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Here are some more selected news articles for the week ending 01 May 2021. Go here for Oil, Gas, And Fracking News Read 09May 2021 – Part 1.
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Hearings on proposed oil and gas waste disposal facility in San Augustine County to begin Tuesday (KTRE) – This wooded property in San Augustine County is selected by a Montana company for the construction of an oil and gas waste disposal facility.Tomorrow morning, a hearing on a permit request by PA Prospect begins before the Texas Railroad Commission in Austin.Resident Ann Bridges, who lives across the road from one of three properties owned by the company and Director of Friends of Lake Sam Rayburn Amanda Haralson explain their interest in the proceedings.On Monday afternoon, PA Prospect released a statement on the matter.“The purpose of the administrative hearing is to ensure that site, design, construction and operation of the proposed facility in San Augustine County meets all regulatory standards required by the regulating state agency, the Railroad Commission of Texas. A license must ensure that the facility is designed and constructed with state-of-the-art and robust engineering features (including multiple liner systems and leachate detection and collection systems) so that surface and subsurface water is not endangered. The Railroad Commission licenses these types of oil-and-gas-waste-only facilities that handle the oil and gas industry’s liquid and solid wastes (primarily produced salt water, and drill cuttings which are mostly soil) across the state of Texas.”The hearing is scheduled for three weeks with PA Prospect the first to present testimony. The meeting is via zoom.
Exxon CEO says advancing U.S. carbon capture project with rivals, government –(Reuters) – Exxon Mobil Corp is advancing a carbon capture and storage project along the U.S. Gulf of Mexico through talks with rivals and government officials, Chief Executive Darren Woods said in an interview on Friday. The largest U.S. oil producer this month floated a public-private initiative that would collect and sequester planet-warming carbon dioxide emissions from petrochemical plants along the Houston Ship Channel, a 50-mile (80-km) long waterway that is part of the Port of Houston. Woods declined to identify by name the businesses Exxon hopes to attract to the project, saying he aims to lure the region’s top 50 CO2 emitters, and is lobbying federal, state and local officials for support. “I’ve been very involved with conversations with the mayor and the local government officials in Houston, with the governor and officials here in Texas, and at the federal level in the administration on this opportunity,” Woods said in an interview. It would cost at least $100 billion from companies and government agencies to finance a project that could store 50 million tonnes of CO2 by 2030 and double that amount by 2040, Exxon has said. Exxon and U.S. rivals Chevron Corp and Occidental Petroleum are “uniquely positioned to scale” carbon capture and storage technology, said Morgan Stanley analyst Devin McDermott in a report on Friday. The Houston Ship Channel proposal would require “new policies to drive investment,” he said. The project faces enormous hurdles, including financing and support from government agencies for permitting and carbon regulations. The proposal arose as Exxon faces a proxy fight over its plan to increase fossil fuel production that could greatly expand its carbon emissions. Activist hedge fund Engine No. 1 is battling the company over four board seats and the company’s strategic direction. ./p>
ExxonMobil begins lockout of hundreds of Texas oil workers –Oil giant ExxonMobil initiated a lockout of more than 650 workers at its Beaumont, Texas refinery and blending and packaging plant on Saturday morning after negotiations broke down between the company and the United Steelworkers (USW) union. USW officials agreed to the “orderly transfer” of the workers off of ExxonMobil’s property and have not called an official strike. USW Local 13-243 and ExxonMobil met Friday night and Saturday morning, attempting to come to an agreement before the lockout began. By 1 p.m. Saturday, union representatives said more than 200 workers on their regular shift had been escorted out of the facility, two at a time. Some workers reported they had been forced to leave the property as early as the night before. The USW and ExxonMobil began bargaining a new contract on January 11. The company demanded workers accept a proposal which included major changes to workers’ safety, job security, and seniority rights. On April 23, ExxonMobil announced its intention to lock workers out on May 1 if they did not agree to the givebacks. The USW asked for the current contract to be extended by a year, but ExxonMobil said it would not do so and demanded that the USW bring its contract proposal to a vote. The USW, knowing that workers would overwhelmingly reject another concessionary contract, opted instead to let the company lock out its members. Workers gathered at a lot adjacent to the refinery and formed a picket line Saturday morning, carrying signs denouncing ExxonMobil’s actions. Health and safety are major concerns for workers at the plant and a major reason an agreement has not been reached. ExxonMobil claimed health and safety demands put forward by workers “would significantly increase costs” and limit its ability to remain competitive. Last October, ExxonMobil, which had a market valuation of $174 billion at the end of 2020, suspended its contribution to employees’ 401(k) pension plans, citing the effects of the pandemic. At the time, a company spokeswoman said, “ExxonMobil’s total remuneration remains competitive despite the suspension.” Oilworkers have been devastated by the COVID-19 pandemic. The slowdown of the global economy sharply drove down oil prices in early 2020, initiating a wave of mass layoffs in the oil sector. More than 118,000 energy workers were laid off worldwide between March and July in 2020, accounting for 15.5 percent of the industry’s workforce. Combined with the 200,000 job cuts from 2014-16, amid another crash in oil prices, the losses are staggering. One of the most common causes of accidents as reported by workers is understaffing. Jobs in the oil industry are physically demanding and workers normally see 12-hour shifts plus overtime. Hazardous materials and heavy machinery create an environment with a high potential for workplace injury. More than 1,500 oil rig workers died on the job between 2008 and 2017. .
Lockout of hundreds of oil workers continues in Beaumont, Texas — Days after ExxonMobil locked out more than 600 employees from its Beaumont, Texas refinery and packaging plant, United Steelworkers (USW) union leadership and the company have not met to negotiate a contract since Friday. ExxonMobil and the USW have been negotiating since January, but ExxonMobil claimed workers’ health and safety demands “would significantly increase costs.” The company released a statement stating it had been bargaining “in good faith,” but negotiations have yet to resume. The oil company escorted USW Local 13-243 members from the plant on Saturday after union officials organized an “orderly transfer” of the workers off of the premises. ExxonMobil said it barred workers from entering because of the union’s refusal to call for a vote on a contract proposal and fear that workers might go on strike. Days before the lockout, the company brought in managers from other facilities and hired temporary workers as replacements to keep the facility running. After the USW handed over the plant to corporate management, workers formed a picket line at a lot adjacent to the plant. USW District 13 Representative Richard “Hoot” Landry told the Beaumont Enterprise Monday that the union scheduled picket activities outside the refineries and he had been meeting with district leadership. Landry said talks had been focused on workers’ benefits. “Workers will receive at least one more check from (ExxonMobil), but we are doing everything we can right now to secure resources from our international union and local communities within the state of Texas to provide benefits to our membership.” Union officials at the plant said they sent a request to the USW international leadership to help striking workers by tapping into the strike and defense fund, financed by union dues to support workers during strike activity. Landry also stated the local union reached out to the Texas Workforce Commission to secure approval for unemployment benefits for locked out workers. Landry claimed ExxonMobil locked out workers because the company wanted to maintain control of the situation. However, he admitted the union never wanted a work stoppage and actively worked to avoid one. By preventing a strike the USW has given all the initiative in the situation to the energy giant. Neither the USW nor ExxonMobil has publicly revealed specific details in the conflict over a new contract, but company officials said there was strong disagreement between the two sides.
Texas freeze delivers billions in profits to gas and power sellers (Reuters) – Natural gas suppliers, pipeline companies and banks that trade commodities have emerged as the biggest market winners from February’s U.S. winter blast that roiled gas and power markets, according to more than two dozen interviews and quarterly earnings reports. The deep freeze caught Texas’s utilities off-guard, killed more than 100 people and left 4.5 million without power. Demand for heat pushed wholesale power costs to 400 times the usual amount and propelled natural gas prices to record highs, forcing utilities and consumers to pay exorbitant bills. After the storm, few companies wanted to talk about their financial gains, unwilling to be seen as profiting off others’ hardships. But a clearer picture is emerging from quarterly earnings and as utility companies smarting from big bills sue to recoup their losses. The biggest winners were companies with access to supplies, including leading energy trader Vitol, gas suppliers Kinder Morgan , Enterprise Products Partners and Energy Transfer , oil giant BP plc , and banks Goldman Sachs , Bank of America (BofA) and Macquarie Group . The firms combined stand to reap billions of dollars in profits by selling gas and power during the storm, according to interviews and reviews of public documents. It is possible that some companies may never collect on those sales due to ongoing litigation, however. Losers include producers that could not deliver oil and gas due to frozen wellheads, gathering systems and processing stations. The week-long output loss cost shale producer Pioneer Natural Resources $80 million, Chevron about $300 million, and Exxon Mobil $800 million. Utilities are complaining of price gouging and of unwarranted supply cancellations. The Federal Energy Regulatory Commission is reviewing gas and power markets for potential market manipulation. Goldman Sachs and Vitol did not comment. BofA did not respond to a request for comment. Energy Transfer appears to have been the biggest winner, saying in its quarterly results it expects gains of about $2.4 billion for the year from the storm. The pipeline giant made most of its money from trading and from selling what it had in storage during the period when prices skyrocketed. Rival Enterprise Products Partners said the storm led to gains of about $250 million in the first quarter. Kinder Morgan, another gas storage and pipeline operator, earned about $1 billion during the storm, the vast majority from higher gas prices and sales.
