Oil, Gas, And Fracking News Read 23May 2021 – Part 1

Written by rjs, MarketWatch 666

Here are some selected news articles from the week ended 22 May 2021. Part 2 is available here.

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

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Gasoline demand at a 14 month high; DUC well backlog falls to 9.1 months

Oil prices fell for the first time in 4 weeks this week, tumbling from a 2 year high to a one month low, on progress toward a deal that would lift sanctions on Iranian crude… after rising 0.7% to $65.37 a barrel last week amid volatility caused by the ransoming of the Colonial pipeline, the contract price of US light sweet crude for June delivery opened higher on Monday, lifted by European economic reopenings and rising U.S. demand and climbed 90 cents to settle at $66.27 a barrel, the highest oil price in over two years, as optimism built around the comeback of fuel demand, despite the persistent Covid-19 flare-ups in parts of Asia…oil prices then rose more than 1% early Tuesday amid bets that energy demand would rise steadily following reopenings of the European and U.S. economies, but plunged after headlines that significant progress had been made on a deal between Iran and the U.S., which would end sanctions and bring more supply to the market, as oil settled 78 cents lower at $65.49 a barrel…prices fell for a second day on Wednesday on the potential of Iranian supply returning, and on fears that inflation might lead the Fed to raise interest rates, with June oil tumbling $2.13, or more than 3% to $63.36 a barrel, on worries that surging Covid-19 cases in Asia would dent demand for crude…oil then slumped to the lowest in nearly a month as traders focused on the likelihood of a renewed nuclear deal with Iran and the potential removal of sanctions on the country’s crude exports, as trading in June oil expired with the contract priced at $62.05 a barrel…with oil prices on Friday referencing the contract for US light sweet crude for July delivery, which had fallen $1.41 to $61.94 a barrel on Thursday, oil rallied from an initial drop on the threat of a possible tropical storm forming in the Gulf of Mexico and settled $1.64 higher at $63.58 a barrel, but still finished the week 2.7% lower on fears that Iran was nearing a nuclear deal that would remove U.S. sanctions, possibly adding two million barrels per day of crude to the market…

Natural gas prices also finished lower for the first time in seven weeks, as production rose and exports fell….after inching up 0.1% to $2.961 per mmBTU last week on strong LNG exports and lower gas field production, the contract price of natural gas for June delivery opened 2% higher on Monday and jumped 14.8 cents or 5% to $3.109 per mmBTU, on forecasts for warmer weather over the next two weeks that was expected to prompt increased air conditioning use….however, gas prices gave up two-thirds of that gain on Tuesday, falling 9.7 cents to $3.012 per mmBTU, as LNG exports fell and as traders said the Monday rally was overcooked and responded by taking profits the next day….prices slid another 4.8 cents on Wednesday on forecasts for milder weather than had been expected and on further export declines, and then fell another 3.9 cents to $2.925 per mmBTU on Thursday following a bearish government gas inventory report…an increase in production in the face of those higher inventories sent gas prices lower again on Friday, settling down 1.9 cents at $2.906 per mmBTU, and thus ending the week 1.9% lower, despite forecasts for record-breaking summer temperatures…

The natural gas storage report from the EIA for the week ending May 14th indicated that the amount of natural gas held in underground storage in the US rose by 71 billion cubic feet to 2,100 billion cubic feet by the end of the week, which left our gas supplies 391 billion cubic feet, or 15.7% below the 2,491 billion cubic feet that were in storage on May 14th of last year, and 87 billion cubic feet, or 4.0% below the five-year average of 2,187 billion cubic feet of natural gas that have been in storage as of the 14th of May in recent years….the 71 billion cubic feet that were added to US natural gas storage this week was above the average forecast of a 67 billion cubic foot addition from an S&P Global Platts survey of analysts, but was below the average addition of 86 billion cubic feet of natural gas that have typically been injected into natural gas storage during the second week of May over the past 5 years, as well as below the 84 billion cubic feet added to natural gas storage during the corresponding week of 2020…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending May 14th showed that despite a big jump in our oil exports, we still had surplus oil remaining to add to our stored commercial crude supplies for the eighth time in thirteen weeks and for the 16th time in the past forty-three weeks….our imports of crude oil rose by an average of 923,000 barrels per day to an average of 6,411,000 barrels per day, after rising by an average of 37,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 1,510,000 barrels per day to an average of 3,306,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,105,000 barrels of per day during the week ending May 14th, 587,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 14,105,000 barrels per day during this reporting week…

