.1 million barrels in the week, versus expectations for a 971,000-barrel rise. Earlier in the session, oil prices rose on a report from the International Energy Agency that predicted global oil demand and supply were set to rebalance in the second half of the year. It added that producers may then need to pump an additional 2 million bpd to meet the expected demand. “That IEA report is one of the best ones we’ve seen them publish in awhile in terms of being optimistic about the continued rebound in demand,” Similarly, the Organization of the Petroleum Exporting Countries on Tuesday raised its global demand forecast by 70,000 bpd from last month’s forecast and now expects global demand to rise by 5.95 million bpd in 2021. Signs of a strong economic recovery in China and the United States have underpinned recent price gains, but stalled vaccine rollouts worldwide and soaring COVID-19 cases in India and Brazil have slowed the market’s advance.

Oil edges up to fresh 4-week highs as demand outlook improves (Reuters) -Oil prices edged up to fresh four-week highs on Thursday on positive U.S. economic data and higher demand forecasts from the International Energy Agency (IEA) and OPEC as countries start to recover from the COVID-19 pandemic. After rising almost 5% on Wednesday, Brent futures rose 36 cents, or 0.5%, on Thursday to settle at $66.94 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 31 cents, or 0.5%, to settle at $63.46. That was the highest closes for both benchmarks since March 17 for a second day in a row and put both contracts up for a fourth straight day for the first time since February. “Oil is beginning to reconnect with strong equities with further assistance from a weakening dollar,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. U.S. retail sales rebounded more than expected in March as Americans received additional pandemic relief checks and as COVID-19 vaccinations allowed broader economic re-engagement. That data and upbeat earnings from several companies helped push the S&P 500 and the Dow Jones indexes to record highs, bolstering hopes of a broader economic rebound. The U.S. dollar was on track to fall to a four-week low against a basket of currencies. A weaker dollar makes oil cheaper for holders of other currencies, which traders said helps support crude prices. The IEA and the Organization of the Petroleum Exporting Countries this week made upward revisions to their global oil demand growth forecasts for 2021 to 5.7 million barrels per day (bpd) and 5.95 million bpd respectively. U.S. crude inventories, meanwhile, fell 5.9 million barrels last week, government data showed on Wednesday, with East Coast crude stocks falling to a record low. Supply discipline and rebounding economies are set to give oil a chance to break out of the recent range, analysts at Goldman Sachs said in a report. Despite all the bullish economic news, some energy traders noted oil price gains will likely be capped by OPEC’s plans to ease production cuts starting next month.

Oil nudges down but secures weekly gain on recovery hopes (Reuters) -Oil settled modestly lower on Friday but secured a weekly gain on a stronger demand outlook and signs of economic recovery in China and the United States that offset concerns about rising COVID-19 infections in other major economies. Brent crude settled down 17 cents, or 0.3%, at $66.77 a barrel. The global benchmark finished up 6% on the week after rising in the past four sessions. U.S. West Texas Intermediate (WTI) crude settled down 33 cents, or 0.5%, at $63.13. China’s first-quarter gross domestic product jumped 18.3% year on year, official data showed. That followed a big increase in U.S. retail sales and a drop in unemployment claims released on Thursday. “Strong economic data, spurred by the Biden $1,400 stimulus check, is a huge positive development for the energy patch,” said Bob Yawger, director of energy futures at Mizuho. This week, both the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) increased their forecasts for oil demand growth for 2021, citing the stronger-than-expected rebound in activity in certain economies. [IEA/M] [OPEC/M] Those forecasts were also supported by Wednesday’s government data that showed overall U.S. crude inventories fell by 5.9 million barrels as refining activity picked up. [EIA/S] Not all economies are recovering, however, as India’s coronavirus infection rate hit a record while Germany’s chancellor on Friday said a third wave of the virus had the country in its grip. Oil has recovered from pandemic-induced lows last year, helped by record cuts to oil output by OPEC and its allies, a group known as OPEC+. Some of the OPEC+ cuts will be eased starting in May, and the group meets on April 28 to consider further tweaks to the supply pact. In rival producer the United States, however, the number of drilling rigs has risen to the highest level since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.