Dallas pipeline giant Energy Transfer made $2.4 billion as Texas winter storm’s biggest winner –Dallas-based Energy Transfer LP, the pipeline giant controlled by billionaire Kelcy Warren, has emerged as the biggest winner so far from the deadly winter storm that paralyzed Texas in February. The company saw a positive earnings impact from the extreme weather of about $2.4 billion, it said Thursday in its first-quarter earnings statement. Energy Transfer raised its full-year earnings guidance to as much as $13.3 billion, from up to $11 billion previously. The stock jumped as much as 3.6% in after-hours trading. Energy Transfer joins a growing list of gas market players who reaped windfalls totaling almost $5 billion amid the chaos of the storm. Plunging prices and power cuts interrupted the normal flow of gas from many wells. Market players with available supplies were able to sell at sky-high spot prices. Speculation over the extent of Energy Transfer’s gains began soon after the storm when co-chief executive officer Marshall McCrea told investors in a conference call that the company had done “exceptionally well” as a dramatic gas shortage spurred demand for the supplies held in the company’s storage facilities. The fossil-fuel hauler was sued by CPS Energy, a Texas utility, in the immediate aftermath of the crisis for allegedly charging a natural gas price more than 15,000% higher than normal. Energy Transfer rejected the claims. “During the storm, employees manned facilities 24 hours a day, ET’s transmission lines remained fully operational and the Partnership did everything within its control to keep plants running and field compression idling so that ET would be prepared to deliver natural gas to facilities throughout Texas for residential consumption and power generation,” the company said in the statement. Kinder Morgan Inc., another pipeline operator, said last month the storm had a $1 billion positive impact on its results. BP PLC also reported an “exceptional” quarter in gas trading; while it didn’t break out more detail, one Citigroup Inc. analyst estimated BP’s Texas-related gain easily exceeded $1 billion, Meanwhile Australian investment bank Macquarie Group Ltd. pocketed $210 million. Energy Transfer operates over 90,000 miles of pipelines and related infrastructure spanning 38 states and Canada. The company posted a record quarterly net income of $3.29 billion in the first quarter, far exceeding the $820.5 million average of analysts’ estimates compiled by Bloomberg. The company lost $854 million a year earlier.
ENERGY MARKETS: Texas freeze exacted worse toll than estimated on U.S. oil — Monday, May 3, 2021 — An Arctic cold blast that swept through the U.S. South in February caused a much bigger loss in oil supply than previously estimated, with output falling to a three-year low, according to U.S. government data.
Stanford scientists map local earthquake risks from Eagle Ford fracking – Hydraulic fracturing to extract trapped fossil fuels can trigger earthquakes. Most are so small or far from homes and infrastructure that they may go unnoticed; others can rattle windows, sway light fixtures and jolt people from sleep; some have damaged buildings. Stanford University geophysicists have simulated and mapped the risk of noticeable shaking and possible building damage from earthquakes caused by hydraulic fracturing at all potential fracking sites across the Eagle Ford shale formation in Texas, which has hosted some of the largest fracking-triggered earthquakes in the United States. Published April 29 in Science, the results show the most densely populated areas – particularly a narrow section of the Eagle Ford nestled between San Antonio and Houston – face the greatest risk of experiencing shaking strong enough to damage buildings or be felt by people. “We found that risks from nuisance or damage varies greatly across space, depending mostly on population density,” said lead study author Ryan Schultz, a PhD student in geophysics at Stanford. Tens of thousands of wells drilled in the vast formation over the past decade helped to fuel the U.S. shale boom and contributed to a dramatic increase in earthquakes in the central and eastern U.S. starting around 2009. Although damaging earthquakes are rare, the authors write, “the perceived risks of hydraulic fracturing have both caused public concern and impeded industry development.”In sparsely populated areas within the southwestern portion of the Eagle Ford, the researchers found damage is unlikely even if fracking causes earthquakes as large as magnitude 5.0. Allowing such powerful quakes, however, could jeopardize the “social license to operate,” they write. The phrase, which emerged within the mining industry in the 1990s and has since been adopted by climate activists, refers to the unofficial acceptance by local community members and broader civil society that oil, gas and mining operations need to do business without costly conflicts.”Seismicity is part of the social license for hydraulic fracturing, but far from the only issue,” said study co-author Bill Ellsworth, a geophysics research professor at Stanford’s School of Earth, Energy & Environmental Sciences (Stanford Earth). “Eliminating hydraulic fracturing seismicity altogether wouldn’t change any of the other concerns.”Among those concerns are health threats from living near oil and gas wells and greenhouse gas emissions from fossil fuel production and use. California’s recent announcement of plans to stop issuing new permits for hydraulic fracturing by 2024, for example, comes as part of an effort to phase out oil extraction and reduce greenhouse gas emissions.
Montana, Kansas, and Arkansas enter the arms race to criminalize protests | Grist — Jestin Dupree had driven more than 400 miles from the Fort Peck Indian Reservation in northeastern Montana to the state’s capital, Helena, to testify against legislation that could be used to jail environmental protesters. For years, his tribe had been protesting the Keystone XL pipeline, which was to cross the Missouri River, their main source of water. Montana’s new legislation, however, would allow environmental protesters to be jailed for up to 18 months if they obstruct operations at oil and gas facilities – and up to 30 years if they damage equipment. It seemed to be a direct rebuke to the Indigenous activism that had helped stop Keystone XL.The state lawmaker championing the bill, Representative Steve Gunderson, hadn’t consulted with the tribe despite the disproportionate impact it could have on tribal members, according to Dupree. Gunderson had also referenced the 2016 protests over the Dakota Access Pipeline in North Dakota while introducing the legislation, which just didn’t sit right with Dupree. Those protests were largely peaceful and only turned violent when private security hired by the pipeline companythreatened protesters with guard dogs – and when police used water bombs and tear gas on mostly Indigenous protesters in the middle of winter. Nevertheless, Gunderson, who did not respond to a request for comment, falsely accused protesters of “throwing homemade explosive pipe bombs.” “This is a blanket bill that they’re trying to shove down everybody’s throats,” Dupree told Grist. “It’s very unfair to have no consultation, and the fact that it was an issue with the Standing Rock tribe that brought this [bill] about – that the sponsor even mentioned that – was disgusting.”Once signed, Montana will become the fourth state this year to pass legislation that increases penalties for trespass on properties with so-called “critical infrastructure” – a long list of facilities including pipelines, refineries, and other oil and gas equipment. The bill punishes those who “materially impede or inhibit operations” of an oil and gas facility with up to 18 months in prison and a fine of $4,500. Those who cause damage to critical infrastructure that costs more than $1,500 could face a jail term of up to 30 years. Kansas and Arkansas passed similar laws earlier this month, and in January Ohio Governor Mike DeWine signed a bill that makes trespassing on oil and gas properties a misdemeanor punishable with up to six months in prison and a $1,000 fine.