US oil refineries reported they were processing 15,116,000 barrels of crude per day during the week ending May 14th, 96,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA’s storage surveys indicated that a net of 83,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 929,000 barrels per day less than what our oil refineries reported they used during the week….to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+929,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or errors of that magnitude in this week’s oil supply & demand figures that we have just transcribed….since last week’s EIA fudge factor was at (+67,000) barrels per day, that also means there was a 838,000 barrel per day balance sheet difference in the “unaccounted for crude oil” figure from a week ago, rendering the week over week supply and demand changes we have just transcribed meaningless….however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we’ll continue to report them as they’re published, just as they’re watched & believed to be accurate by most everyone in the industry….(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 5,991,000 barrels per day last week, which was 10.9% more than the 5,401,000 barrel per day average that we were importing over the same Covid impacted four-week period last year… the 83,000 barrel per day net withdrawal from our crude inventories included a 272,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, which was mostly offset by a 189,000 barrel per day addition to our commercially available stocks of crude oil….this week’s crude oil production was reported to be unchanged at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,500,000 barrels per day, while a 5,000 barrel per day increase in Alaska’s oil production to 456,000 barrels per day had no impact on the rounded national total….our prepandemic record high US crude oil production was at a rounded 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 16.0% below that of our production peak, yet still 30.5% above the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016…

US oil refineries were operating at 86.3% of their capacity while using those 15,116,000 barrels of crude per day during the week ending May 14th, up from 86.1% the prior week, but still well below normal for the month before the summer driving season…while the 15,116,000 barrels per day of oil that were refined this week were 17.2% higher than the 12,903,000 barrels of crude that were being processed daily during the pandemic impacted week ending May 15th of last year, they were still 8.8% below the 16,578,000 barrels of crude that were being processed daily during the week ending May 17th, 2019, when US refineries were operating at a still lower than seasonal 89.9% of capacity…

With this week’s increase in the amount of oil being refined, the gasoline output from our refineries increased by 165,000 barrels per day to 9,753,000 barrels per day during the week ending May 14th, after our gasoline output had increased by 442,000 barrels per day over the prior week…while this week’s gasoline production was 36.1% higher than the 7,166,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 2.2% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 1.3% below the gasoline production of 9,883,000 barrels per day during the week ending May 10th, 2019….meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 102,000 barrels per day to 4,553,000 barrels per day, after our distillates output had increased by 157,000 barrels per day over the prior week… and since the onset of the pandemic last year didn’t appear to impact distillates’ production, this week’s distillates output was still 5.2% lower than the 4,804,000 barrels of distillates that were being produced daily during the week ending May 15th, 2020…

Even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the first time in seven weeks, and for the seventh time in twenty-seven weeks, falling by 1,963,000 barrels to 234,226,000 barrels during the week ending May 14th, after our gasoline inventories had increased by 378,000 barrels over the prior week...our gasoline supplies decreased this week even though our exports of gasoline fell by 161,000 barrels per day to 833,000 barrels per day while our imports of gasoline rose by 145,000 barrels per day to 1,081,000 barrels per day, because the amount of gasoline supplied to US users increased by 424,000 barrels per day to a 14 month high of 9,224,000 barrels per day.…but after this week’s inventory decrease, our gasoline supplies were 8.4% lower than last May 15th’s gasoline inventories of 255,724,000 barrels, and about 2% below the five year average of our gasoline supplies for this time of the year…

Meanwhile, with the decrease in our distillates production, our supplies of distillate fuels decreased for the 12th time in 22 weeks and for the 26th time in thirty-eight weeks, falling by 2,324,000 barrels to 134,419,000 barrels during the week ending May 14th, after our distillates supplies had decreased by 1,734,000 barrels during the prior week….our distillates supplies fell by a bit more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 90,000 barrels per day to 4,058,000 barrels per day, while our imports of distillates rose by 59,000 barrels per day to 267,000 barrels per day, and while our exports of distillates rose by 50,000 barrels per day to 1,193,000 barrels per day….after six consecutive inventory decreases, our distillate supplies at the end of the week were 16.8% below the 158,832,000 barrels of distillates that we had in storage on May 15th, 2020, and about 5% below the five year average of distillates stocks for this time of the year…