Oil prices finish lower, but score a more than 6% weekly climb — Oil futures pulled back on Friday, settling lower after posting four consecutive session gains, but prices scored a more than 6% weekly climb.Support from a strong economic report from China helped to offset pressure from concerns that rising cases of COVID in parts of the world threaten a fitful recovery from the demand-sapping pandemic.The energy markets have so far been buttressed by monthly reports that point to a healthy recovery from the pandemic, as well as tensions between the U.S. and Iran and Russia, which could have some impact on crude markets.This week, the International Energy Agency lifted (link) its forecast for oil demand this year in its monthly report and data from the Energy Information Administration revealed (link) a third straight weekly decline in U.S. crude inventories. Those reports were the “biggest bullish forces this week, along with pretty good jobs data,” Still, he believes “prices are near a peak for now,” and that prices pulled back Friday due to profit taking.On Friday, West Texas Intermediate crude for May delivery fell 33 cents, or 0.5%, to settle at at $63.13 a barrel on the New York Mercantile Exchange.June Brent crude edged down by 17 cents, or nearly 0.3%, at $66.77 a barrel on ICE Futures Europe. It hit a notable intraday high on Friday above $67, after the global benchmark picked up 0.5% on Thursday.For the week, WTI saw a weekly gain of 6.4%, while Brent marked a rise of 6.1%, based on the front-month contracts, according to Dow Jones Market Data. Those were the best weekly returns for both contracts since the week ended March 5.Also on Nymex, May gasoline fell 0.6% to $2.04 a gallon, though tallied a weekly rise of 4%, while May heating oil lost 0.2% to nearly $1.90 a gallon, paring its weekly rise to 4.9%.May natural gas tacked on 0.8% to $2.68 per million British thermal units, settling up 6.1% for the week. On Friday, the focus for oil traders was on China which reported that its first-quarter gross domestic product jumped 18.3% on a year-on-year basis (link). A report on retail sales for the People’s Republic, one of the biggest importers of crude, also showed a more than 34% rise.Global cases of COVID remain a key concern though, given the potential for economic disruption and lower energy demand. The World Health Organization warned Friday (link)that the global tally of confirmed cases of the coronavirus-borne illness COVID-19 has almost doubled in the last two months, and is now approaching the highest rate seen since the start of the pandemic. Case numbers are climbing in nearly all regions, including the Americas, with India, Brazil, Poland and Turkey becoming hot spots.U.S. sanctions imposed on Russia (link), over alleged election interference and hacking, were being weighed for their impact on energy trade. Russia is one of the world’s biggest producers of crude and a member of group known as OPEC+, consisting of the members of the Organization of the Petroleum Exporting Countries and their allies.

IMF hikes growth forecast for the Middle East, says recovery will be ‘divergent’ – The International Monetary Fund has revised its growth forecast upward for the Middle East and North Africa region, as countries recover from the coronavirus crisis that began in 2020. Real GDP in the MENA region is now expected to grow 4% in 2021, up from the fund’s October projection of 3.2%. However, the outlook will vary significantly across countries depending on factors such as vaccine rollouts, exposure to tourism and policies introduced, the IMF said in its latest regional economic report published on Sunday. Jihad Azour, director of the IMF’s Middle East and Central Asia department, said the recovery would be “divergent between countries and uneven between different parts of the population.” He told CNBC’s Hadley Gamble that the growth would be driven mainly by oil-exporting countries that will benefit from the acceleration of vaccination programs and the relative strength in oil prices. Azour said each country’s capacity to recover in 2021 varies a “great deal.” “(The) vaccine is an important variable this year, and the acceleration of vaccination could contribute to almost one additional percent of GDP in 2022,” he said. Some countries in the region – such as the Gulf Cooperation Council states, Kazakhstan and Morocco – started their vaccinations early and should be able to inoculate a significant share of their population by end-2021, the IMF said. Other nations including Afghanistan, Egypt, Iran, Iraq and Lebanon were classified as “slow inoculators” that will probably vaccinate a big portion of their residents by mid-2022. The last group – the “late inoculators” – are not expected to achieve “full vaccination until 2023 at the earliest,” the report said. It added that early inoculators are expected to reach 2019 GDP levels in 2022, but countries in the two slower categories will recover to pre-pandemic levels between 2022 and 2023. Azour said innovative policies helped to speed up the recovery, but it’s “very important to build forward better.” That could include measures to improve the economy, attract investment, increase regional cooperation and address scars of the Covid crisis. “All these elements are silver linings that can help accelerate the recovery and bring the economy of the region (to) the level of growth that existed prior to the Covid-19 shock,” he said.