Looming showdown as Michigan governor orders Canadian pipeline shut down – For Michigan’s governor, the 645-mile pipeline jeopardizes the Great Lakes. For Canada’s natural resources minister, its continued operation is “nonnegotiable.” The clash over Calgary-based Enbridge’s Line 5, which carries up to 540,000 barrels of crude oil and natural gas liquids across Michigan and under the Great Lakes each day, is placing stress on U.S.-Canada ties – and raising questions about how the close allies, which have expressed a desire to work together to fight climate change, can balance energy security with the transition to a clean-energy economy. In a move applauded by environmentalists and Indigenous groups on both sides of the border, Michigan Gov. Gretchen Whitmer (D) in November ordered the firm to shut down the nearly 70-year-old lines by May 12. Canadian officials, including Prime Minister Justin Trudeau, have appealed to their American counterparts, including President Biden, Secretary of State Antony Blinken and Energy Secretary Jennifer Granholm for help. Joe Comartin, Canada’s consul general in Detroit, said a shutdown would have “significant” impacts on both sides of the border. He predicted effects ranging from months-long propane shortages to higher costs for consumers to fuels being carried by rail, truck or boat – methods that he said are less emissions-friendly and more dangerous than a pipeline. “It certainly strains our relationship,” he said, “and we’ve had a very long history of working closely together.” One “irritant,” he said, is “the claim from the state that they are doing this to protect the Great Lakes, that they’re more interested in protecting the Great Lakes than we in Canada are. Basically, we reject that completely.” Line 5, built in 1953, is part of Enbridge’s mainline system, which carries fuel from Alberta’s oil sands to the Midwestern United States and Eastern Canada. Running from Superior, Wis., to Sarnia, Ontario, it is a key conduit for refineries in those regions, which make gas, propane and home-heating oils, as well as jet fuels for airports in Toronto and Detroit. For 4.5 miles under Michigan’s Straits of Mackinac, the waterway where Lake Huron meets Lake Michigan, Line 5 splits into dual pipelines.. Whitmer announced last fall that she was revoking the 1953 easement that allows the lines to cross the straits, citing the “unreasonable risk” that they pose to the Great Lakes and what she said were Enbridge’s “persistent” breaches of the easement’s terms. The announcement listed several infractions, including failures to ensure that the lines are supported every 75 feet and that they’re covered by a coating to prevent erosion. It noted two incidents, in 2018 and 2019, in which the pipelines were struck and damaged by cables or anchors from boats.
Michigan Wants to Close Oil Pipeline Under the Great Lakes. Canada Says No. – – Canada is fighting to stop U.S. officials from closing a vital cross-border oil and gas pipeline as a deadline to shut it looms. The dispute erupted in November, when Michigan Gov. Gretchen Whitmer announced she was revoking a permit that allows Enbridge Inc.’s Line 5 pipeline to run along the bottom of the Straits of Mackinac, between Lake Michigan and Lake Huron. She gave the company until May 12 to shut the pipeline. The 645-mile conduit carries more than a half million barrels of oil and natural gas liquids each day from Superior, Wis., to refineries in Michigan, Ohio, Pennsylvania, Ontario and Quebec. Canadian officials and Enbridge say closing the pipeline would choke off almost half of the supply used to make gasoline, jet fuel and home-heating oil for Ontario and Quebec, the most populous parts of the country. The closure could lead to higher fuel costs and thousands of job losses in the refineries that process the oil, officials say. Enbridge has sued Michigan in federal court to stop the revocation, arguing the state has no authority to do so, and said it won’t shut the pipeline down unless ordered by a court. Michigan cited “the unreasonable risk that continued operation of the dual pipelines poses to the Great Lakes,” in justifying the decision. The issue has become the biggest irritant between Canada and the U.S. since President Biden’s election. Canadian Prime Minister Justin Trudeau brought up Line 5 during a virtual summit in February with Mr. Biden, who in January had revoked a permit for Canadian operator TC Energy Corp.’s Keystone XL pipeline. The White House has given no sign that it is prepared to step into the middle of the dispute, but Canada has continued to press officials in the Biden administration. Canada’s Natural Resources Minister Seamus O’Regan, who spoke with U.S. Energy Secretary Jennifer Granholm about the situation, has said the Line 5 pipeline is “nonnegotiable.” The White House declined to comment. Canada’s U.S. ambassador, Kirsten Hillman, has met with Ms. Whitmer. She has also spoken to senior Biden administration officials about the stakes involved should Line 5 shut down, such as the future of refineries in Midwestern states and billions in lost annual output. “The regional consequences of shutting down Line 5 are profound,” she said. So far, the entreaties have had little effect. “These oil pipelines in the Straits of Mackinac are a ticking time bomb, and their continued presence violates the public trust and poses a grave threat to Michigan’s environment and economy. The governor fully stands behind her decision to revoke and terminate the 1953 easement, while securing Michigan’s energy needs,”
Michigan Governor Gretchen Whitmer is trying to shut down the biggest artery for Canadian oil exports to the U.S. – will she be successful? – At least on paper, Ontario, Quebec and parts of the U.S. Midwest are about to have a large portion of their oil supply cut off on May 13, less than two weeks from now. Last November, Gretchen Whitmer, the Democratic governor of Michigan, signed an executive order that requires Calgary-based Enbridge Inc. to shut down its Line 5 pipeline. The line carries Alberta and Saskatchewan oil and liquefied natural gas to refineries in Ontario, Ohio and Michigan. It is the biggest artery for Canadian oil exports to the U.S. Whitmer’s government believes the 68-year-old Line 5, which runs from Superior, Wisc., to Sarnia, Ont., via Michigan, poses an unacceptable risk of a “catastrophic” oil spill threatening the entire Great Lakes ecosystem. To be sure, the chances of Line 5 abruptly closing are slight. The governor’s order has been challenged by Enbridge in U.S. federal court. The court is unlikely to grant Whitmer’s request for an injunction shutting down Line 5. But that won’t resolve this dispute, which is poised to be fought over for years in the courts and before regulatory panels in the U.S. and Canada. Even in the midst of a pandemic, this imbroglio is commanding Canada’s full attention. Just over three weeks after losing one pipeline skirmish with America – U.S. President Joe Biden’s killing of the Keystone XL pipeline expansion on his first day in office, over Prime Minister Justin Trudeau’s objections – the Trudeau government is determined not to lose this pipeline fight. Trudeau has personally lobbied Biden to keep Line 5 open. And he has deployed his top cabinet officers and U.S. diplomats to do the same with their Biden administration counterparts, and with Whitmer, members of the U.S. Congress, and governors of other states that would be affected by a Line 5 closure. What makes this jousting unusual is that two sides are equally committed to one of the world’s most aggressive fights against climate crisis. And, in essence, what each side is trying to do is square a circle. What’s playing out in this dispute is the same quandary of economics vs. environment that characterizes the climate-crisis fight everywhere. Canada and the U.S. each still need the fossil-fuel energy carried by Line 5. Alternative energy sources are not yet sufficient to replace it. Line 5 is the largest conduit of Canadian oil to the U.S., a key to America’s energy self-sufficiency. And Canada, the world’s sixth-largest oil producer, exports about 80 per cent of its oil production to the U.S., its sole export customer. At the same time, though, Canada and the U.S. are trying with unprecedented urgency to reduce their carbon footprints. And among the most politically charged symbols of climate crisis are oil and gas pipelines. The focal point of this dispute is a dual-pipeline segment of Line 5 that stretches a mere six kilometres under the ecologically sensitive Straits of Mackinac, which connect Lake Michigan and Lake Huron. The straits have been described by environmentalists as one of the worst places on Earth to have built a pipeline that carries toxic material.
‘Irreparable consequences’: First Nations group slams Ottawa for protecting Line 5 pipeline — The federal Liberal government is putting Canada’s oil and gas industry ahead of the Great Lakes by opposing Michigan’s efforts to shut down theLine 5 pipeline, says a prominent group of Ontario First Nations.The Anishinabek Nation said Thursday it is disappointed that Ottawa is pushing back against Michigan Gov. Gretchen Whitmer’s order that Enbridge Inc. stop operating the cross-border pipeline next week.The federal government is considering taking action under the 1977 Transit Pipelines Treaty with the United States that allows for the uninterrupted flow of energy between the two countries.And yet it is willing to ignore the treaties Canada has signed with the 39 First Nations in Ontario that are represented by Anishinabek, said Grand Council Chief Glen Hare.”It is upsetting to see that the government of Canada will pick and choose which treaties to uphold based on convenience and profit,” Hare said in a statement.”Should anything that’s being transported in these 67-year-old pipelines get into the Great Lakes, it would have devastating effects and irreparable consequences.” But so too would shutting down the pipeline, Liberal, New Democrat and Conservative MPs alike agreed Thursday during an emergency debate on what both the government and the official Opposition consider a potential economic and diplomatic crisis.
Possible shutdown of Line 5 not a threat to Canada’s energy security: ambassador –Canada’s ambassador to the United States says that while the potential shutdown of Line 5 is a serious issue, it’s not a threat to Canada’s national energy security. “It is not a threat to Canada’s national economic or energy security,” Kristen Hillman told CBC News Network’s Power & Politics on Thursday.”I think that it is an important dispute or disagreement that exists between Enbridge and the state of Michigan that needs to be taken very seriously. And we are taking it very seriously.”Line 5, which runs through Michigan from the Wisconsin city of Superior to Sarnia, Ont., crosses the Great Lakes beneath the environmentally sensitive Straits of Mackinac, which link Lake Michigan to Lake Huron.The pipeline carries petroleum east from Western Canada. Once it hits Ontario, most of the crude oil is turned in to fuels that meet almost 50 per cent of the province’s fuel demands. The remainder of the supply is sent on to Quebec refineries through Line 9, where it provides 40 to 50 per cent of that province’s fuel supply.