Finally, in spite of the big jump in our oil exports, our commercial supplies of crude oil in storage fell for the 16th time in the past twenty-seven weeks and for the 27th time in the past year, decreasing by 1,320,000 barrels, from 485,117,000 barrels on May 14th to 484,691,000 barrels on May 7th, after our crude supplies had decreased by 426,000 barrels the prior week….after this week’s decrease, our commercial crude oil inventories were about 1% below the most recent five-year average of crude oil supplies for this time of year, but were still about 36.7% above the average of our crude oil stocks as of the the second week of May over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels….since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring, our commercial crude oil supplies as of May 14th were 7.9% less than the 526,494,000 barrels of oil we had in commercial storage on May 15th of 2020, but still 1.7% more than the 476,775,000 barrels of oil that we had in storage on May 17th of 2019, and also 10.6% more than the 438,132,000 barrels of oil we had in commercial storage on May 18th of 2018…

This Week’s Rig Count

The US rig count rose for the 32nd time over the past 36 weeks during the week ending May 21st, but it’s still down by 42.6% from the pre-pandemic rig count….Baker Hughes reported that the total count of rotary rigs running in the US was up by 2 to 455 rigs this past week, which was also up by 137 rigs from the pandemic hit 318 rigs that were in use as of the May 22nd report of 2020, but was still 1,474 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business….

The number of rigs drilling for oil was up by 4 to 356 oil rigs this week, after rising by 8 oil rigs the prior week, thus giving us 119 more oil rigs than were running a year ago, but still just 22.1% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014….at the same time, the number of drilling rigs targeting natural gas bearing formations was down by 1 to 99 natural gas rigs, which was still up by 20 natural gas rigs from the 79 natural gas rigs that were drilling a year ago, but still just 6.2% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….meanwhile, the last remaining “miscellaneous” rig, that had been drilling in Midland county Texas in the Permian basin was shut down this week, whereas a year ago two such “miscellaneous” rigs remained active..

The Gulf of Mexico rig count was down by 1 to 14 rigs this week, with all 14 of those rigs drilling for oil in Louisiana’s offshore waters….that was 2 more Gulf of Mexico rigs than the 12 rigs drilling in the Gulf a year ago, when again all 12 Gulf rigs were drilling for oil offshore from Louisiana….since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week’s national offshore rig totals are equal to the Gulf rig counts…however, in addition to those rigs offshore, a rig continued to drill through an inland lake in St Mary parish Louisiana, while there were no such “inland waters” rigs running a year ago…

The count of active horizontal drilling rigs was up by 2 to 412 horizontal rigs this week, which was also up by 127 rigs from the 285 horizontal rigs that were in use in the US on May 22nd of last year, but less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014….meanwhile, the directional rig count was unchanged at 28 directional rigs this week, which was also up by 3 from the 25 directional rigs that were operating during the same week a year ago….on the other hand, the vertical rig count was unchanged at 15 vertical rigs this week, and those were also up by 7 from the 8 vertical rigs that were in use on May 22nd of 2020….

The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of May 21st, the second column shows the change in the number of working rigs between last week’s count (May 14th) and this week’s (May 21st) count, the third column shows last week’s May14th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 22nd of May, 2020..

Notice that with the addition of 2 oil rigs in the Cana Woodford, an oil rig in the Ardmore Woodford, and another oil rig in the Arkoma Woodford, the Oklahoma rig count was up by 4 this week; that’s the largest increase in the state since September of 2018, and the first change in the Oklahoma rig count greater than one in more than 6 months…meanwhile, in Texas, there was an oil rig pulled out of Texas Oil District 1, which would account for the Eagle Ford shale loss, while a rig was added in Texas Oil District 2, apparently not targeting a formation that Baker Hughes documents…elsewhere in Texas, we find that two rigs were pulled out of Texas Oil District 8, which is the core Permian Delaware, while activity in other Texas districts remained unchanged…with the loss of two Permian basin rigs in Texas, that means that the two rigs that were added in New Mexico had to have been added in the far west Permian Delaware, to account for the net unchanged national Permian count….meanwhile, the natural gas rig count was down by one with the removal of a rig from Louisiana’s Haynesville shale, and the additional removal of an oil rig from offshore Louisiana accounts for the two rig decrease in that state..