Major powers respond to Israel’s criminal attack on Natanz with a shrug of the shoulders –The international response to Israel’s attack last Sunday on Iran’s main uranium enrichment facility at Natanz highlights the reality of geo-political relations. The attack took place as the US and Iran resumed supposedly “highly constructive talks” in Vienna on a possible return the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), constraining Iran’s nuclear program. Israel is vehemently opposed to any resumption of the deal. The New York Times reported that, according to US and Israeli intelligence sources, Israel had played a role in the attack, involving the remote detonation of an explosive device – below more than 20 feet of reinforced concrete – smuggled into the plant. The explosion took out both the primary and backup systems supplying electricity to thousands of underground centrifuges at the Ahmadi Roshan nuclear enrichment facility, Iran’s main enrichment program. Israeli news outlets, citing intelligence sources, attributed the attack to Mossad, Israel’s spy agency. Prime Minister Benjamin Netanyahu’s government issued no official statement. The explosion follows a long list of actions taken by Israel against Iran’s nuclear program, including the use of the US-Israeli Stuxnet virus to disable 1,000 centrifuges and the assassination of its scientists. The blast was criminal and reckless. The loss of electrical power for any length of time could have had catastrophic consequences, as the 2011 Fukushima disaster in Japan demonstrated. The earthquake and subsequent tsunami knocked out all the electrical supply to the nuclear power station, including the emergency generators that keep the cooling systems running, leading to the second worst nuclear meltdown in history, rivaling Chernobyl. Iran condemned the blackout at the underground Natanz nuclear facility, branding it an act of “nuclear terrorism.” Saeed Khatibzadeh, the Foreign Ministry spokesman, called it “an act against humanity” that could have caused a disaster.

Iran to defy uranium enrichment limits of 2015 nuclear deal after attack on Natanz facility – Iran will begin enriching uranium at 60%, a significant step toward weapons-grade material, in response to an attack at a key nuclear site, the country’s top nuclear negotiator told state media on Tuesday. Iran’s deputy foreign minister, Abbas Araghchi, said he informed the International Atomic Energy Agency, which oversees the monitoring and inspection of nuclear sites, of Tehran’s decision. An estimated 90% of enriched uranium is needed to develop a bomb. The move comes two days after Tehran said its underground Natanz atomic facility experienced a blackout. The Natanz facility has been previously targeted by cyberattacks. Iran’s Ali Akbar Salehi, the head of the Atomic Energy Organization of Iran, described the event on Sunday as an act of “nuclear terrorism.” A day later, Iran formally accused Israel of being behind the attack and vowed revenge. The blackout at Natanz coincided with Secretary of Defense Lloyd Austin’s arrival in Israel for meetings with Prime Minister Benjamin Netanyahu and Defense Minister Benny Gantz. The Israeli government has not publicly commented on the incident. The White House on Monday said the United States was not involved in the attack. Iran’s decision to increase its enrichment of uranium comes as the Biden administration works to revive the 2015 Joint Comprehensive Plan of Action, or JCPOA, nuclear agreement. The JCPOA, brokered by the Obama administration, lifted sanctions on Iran that had crippled its economy and cut its oil exports roughly in half. In exchange for billions of dollars in sanctions relief, Iran agreed to dismantle some of its nuclear program and open its facilities to more extensive international inspections. Alongside the United States, France, Germany, the U.K., Russia and China â were also signatories of the agreement. In 2018, then-President Donald Trump kept a campaign promise and unilaterally withdrew the United States from the JCPOA calling it the “worst deal ever.” Trump also reintroduced sanctions on Tehran that had been previously lifted. Following Washington’s exit from the landmark nuclear deal, other signatories of the pact â have struggled to keep the agreement alive.