Long-unreported pipeline leak should be a wakeup call for Wisconsin — The Enbridge Line 3 tar sands oil pipeline project in Minnesota is now 50% complete as those opposed to the pipeline attempt to stop it through legal actions, advocacy, protests, and prayers. The recent news from Fort Atkinson that Enbridge waited more than a year to alert Wisconsin officials that one of its pipelines – Line 13, also called Southern Lights – had leaked over 1,200 gallons of a petroleum substance called diluent, should be a wakeup call to people who understand the value of clean water and recognize the dangers of taking it for granted.Enbridge uses diluent to thin crude oil, allowing it to flow through pipes that stretch from Western Canada to the U.S. Gulf Coast, where the diluent is separated. Enbridge pipelines also pump diluent from the Gulf Coast and Midwest back to Western Canada – to help move more petroleum. Knowing the history of Enbridge pipeline failures and the fact that Enbridge kept Wisconsin in the dark about this one begs the question: should Wisconsin and every other state along the pipeline route trust that the water they drink is safe? A serious underground leak involving benzene, toluene, and trichloroethene seeping undetected into groundwater might be worse than a more visible failure.At a minimum, states should use independent testing services that report directly to them to look for leaks. Presently, 180,000 barrels of diluent per day move through the Southern Lights pipeline. If the new Line 3 pipeline is completed and the old Line 3 pipeline is abandoned, the volume of Line 3 crude oil will more than double, requiring a corresponding increase in diluent, presumably through the Southern Lights pipeline.A better plan would be to stop the Line 3 project because of the high risk it poses to our health and the environment. Diluent leaks are just the tip of the iceberg. The project disregards Native American treaty rights and environmental concerns, including climate change. The pipeline crosses wetlands, streams, and rivers, including two crossings of the Mississippi. Line 3 would accommodate the equivalent of fifty coal-fired power plants of greenhouse gases into the atmosphere. In Minnesota, the Public Utilities Commission approved the project, but the Department of Commerce is fighting it, arguing that the need for the project has not been established. Since the project was proposed and controversy began, renewable energy technologies have improved and capacity has expanded, technologies and strategies for storing energy to meet peak loads on power grids have matured, and the pandemic has reduced demand for oil.
Climate and Indigenous Protesters Across 4 Continents Pressure Banks to #DefundLine3 — From fake oil spills in Washington, D.C. and New York City to a “people mural” in Seattle spelling out “Defund Line 3,” climate and Indigenous protesters in 50 U.S. cities and across seven other countries spanning four continents took to the streets on Friday for a day of action pushing 20 banks to ditch the controversial tar sands pipeline.”Against the backdrop of rising climate chaos, the continued bankrolling of Line 3 and similar oil and gas infrastructure worldwide is fueling gross and systemic violations of human rights and Indigenous peoples’ rights at a global scale,” said Carroll Muffett, president of the Center for International Environmental Law.”It’s time for the big banks to recognize that they can and will be held accountable for their complicity in those violations,” Muffett added. His organization is part of the Stop the Money Pipeline coalition, more than 150 groups that urge asset managers, banks, and insurers to stop funding climate destruction. The global protests on Friday follow on-the-ground actions that have, at times, successfully halted construction of Canada-based Enbridge’s Line 3 project, which is intended to replace an old pipeline that runs from Alberta, through North Dakota and Minnesota, to Wisconsin. The new pipeline’s route crossesAnishinaabe treaty lands.Simone Senogles, a Red Lake Anishinaabe citizen and organizer for Indigenous Environmental Network, declared that “no amount of greenwashing and PR can absolve these banks from violating Indigenous rights and the desolation of Mother Earth.””By giving credit lines to Enbridge, these institutions are giving the oil company a blank check to attack Anishinaabe people, steal our lands, and further guide this planet into climate chaos,” Senogles said. “Those who financially back Enbridge are directly implicated in its crimes. To put it bluntly, blood is on their hands.”The Stop the Money Pipeline coalition launched the #DefundLine3 campaign in February. Appearing on Democracy Now! Friday, Jackie Fielder of Stop the Money Pipeline noted that “Line 3 would result in an additional 193 million tons of greenhouse gases every single year, and it violates Indigenous rights of the Anishinaabe people and their right to free, prior, and informed consent.”
PIPELINES: Lawsuit targets Army Corps permitting program — Monday, May 3, 2021 — Environmental groups today sued the Army Corps of Engineers over its streamlined permitting program for authorizing pipelines to cross through rivers, streams and wetlands.
Army Corps sees no cause to shut Dakota pipeline during review -filing (Reuters) – The U.S. Army Corps of Engineers said it does not believe a judge should order the Dakota Access oil pipeline shut while environmental review continues, according to court filings on Monday. The Dakota Access Pipeline (DAPL), which came into service in 2017, has been the subject of a lengthy court battle between Native American tribes seeking its closure and the pipeline operators, led by Energy Transfer. The Corps’ position is consistent with statements it made before the court last year. A U.S. district judge for the District of Columbia threw out a permit last year for DAPL to cross under the Dakotas’ Lake Oahe, a drinking-water source for Native American tribes, and ordered a review of the pipeline. The Army Corps said on Monday that it expected to complete an environmental review of the 570,000-barrel-per-day DAPL out of North Dakota by March 2022, when it will consider whether to issue a new permit for the line. That judge is now considering whether to grant a request by Native tribes to require that the line cease flows and be emptied while the assessment is carried out. The Corps, under the direction of President Joe Biden, said at a hearing last month it had no immediate plans to force a DAPL closure. “The Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing,” it said in Monday’s filing. DAPL’s operators intend to seek U.S. Supreme Court review in the case, according to a filing last week.
Environmental groups sue Army Corps of Engineers over pipeline permitting –A coalition of five environmental groups on Monday sued the U.S. Army Corps of Engineers, saying the corps did not properly analyze environmental impacts when issuing a broad pipeline permit.The plaintiffs, which include the Center for Biological Diversity, Sierra Club, Friends of the Earth, Waterkeeper Alliance and Montana Environmental Information Center, filed the lawsuit in federal court in Montana.The permit at issue, Permit 12, is a so-called nationwide permit that streamlines the pipeline permitting process. The corps estimates its 2021 version will be used more than 40,000 times over the next five years.In the lawsuit, the plaintiffs argue that although national permits are intended for activities with negligible environmental impacts, the projected uses of Permit 12 will affect more than 3,000 acres of U.S. waters and threaten endangered species. It would also allow major pipelines to begin construction under the nationwide permitting process instead of undergoing stricter regulatory scrutiny.The lawsuit further argues that the permit violates the Clean Water Act and the National Environmental Policy ActWhile the Biden administration has called for a review of nationwide permits, it has also allowed the 2021 version of Permit 12, reissued in the final days of the Trump administration, to take effect, according to the lawsuit.”The Corps’ failure to comply with bedrock environmental laws requires immediate attention,” Jared Margolis, a senior attorney at the Center for Biological Diversity, said in a statement. “There’s simply no justification for allowing destructive and dangerous pipelines to avoid rigorous environmental review, and it’s disheartening to see the Corps continue to flaunt its obligation to protect our nation’s waters and imperiled wildlife.””Nationwide Permit 12 is a tool for corporate polluters to fast-track climate-destroying oil and gas pipelines and exempt them from critical environmental reviews and consultations,” added Sierra Club senior attorney Doug Hayes. “While the Biden administration has promised a review of the Corps’ program, it has allowed this new permit to take effect in the meantime, a delay which is detrimental to wildlife, waterways and our climate. There’s no time to waste in eliminating this process, which only serves to bolster the oil and gas industry’s bottom lines.” A federal court ruled in a separate lawsuit that the permit’s 2017 iteration was a violation of the Endangered Species Act. In July 2020, the Supreme Court reinstated it, but declined to renew it specifically for the Keystone XL pipeline.
Corps: Dakota Access oil pipeline to stay open during review (AP) – The Biden administration on Monday reiterated that the Dakota Access oil pipeline should continue to operate while the U.S. Army Corps of Engineers conducts an extensive environmental review, although the Corps said again that it could change its mind.The Standing Rock Sioux and other tribes have filed for an injunction asking U.S. District Judge James Boasberg to shut down the pipeline while the Corps conducts a second review, expected to be completed by March 2022. The tribes and environmental groups, encouraged by some of Biden’s moves on climate change and fossil fuels, were hoping he would step in and shut down the pipeline north of the reservation that straddles the Dakotas border.Instead, the Corps in an update ordered by the judge repeated its stance from last month’s hearing that the shutdown issue remains in Boasberg’s lap.”It is possible that in the EIS process the Corps would find new information,” the document stated, referring to the environmental impact statement, “but to date the Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing.” Earthjustice attorney Jan Hasselman, who represents Standing Rock, reacted by citing Biden’s discussion with world leaders on addressing climate change and the president’s promise to be more sensitive to concerns by Indigenous leaders and tribal governments.”Given all this, it’s baffling that when it comes to the Dakota Access pipeline, Biden’s Army Corps is standing in the way of justice for Standing Rock by opposing a court order to shut down this infrastructure while environmental and safety consequences are fully evaluated,” Hasselman said. Attorneys for the pipeline’s Texas-based owner, Energy Transfer, have argued that shuttering the pipeline would be devastating financially to several entities, including North Dakota, and the Mandan, Hidatsa and Arikara Nation tribe. Standing Rock said preventing those economic losses should not come at the expense of other tribes, especially when Boasberg’s decision to strip the project of a key federal permit has been supported by the D.C. Circuit Court of Appeals.Standing Rock, which draws its water from the Missouri River, says it fears pollution. The company says the pipeline is safe. Boasberg ordered further environmental study after determining the Corps had not adequately considered how an oil spill under the Missouri River might affect Standing Rock’s fishing and hunting rights, among other things. A federal panel later upheld the judge’s ruling, but did not go as far as shutting down the pipeline.
Biden Administration Lets DAPL Oil Continue to Flow Without Permit – The Biden administration told a federal judge on Monday that the Dakota Access Pipeline should be allowed to continue pumping oil despite lacking a key federal permit. The Army Corps of Engineers, which is conducting another extensive environmental review, said it could change its mind. Early last month, the Army Corps surprised Judge James Boasberg, and outraged lawyers representing the Standing Rock Sioux, when it said it wasn’t sure if the oil pipeline should be shut down.”It’s baffling,” Earthjustice attorney Jan Hasselman said in a statement. “When it comes to the Dakota Access Pipeline, Biden’s Army Corps is standing in the way of justice for Standing Rock by opposing a court order to shut down this infrastructure while environmental and safety consequences are fully evaluated.”
ENVIRONMENTAL JUSTICE: Dakota Access decision snarls Biden’s equity progress — Wednesday, May 5, 2021 —President Biden’s vows to overhaul the Army’s long-standing strained relationship with Native American tribes hit a snag this week when his administration backed continued operation of the controversial Dakota Access pipeline.
PIPELINES: Biden admin asks court to drop Keystone XL lawsuit — Thursday, May 6, 2021 — The Biden administration this week asked a federal appeals court to close out a dispute over a key permit for the now-suspended Keystone XL pipeline.
TC Energy posts C$1 bln quarterly loss on Keystone XL suspension –Canadian pipeline operator TC Energy on Friday swung to a loss in the first quarter, hit by C$2.2 billion ($1.81 billion) impairment charges related to the suspension of its Keystone XL pipeline project. TC Energy posts C$1 billion quarterly loss on Keystone XL suspension- oil and gas 360 Source: Reuters The pipeline was planned to carry 830,000 barrels per day of heavy crude from Canada’s Alberta province to Nebraska in the United States. The company said the charge was related to halting work on the Keystone XL pipeline and a reassessment of related projects like the Heartland Pipeline, after U.S. President Joe Biden revoked a key permit for the project in January. TC Energy, whose new Chief Executive Francois Poirier took the helm in January, owns the largest network of natural gas pipelines in North America as well as the existing Keystone oil pipeline and power and storage assets. The company posted a C$2.51 billion loss from its oil pipelines, of which Keystone is the biggest contributor, compared with a C$411 million profit in the same period last year. It reported net loss attributable to shareholders of C$1.1 billion, or C$1.11 per share, in the three months ended March 31 compared with a profit of C$1.1 billion a year earlier.
PIPELINES: Developer to decide Keystone XL’s fate next month — Friday, May 7, 2021 — Developers of the Keystone XL pipeline have not yet given up on the crude oil project, even after President Biden threw out a permit for the conduit to cross the U.S.-Canada border earlier this year.
EPA hits troubled Virgin Islands oil refinery with a violation notice – A giant oil and gas refinery was served with a “notice of violation” by the Environmental Protection Agency following two major accidents that released noxious fumes and a chemical-filled vapor cloud over nearby neighborhoods in the U.S. Virgin Islands.The EPA said Monday that Limetree Bay Refining was served with the notice because the company failed to operate five monitoring stations to gauge the air quality around its plant, a major source of harmful greenhouse gas emissions. The company also failed to operate a meteorological tower.”A major source of air pollution, such as Limetree Bay, is subject to controls under its air permits,” the agency said in a statement. “Limetree Bay may be liable for civil penalties and required to take actions to correct the violations.”The company has 30 days to request a video conference to discuss or contest the notice of violation.In a statement Monday, the firm contested EPA’s allegations.”We strongly disagree with the claim that we are in violation of any ambient air monitoring requirement,” it said. “The former refinery operator was required to perform area monitoring, but that requirement was linked exclusively to their burning of sulfur-containing residual fuel oil, which Limetree Bay does not do.”The plant’s previous owner, Hovensa, stopped operating five sulfur dioxide monitoring stations when it shut down in 2012 in the wake of financial problems and a multimillion-dollar settlement with EPA over environmental violations. At the time, according to the notice, Hovensa pledged to reactivate the monitors if it restarted.A Limetree employee informed the EPA on Feb. 16 – more than two weeks after the plant started running again – that it was not operating the air monitors, the notice added.Short-term exposures to high levels of sulfur dioxide can damage the human respiratory system. People with asthma, especially children, are vulnerable.”EPA issued this notice of violation to protect the people who live near and work at this refinery, and we have also deployed a team of experts to St. Croix and are working to assess Limetree Bay’s compliance with environmental laws,”
Oil spillage tackled at marina to protect wildlife –ENVIRONMENT officials have tackled an oil spillage in a marina in East Yorkshire.The Environment Agency tweeted that its field team went to the marina in Goole this morning to help to clear up some oil that had leaked into the water. It said pads and bunds were used to contain and soak up the oil and prevent any damage to wildlife in nearby rivers.
Norway regulator to investigate Equinor oil spill {Reuters} – The Norwegian Petroleum Safety Authority is investigating an oil spill incident at the Gullfaks C platform in the North Sea early last week. The discharge to the sea is thought to be connected to start-up of production from the Tordis field, a tieback to the platform. Operator Equinor estimates the size of the spill at 17.5 cu m (618 cu ft) of oil.
Oil spill: Rivers communities demand N800bn compensation The people of Nvakaohia- Rumuekpe in Emohua Local Government Area of Rivers State have demanded N800 billion compensation as damages from Total E&P Nigeria Limited over oil spill that occurred in their area. They made the demand at a joint press briefing between the Integrity Friends for Truth and Peace Initiative (TIFPI), chiefs, Community Development Committees (CDCs) and stakeholders of the affected area. Executive Director, TIFPI and Convener, Ikwerre People’s Congress (IPC), Livingstone Wechie, who read their address, said the multi-national oil company should carry out remediation on the polluted Nvakaohia- Rumuekpe made up Ovelle, Imogu and Ekwutche communities in Emohua LGA, Rivers. Wechie alleged that the firm had operated in the three communities for over six decades and dozens of natives had lost their lives in the last 10 years, as a result of environmental pollution. “That Total E&P Nigeria Ltd should pay N800 billion as compensation of Nvakaohia-Rumuekpe communities for the destruction on the various tortuous acts and injustices.There should be immediate supply of potable water to save life in Nvakaohia-Rumuekpe, building of hospitals, medical intervention, relief materials, construction of IDP camps to accommodate and return the people back from their current refugee status to avert the complete extinction of Nvakaohia clan in Rivers State. “That a joint Environmental Impact Assessment (EIA) be immediately conducted in Nvakaoha-Rumuekpe between Total E&P Nigeria Ltd and Nvakaoha-Rumuekpe community and to ensure that remediation, cleanup and adequate compensation etc should be paid to Nvakaoha-Rumuekpe for the damages and degradation caused in the communities on account of years of oil spill.