China and Russia will keep Iran from building a bomb – The U.S. pursuit of a return to the Iran deal has received new strength after recent talks in Vienna appeared to indicate that working groups might bring Tehran and Washington closer to a series of agreements. The original 2015 Joint Comprehensive Plan of Action (JCPOA) was signed by China, France, Germany, Iran, Russia, the United States, United Kingdom and European Union. The complex deal was supposed to block Iranian pathways to a nuclear weapon in exchange for sanctions relief. It also was supposed to prevent a war with Iran. Largely absent in discussions about claims that Iran will develop a nuclear weapon if the U.S. doesn’t enter into a new Iran deal are questions about whether China, Russia and even Turkey might restrain Iran from its progress toward making a bomb. Because much of the discussion focuses on the U.S. and Iran, Tehran’s ties with Beijing and Moscow largely are ignored. Iran recently entered into a 25-year cooperation agreement with China. Both China and Russia don’t want a nuclear-armed Iran, and Iran’s neighbor Turkey likely would not want Iran to be armed with nuclear weapons in the region. Therefore, the real restraint on Iran’s nuclear ambitions may not be a U.S. strategy or a new Iran nuclear deal, but rather, Iran’s need to please other authoritarian regimes. The U.S. should consider this in its discussions with Iran. Recently, Iran met signatories of the JCPOA in Vienna while the U.S. was sidelined because Washington withdrew from the deal under the Trump administration. There is a lot of pressure on the Biden administration to cave to Iranian demands. At the heart of the problem is a misunderstanding of the current restraints on Iran’s nuclear program. Iran uses nuclear enrichment as leverage to goad the West into giving Tehran sanctions relief, essentially demanding cash in exchange for not building a nuclear bomb. Iran does this skillfully. It periodically releases information about its enrichment activities to put pressure on the U.S. For example, recent reports said Iran had 55kg of 20 percent-enriched uranium, a stockpile that violates the 2015 deal. Tehran’s message is that the U.S. must return to the deal and then Iran will reduce its stockpile. Iran never built a bomb. Instead it used claims that it was “moving toward a nuclear weapon” to wring concessions from other nations. It also used talking points about political “hardliners” and fear of “another war in the Middle East” to get the U.S. to the bargaining table. Now Iran once again has trotted out the “hardliners” equation, claiming that if the U.S. doesn’t agree to a new deal, the hardliners might win an upcoming election. This is a talking point that Iran uses only in its discussions with the West; it doesn’t appear to ever mention hardliners in its own media or in talks with Russia, China and Turkey. That means Iran doesn’t threaten Beijing or Moscow with “hardliners” who might emerge if those countries don’t give in to Iran’s demands. Having China and Russia as part of the Iran deal keeps Iran from developing a nuclear weapon because it would anger Moscow and Beijing – and Iran can’t risk its ties to those countries. Iran uses talk of uranium enrichment, political hardliners and possible war as leverage over the United States. But leaders in Beijing, Moscow and Ankara don’t appear to have much concern about such matters, including whether Iran builds a bomb or goes to war in the Middle East. This is because China and Russia are happy to use Iran’s destabilizing policies to counter and distract the United States, and realize that Iran apparently won’t violate the JCPOA to the extent of actually building a bomb (it had ample opportunity to do so before the accord).

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