NOC takes action to control Tobruk oil spill, AGOC denies responsibility Tobruk Mayor Faraj Boual Khattabia formed a committee to address the issue of the oil spill in Tobruk, which presented its first plans this week to avoid the diesel from spreading into the sea, the first step was to erect a barrier around it. In a press conference, Boual Khattabia also expressed concern about diesel spreading into the city’s desalination plant. He demanded that the National Oil Corporation (NOC) and the Ministry of Water investigate the oil spill, which he said is endangering the health of all Tobruk residents. Boual Khattabia also emphasized the need for a clarification from the Arabian Gulf Oil Company and the Brega Petroleum Marketing Company about the oil leak at the city’s desalination plant, which contaminated the water. The head of the NOC’s health and safety division attended the meeting in Tobruk. Involved in the process is a working team from the oil firms Arabian Gulf Oil Co. (AGOC) and Brega Petroleum Marketing Co. (BPMC). The companies have all sent their spill response teams to deal with the situation. They intend to collect the diesel and clean up the area in order to protect the environment and maintain water quality. The Arabian Gulf Oil Company on their end has denied all blame for the fuel oil spill, which has reached the Corniche of Tobruk. The company said in a statement that reports that the AGOC caused the spill were false and that the chairman of the company’s management committee, Fadlallah Ahtiati, who was tasked with investigating the situation in all respects, stated that the company was not responsible for the spill.
Work to remove oil from stricken tanker off China nearly finished (Reuters) – Efforts to remove the cargo of an oil tanker that leaked oil into the Yellow Sea near China’s Qingdao after a collision last week should be completed later on Tuesday, the vessel’s manager said. The A Symphony was anchored roughly 40 nautical miles off the coast of Qingdao when it was struck in dense fog by the bulk carrier Sea Justice on April 27. The collision ruptured A Symphony’s cargo and ballast tanks, causing it to leak roughly 400 tonnes of its bitumen mix cargo. A Symphony’s manager, Goodwood Ship Management, said there were no injuries to the crew, and clean-up operations commenced as soon as weather conditions improved enough to allow specialist cleaning and repair vessels to travel to the site. (Graphic: Other ships steer clear of ‘A Symphony’ as oil spill clean-up continues off Qingdao, China – https://fingfx.thomsonreuters.com/gfx/ce/oakpewkajpr/ASymphonyVesselGap.png) Work to unload the tanker’s cargo, known as lightering, has continued since Friday, Goodwood said in a statement, and when complete the vessel will depart for further assessment and repairs. The company has yet to confirm which shipyard will handle the repairs. (Graphic: Bulk carrier collides with oil tanker at Qingdao Bulk carrier collides with oil tanker at Qingdao – https://graphics.reuters.com/CHINA-OIL/SPILL/qzjvqzlbapx/chart.png) The 272 metre-long, 46 metre-wide oil tanker was sold in May 2019 to its new owners Symphony Shipholding SA and NGM Energy, Equasis data showed.
Cargo removed from stricken tanker off China, preparing for voyage to repair yard (Reuters) – Cargo onboard a tanker that leaked oil off China has been removed and preparations are underway so the vessel can sail to a Chinese repair yard, the ship’s manager said on Wednesday. The A Symphony was anchored roughly 40 nautical miles (74 km) off the coast of Qingdao when it collided with the bulk carrier Sea Justice in dense fog on April 27. The collision ruptured A Symphony’s cargo and ballast tanks, causing it to leak roughly 400 tonnes of its bitumen mix cargo. Work has taken place in recent days to unload the tanker’s cargo, known as lightering. The vessel’s manager, Goodwood Ship Management, said in an email that the cargo transfer had been completed and the ship was undergoing tank cleaning operations, which were expected to be completed in the next 72 hours. The vessel will then proceed to China’s CUD Weihai shipyard for repairs, Goodwood said. The yard is located along the Yellow Sea.
Oil Prices Slip As India’s Surging Cases Dampen Demand Hopes | Al Bawaba –Oil was down Monday morning in Asia as ever-surging COVID-19 cases in countries such as India dampen fuel demand hopes. Brent oil futures edged down 0.18% to $66.64 by 11:06 PM ET (3:06 AM GMT) and WTI futures edged down 0.13% to $63.50. India, the third-largest oil importer globally, continues to fight its second wave of COVID-19 cases. The daily number of COVID-19 cases passed the 400,000-mark on May 1, before inching back down to 392,488 the next day, according to the country’s Ministry of Health and Family Welfare. The record numbers led the Confederation of Indian Industry to urge authorities to curtail economic activity. However, losses were capped as fuel demand is expected to rebound in countries such as China in the second half of 2021. Accelerating COVID-19 vaccination rates are expected to raise global fuel demand, especially during the upcoming peak summer travel season. “Strong demand in regions such as North America, Europe and China has brightened the overall outlook,” ANZ analysts said in a note. On the supply front, the Organization of the Petroleum Exporting Countries produced 25.17 million barrels per day in April, up 100,000 barrels from March. In the U.S., energy firms added oil and natural gas rigs to a ninth consecutive monthly rig count increase during the previous week as prices recovered, said Baker Hughes. U.S. crude oil production, however, fell by over a million barrels per day in February to the lowest levels since Oct. 2017, according to Friday’s monthly government report. Meanwhile, the U.S. and Iran are discussing reviving a nuclear deal, which could help life U.S. sanctions and allow Iran to bolster its oil exports.
Oil prices rise amid demand hopes – (Xinhua) — Oil prices advanced on Monday as hopes for demand recovery outweighed worries about surging COVID-19 infections in India. The West Texas Intermediate for June delivery added 91 cents to settle at 64.49 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery increased 80 cents to close at 67.56 dollars a barrel on the London ICE Futures Exchange. Oil prices also garnered some support from a weaker U.S. dollar. The dollar index, which measures the greenback against six major peers, slid 0.37 percent to 90.9487 in late trading on Monday. Historically, the price of oil is inversely related to the price of the U.S. dollar.
Oil up a second day on bets for higher demand as U.S., Europe ease COVID restrictions -Oil futures post a gain for a second session on Tuesday, finding support as traders bet that easing COVID-19 restrictions in the U.S. and Europe will lead to higher fuel demand as the market approaches the summer travel season.”From here on out the thing to watch will be air travel,” said James Williams, energy economist at WTRG Economics. “Domestic and international air travel will continue to improve despite the difficulties in India,” he said. Given the “lifting of so many restrictions in the U.S. and the pent up demand for vacations, we should see a strong uptick in U.S. gasoline consumption this summer.”West Texas Intermediate crude for June delivery rose $1.20, or 1.9%, to settle at $65.69 a barrel on the New York Mercantile Exchange. July Brent crude , the global benchmark, added $1.32, or almost 2%, at $68.88 a barrel on ICE Futures Europe. Both contracts settled at their highest since March, according to Dow Jones market Data.In the U.S., demand is surging, and combined with plans to ease U.K. restrictions on air travel, those developments are “offsetting concerns about demand destruction in India and the worries about the return of supply from Iran,” said Phil Flynn, senior market analyst at The Price Futures Group.The European Commission on Monday proposed welcoming fully COVID-19-vaccinated travelers and tourists from countries with “a good epidemiological situation.” European airline shares jumped (link). In the U.S., several states began lifting or announced plans to lift or ease lockdown restrictions (link). The average number of new cases in the U.S. fell below 50,000 a day for the first time since October (link). Nearly 1.67 million people were screened at U.S. airport checkpoints on Sunday, according to the Transportation Security Administration, the highest number since mid-March of last year.”Europe’s plans to curb travel restrictions is music to the ears of oil bulls. When added to Fed Chair Powell’s comments that the U.S. economic recovery is making real progress, this is supportive of higher oil prices,” said Sophie Griffiths, market analyst at Oanda, in a note.The improving picture in the U.S. and Europe stands in contrast to India, the world’s third-largest oil importer, where a deadly surge in COVID cases has yet to let up. Indian hospitals remain overwhelmed by cases and lacking in supplies including oxygen.See: (link)India’s COVID-19 crisis is a ‘crime against humanity,’ says prizewinning author as nation sets new case record (link)Indian Prime Minister Narendra Modi, meanwhile, is “vowing to not shut down the Indian economy despite a lot of outside pressure to do so,” Flynn said in a Tuesday note.But WTRG’s Williams thinks the market is “underestimating India’s negative impact on demand.”Meanwhile, data from Bloomberg revealed that the Organization of the Petroleum Exporting Countries kept oil production mostly steady in April ahead of output increases that kicked in this month. OPEC pumped an average of 25.27 million barrels a day in April, roughly 50,000 barrels a day less than in March, according to the Bloomberg survey (link).
Oil gains nearly 2% as demand optimism continues to counteract India’s covid case surge –Oil prices rose on Tuesday after more U.S. states eased lockdowns and the European Union sought to attract travellers, though soaring COVID-19 cases in India capped gains. Brent crude futures were up $1.01, or 1.48%, at $68.50 a barrel after climbing by 1.2% on Monday. U.S. West Texas Intermediate (WTI) crude futures settled $1.20, or 1.86%, higher at $65.69 per barrel, after a 1.4% jump on Monday. Both contracts were up about 2% in earlier trade. “Markets were optimistic coming into the day, boosted by flight movement between U.S. and Europe,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Demand for diesel fuel, including jet, has suffered during the pandemic, weighing down global oil markets. Prices are being supported by the prospect of a pick-up in fuel demand as New York state, New Jersey and Connecticut look to ease pandemic curbs and the EU plans to open up to foreign visitors who have been vaccinated, analysts said. “The current strength is led by U.S. gasoline, where demand is seen as healthy as more motorists take to the roads,” said PVM Oil Associates analyst Tamas Varga. “Yesterday’s stock market strength is being followed through this morning in the oil market … the market focuses on the successful rollout of vaccine programmes in the U.S. and in other developed countries and not on the devastation in India and Brazil.” For further signs of rising U.S. oil demand, traders will be watching for reports on crude and product stockpiles from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday. Five analysts polled by Reuters estimated on average that U.S. crude inventories fell by 2.2 million barrels in the week to April 30. Oil inventories rose in the previous two weeks. The rate of refinery utilisation was expected to have increased by 0.5 percentage point last week, from 85.4% of total capacity in the week ended April 23, the poll showed. A weaker dollar, hit by an unexpected slowdown in U.S. manufacturing growth, also helped to shore up oil prices on Tuesday. The lower dollar makes oil more attractive to buyers holding other currencies. In India, the total number of infections surpassed 20 million after the country again registered more than 300,000 new cases, which is expected to hit fuel demand in the world’s second-most populous country. “Strong demand forecasts for the second part of 2021 are providing a bullish seat for traders to drive rallies, not allowing any strong negative price reaction to drag for long, even at times of crisis, such as the recent one in India,” said Rystad Energy analyst Louise Dickson. “In fact, looking at balances going forward, prices will likely climb again to about $70 per barrel in the coming months, unless we see another policy change by OPEC+.”
WTI Extends Gains After Biggest Crude Draw Since January –A stronger dollar and a hawkish Yellen were not enough to slow oil’s rebound as more US states eased lockdowns and the European Union sought to attract more travellers, which would help offset weakened fuel demand in India as COVID-19 cases soar.“Gasoline inventories in the U.S. are well below where they were a year ago and we’ve taken out refinery capacity,” said Peter McNally, global head for industrials, materials and energy at Third Bridge.“We’ve seen the impact on demand as more people get vaccinated, so we’re going to get that tailwind plus seasonality coming later this month.”While OPEC kept its crude production steady in April, ahead of a planned output hike this month, all eyes will be on signs of demand picking up in US crude stocks. API
- Crude -7.688mm
- Cushing +548k
- Gasoline -5.308mm
- Distillates -3.453mm
The last few weeks have seen very modest changes in crude stocks and analysts expected inventories to have fallen last week, and it did in a big way. Crude stocks fell 7.688mm barrels – the biggest weekly draw since January
Oil Up Over Huge Draw in U.S. Crude Supplies, Fuel Demand Hopes – – Oil was up Wednesday morning in Asia over a record fall in U.S. crude supplies and growing expectations that re-opening drives in the U.S. and Europe will boost fuel demand. However, investors are also keeping an eye on ever-surging numbers of COVID-19 cases in parts of Asia.Brent oil futures rose 2.68% to $69.37 by 12:24M ET (4:24 AM GMT), closing in on the $70 mark. WTI futures jumped 2.64% to $66.19.U.S. crude oil supply data from the American Petroleum Institute showed a draw of 7.688 million barrels for the week ended Apr. 30, in what is set to be the largest drop since late January 2021. The draw exceeded the 2.191-million-barrel draw in forecasts prepared by Investing.com and the 4.319-million-barrel build recorded during the previous week.Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.U.S. President Joe Biden said on Tuesday that the U.S. aims to vaccinate 70% of U.S. adults with at least one COVID-19 shot by the Independence Day holiday on Jul. 4. In the U.K., Prime Minister Boris Johnson said the country is set to lift lockdown rules in seven weeks.Investors are betting that the accelerating COVID-19 vaccination rate will help oil prices return to pre-COVID-19 conditions in key markets. The European Union plans to ease curbs for the upcoming peak summer travel season, while states around the New York region in the U.S. will lift most of the COVID-19 capacity restrictions on businesses. G20, a group of the world’s top 20 major economies, plans to introduce so-called vaccine passports to boost travel and tourism. However, India, the third-largest oil importer globally, topped 20.2 million COVID-19 cases by May 5, according to Johns Hopkins University data. Elsewhere in Asia, countries including Singapore, Vietnam and Seychelles, have recently reported increasing numbers of COVID-19 cases.
WTI Holds Gains Above $66 After Big Crude Draw —Oil prices are up for a third straight day this morning as the easing of lockdowns in the US and parts of Europe prompted hopes of an increase in fuel demand over the summer months and offset concerns about rising COVID-19 infections in India and Japan.“A return to $70 oil is edging closer to becoming reality,” said Stephen Brennock of oil broker PVM.“The jump in oil prices came amid expectations of strong demand as Western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high,” he said.Last night’s surprisingly large crude draw (reported by API) also helped support prices and traders will be looking at the official data to confirm the trend. DOE
- Crude -7.99mm
- Cushing +254k
- Gasoline +737k
- Distillates -2.896mm
Official DOE data confirmed API’s big crude draw but the major product draws were not as gasoline stocks rose unexpectedly and distillates stocks fell but less than API…Distillates stocks fell to their lowest since April 2020 and crude inventories fell to 10-week lows…
U.S. oil prices finish lower as traders reconsider demand prospects – EIA reports a weekly 8 million-barrel drop in U.S. crude supplies. U.S. oil futures on Wednesday ended lower but the global benchmark prices finished slightly higher in a mixed day of trading for oil contracts.Traders reconsidered the outlook for oil demand, despite U.S. data showing the biggest weekly drop in domestic crude supplies since January..West Texas Intermediate crude for June delivery , the U.S. benchmark, fell 6 cents, or nearly 0.1%, to settle at $65.63 a barrel on the New York Mercantile Exchange. Prices traded as high as $66.76, the highest front-month intraday level since March, FactSet data show.July Brent , meanwhile, added 8 cents, or 0.1%, at $68.96 a barrel on ICE Futures Europe, following a climb to as high as $69.95.Oil prices saw gains early Wednesday on expectations that an economic recovery in the U.S. and Europe would lead to higher demand for oil. A U.S. government report also revealed a hefty weekly decline in U.S. crude inventories, but WTI prices turned lower ahead of the trading settlements.Several U.S. states have scrapped or plan to ease lockdown restrictions in coming weeks as COVID infection rates decline. Improved vaccine rollouts and easing restrictions on travel have also contributed to optimism over European fuel demand.Still, India’s hospitals remain overwhelmed by cases (link), exacerbated by a dearth of public-health resources, including oxygen.The “virus is a big wildcard” as India is going to take some time to recover, said Tariq Zahir, managing member at Tyche Capital Advisors. Also, the members of Organization of the Petroleum Exporting Countries are starting to add oil to the market, which could “take some steam out of the energy markets in the months ahead.”On Wednesday, the Energy Information Administration reported that U.S. crude inventories fell (link) by 8 million barrels for the week ended April 30. That was the biggest weekly decline since January. On average, analysts polled by S&P Global Platts forecast a decline of 3.9 million barrels for crude stocks, while the American Petroleum Institute on Tuesday (link) reported a 7.7 million-barrel drop.Meanwhile, the data from the EIA Wednesday also showed crude stocks at the Cushing, Okla., storage hub rose by 200,000 barrels for the week. Gasoline supply inched higher by 700,000 barrels, while distillate stockpiles declined by 2.9 million barrels for the week, according to the EIA report. The S&P Global Platts survey had expected weekly supply declines of 500,000 barrels for gasoline and 1.6 million barrels for distillates.
Saudi set to cut oil prices to Asia for first time this year – Saudi Arabia is likely to reduce the price of its crude oil for Asia in June in what will be the Kingdom’s first price cut this year amid signs of declining demand in India and weakening Dubai benchmark, according to a Reuters survey of Asian refiners.Saudi Arabia, the world’s largest oil exporter, is expected to cut its official selling price (OSP) for the flagship Arab Light grade for Asia in June by an average of $0.28 per barrel, according to sources at Asian refiners Reuters has polled.The expected price cut, if it materializes, would be the first time Saudi Arabia has reduced prices to Asia in 2021. The last time the Saudis lowered the price of crude to their most important market was in December 2020.Uncertainty over demand in the world’s third-largest oil importer, India, as well as the weakest price structure at the Middle Eastern Dubai benchmark in nearly two months, are expected to be the key reasons for a reduction in the Saudi oil prices, according to the Reuters survey.Sales of gasoline in India were the weakest in April since August 2020, officials with knowledge of preliminary data told Bloomberg. Average daily sales of diesel, the most used fuel in the country, slumped in April to the lowest level since last October, according to the preliminary estimates.India’s demand for diesel, gasoline, and jet fuel is expected to further decline in the coming days and probably weeks, with no sign that the second COVID wave in the country would peak within days.In addition, last week, the Dubai benchmark flipped to a slight contango, signaling not-so-tight market. Middle Eastern oil exporters, including Saudi Arabia, price their oil going to Asia off the Oman/Dubai average.
Oil Drops, Factoring in Saudi Price Cut Amid India Covid Carnage – – Oil prices fell more than 1% Thursday, clearly breaking from the rally earlier in the week, as Saudi Arabia’s cut in the selling price of its crude and India’s raging Covid situation offset bullish sentiments over the rebounding U.S. economy and its demand for energy. The Saudi price cut was reported on Wednesday and while it did not immediately impact the market, it filled the void in the latest session where the pandemic in India, the world’s third largest crude buyer, remained the news. Under the cut, the June official selling price for the flagship Arab light crude was dropped by 10 cents from May to $1.70 a barrel, sources said. India has reported more than 300,000 new cases daily in the last two weeks, and overtook Brazil in April to become the second-worst infected country in the world. Cumulatively, coronavirus infections in India reached around 20.67 million with more than 226,000 deaths, according to health ministry data on Wednesday. Several studies of India’s data, however, found that cases were likely severely underreported. “It did not help that Saudi Arabia cut the selling price of oil to India because of Covid demand destruction, reminding traders that risk is still out there,” said Phil Flynn, analyst at Chicago’s Price Futures Group brokerage. New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled down 92 cents, or 1.4%, at $64.71 per barrel. WTI hit an eight-week high of $66.75 on Wednesday, before snapping a four-day rally. London-traded Brent, the global benchmark for crude, closed down 90 cents, or 1.3%, at $68.09. Brent hit an eight-week high of $69.94 in the previous session. Oil rallied earlier in the week on optimism over the U.S. recovery from Covid and data showing a record surge in crude exports from the country and sharply lower domestic petroleum inventories. U.S. crude exports hit a record high of 4.1 million barrels per day, in a breakout above the previous week’s 2.5 million bpd, the Energy Information Administration said in its weekly petroleum supply-demand dataset released Wednesday. Crude imports, meanwhile, fell 1.2 million bpd to reach 5.5 million bpd last week. The combination of these led to a near 8 million-barrel drawdown in crude inventories, the EIA said, compared with analysts’ expectations for a draw of 2.3 million barrels.
Oil Prices Decline Amid Uneven Recovery Signs — Oil declined as the coronavirus crisis in India and a slowing demand rebound in the U.S. highlighted the uneven nature of the global recovery. Futures in New York fell 1.4% Thursday after hitting a nearly two-month high earlier in the week. While signs of rising oil consumption have put prices on track for a weekly gain, spiking Covid-19 cases in major crude importer India is capping gains. At the same time, U.S. gasoline consumption slipped for a second straight week. “What’s keeping the market from going higher are these Covid-19 issues in several countries along with not quite enough of a demand rebound here in the U.S. to juice prices toward that $70-a-barrel mark,” said John Kilduff, founding partner at Again Capital LLC. Despite near-term concerns, oil has rallied more than 30% this year as key economies including the U.S. and China rebound from the depths of the pandemic. Spain’s Cepsa is restarting a processing unit that was previously idled, while U.S. refineries are running at five-year average levels for the first time since the pandemic began. The strength in crude has helped drive the Bloomberg Commodity Spot Index to the highest level in almost a decade. West Texas Intermediate crude for June delivery fell 92 cents to $64.71 a barrel in New York. Brent for July settlement slid 87 cents to $68.09 a barrel. The promise of a summer travel boost is also keeping prices supported, said Bob Yawger, head of the futures division at Mizuho Securities. “With Memorial Day weekend so close here, the gasoline demand scenario is just too strong to see crude oil fall apart.” Elsewhere, Japan plans to extend a state of emergency brought on by Covid until the end of the month, local media reported. The country’s capital, Tokyo, had wanted to extend it in a bid to stem a surge in infections ahead of hosting the Olympics from July.
Global oil prices edge up as investors eye fuel demand recovery – (Reuters) – Oil prices edged up in early Asian trade after a 1% dip in the previous session, as global economic recovery and easing travel curbs in the United States and Europe buoyed the fuel demand outlook while the surging pandemic in India capped prices. Brent crude futures for July were at $68.17 a barrel by 0052 GMT, up 8 cents, while U.S. West Texas Intermediate (WTI) crude for June rose 9 cents to $64.80. Both Brent and WTI are on track for a second weekly gain as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand, while pent-up summer travel is likely to give gasoline and jet fuel consumption a further boost. In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery had entered a new phase amid a booming economy. However, oil demand recovery has been uneven as surging COVID-19 cases in India has reduced fuel consumption at the world’s third-largest oil importer and consumer. Resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of that lost demand has been offset by countries such as China where recent Labour Day holiday travel surpassed 2019 levels. “Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said. “Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”
Oil notches second weekly gain despite India virus surge (Reuters) -Oil edged up slightly on Friday even as the COVID-19 crisis in India worsened, and prices notched a second weekly gain against the backdrop of optimism over a global economic recovery. Brent crude futures ended the session at $68.28 a barrel while U.S. West Texas Intermediate (WTI) crude settled at $64.90 a barrel, both up 19 cents, or 0.3%. The two benchmarks rose by more than 1% on the week, their second consecutive weekly gain, as easing COVID-19 restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand. “Oil prices might still have a positive second consecutive week, but it is nothing to get energy traders excited that oil will break away from its tightening trading range. Oil’s short-term outlook remains very mixed,” Edward Moya, senior market analyst at OANDA said. In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity. However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December. The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer. India on Friday reported a record daily rise in coronavirus cases of 414,188, while deaths from COVID-19 swelled by 3,915, according to health ministry data. “Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM. The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.
Oil giant Saudi Aramco beats estimates with 30% hike in first-quarter profit – Oil giant Saudi Aramco reported a 30% jump in net income Tuesday, in a sign of a continued recovery from the previous year’s oil market crash that saw full-year earnings for the state firm slashed in half. In a release published Tuesday, the company said net income rose to $21.7 billion in the first three months of the year, up from $16.6 billion in the same period last year. It beat some analysts’ estimates of $17.24 billion, despite lower oil production in February and March. The figure nears the firm’s net income level in the first quarter of 2019, which was $22.2 billion. The company said free cash flow in the first quarter of 2021 was $18.3 billion, up from $15 billion over the same period last year. Saudi Arabia’s behemoth oil producer also maintained its dividend, with $18.8 billion due to be paid out in both the first and second quarter. Aramco was forced to drastically cut its capital expenditure last year as the coronavirus pandemic hammered oil prices, and it “continues to explore plans to sell vital assets to raise funds,” said Ellen Wald, president of Transversal Consulting and author of the book “Saudi, Inc.” “It cannot be ignored that the massive dividend commitment and the need to fund the Saudi government budget are weights on the company,” Wald told CNBC on Monday. “That doesn’t mean Aramco isn’t well positioned, but no other major oil company has to deal with these burdens.” “Aramco maintains this because it has the cheapest costs of oil production in the world, with huge oil reserves and is very well managed,” she added. “It has made the commitment to pay the dividend because the dividend is paid to the people of Saudi Arabia who own shares.” The earnings reflect a dramatically improved climate for oil markets since the first quarter of last year, when Aramco reported a 25% fall in net income as it grappled with the initial fallout of the pandemic and cratering global demand. Aramco, like its global peers, has been navigating an uncertain oil price environment and unpredictable global economic recovery. The company described 2020 as “the most challenging year” in its history, and is now benefitting from the recovery in oil markets, with international benchmark Brent crude prices roughly double what they were this time last year. Refining and chemicals margins are also beginning to improve.
Israel About To Enter Post-Netanyahu Era After PM Fails To Form Government — The already lengthy and continuing election deadlock drama in Israeli politics has once again pushed Prime Minister Benjamin Netanyahu to the side, leaving his political future in extreme doubt. His mandate to form a new government has failed for the third time in two years, with the Likud leader’s appointed window for doing so having expired on Tuesday night.The Israeli leader who was been prime minister since 2009 and has consistently focused on a national security platform was unable to strike an agreement with his main rival Naftali Bennett, chairman of the right wing Yamina party, which now shifts the mandate to his rivals in the centrist Yesh Atid party. On Wednesday Israeli’s president formally tapped Yair Lapid – party leader of Yesh Atid – to forge a new government. The clock now starts on his 28 days.
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