DUC well report for March

Monday of this past week saw the release of the EIA’s Drilling Productivity Report for May, which includes the EIA’s April data for drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions….that data showed a decrease in uncompleted wells nationally for the 11th month in a row, as both completions of drilled wells and drilling of new wells increased, but remained below the pre-pandemic levels…for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 241 wells, falling from a revised 7,098 DUC wells in March to 6,857 DUC wells in April, which was also 21.2% fewer DUCs than the 8,698 wells that had been drilled but remained uncompleted as of the end of April of a year ago…this month’s DUC decrease occurred as 513 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during April, up from the 464 wells that were drilled in March, while 754 wells were completed and brought into production by fracking, up from the 687 completions seen in March, and up from the pandemic hit 609 completions seen in April of last year….at the April completion rate, the 6,857 drilled but uncompleted wells left at the end of the month represents a 9.1 month backlog of wells that have been drilled but are not yet fracked, down from the 10.8 month DUC well backlog of a month ago, with the understanding that this normally indicative backlog ratio is being skewed by a completion rate that is still around 50% below the pre-pandemic norm…

Both oil producing regions and natural gas producing regions saw DUC well decreases in April, and none of the major basins reported DUC well increases….the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 121, from 3,053 DUC wells at the end of March to 2,932 DUCs at the end of April, as 245 new wells were drilled into the Permian during April, while 366 wells in the region were completed…at the same time, DUC wells in the Niobrara chalk of the Rockies’ front range fell by 39, decreasing from 497 at the end of March to 458 DUC wells at the end of April, as 46 wells were drilled into the Niobrara chalk during April, while 85 Niobrara wells were being fracked….at the same time, there was also a decrease of 26 DUC wells in the Bakken of North Dakota, where DUC wells fell from 673 at the end of March to 647 DUCs at the end of April, as 26 wells were drilled into the Bakken during April, while 52 of the drilled wells in the Bakken were being fracked…..in addition, DUCs in the Eagle Ford of south Texas decreased by 23, from 1,080 DUC wells at the end of March to 1,057 DUCs at the end of April, as 51 wells were drilled in the Eagle Ford during April, while 74 already drilled Eagle Ford wells were completed….meanwhile, the number of uncompleted wells remaining in Oklahoma’s Anadarko decreased by 21, falling from 856 at the end of March to 835 DUC wells at the end of April, as 24 wells were drilled into the Anadarko basin during April, while 45 Anadarko wells were being fracked….

Among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 10 wells, from 576 DUCs at the end of March to 566 DUCs at the end of April, as 73 wells were drilled into the Marcellus and Utica shales during the month, while 83 of the already drilled wells in the region were fracked….in addition, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region saw their uncompleted well inventory decrease by 1 to 362, as 48 wells were drilled into the Haynesville during April, while 49 of the already drilled Haynesville wells were fracked during the same period….thus, for the month of April, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 230 wells to 5,929 wells, while the uncompleted well count in the natural gas basins (the Marcellus, the Utica, and the Haynesville) decreased by 11 wells to 928 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas…

Ohio legislature spending energy on energy legislation –Energy is a hot topic at the statehouse these days. The Ohio General Assembly is reviewing several proposals dealing with energy sources, including solar and wind facilities, oil, gas, and gas pipelines. The proposals raise a critical question about where control over energy production activities should lie: with the state or with local communities? The proposals offer contrasting views on the answer to that question. We reported in March that companion bills H.B. 118 and S.B. 52 were on hold due to conflicts with the proposals, which would have allowed citizens to use the referendum process to reject proposed large scale wind and solar energy developments in their communities. On May 12, the bill sponsors offered a substitute bill to the House Public Utilities Committee. The new approach in the substitute bill would allow a township to adopt a resolution designating all or parts of the township as “energy development districts.” Doing so would allow wind and solar facilities to be constructed within the designated district(s) and would prevent the Ohio Power Siting Board from approving any projects that are not within a designated district. The residents in a township, however, would have the right to petition an energy development district designation and submit it to a vote by township residents. A proposal regarding energy generation from fossil fuels and gas pipelines takes an opposite approach on local control. H.B. 192, sponsored by Rep. Al Cutrona (R-Canfield) would prohibit counties, townships, and municipal corporations from prohibiting or limited the use of fossil fuels for electricity generation and the construction or use of a pipeline to transport oil or gas. About a dozen opponents testified against the bill at its third hearing before the House Energy and Natural Resources in early May, with most arguing that the proposal removes rights of local communities to control their energy sources and violates the home rule authority for municipalities provided in Ohio’s Constitution. A bill that guarantees access to natural gas passed the House of Representatives on May 6, largely along party lines. H.B. 201,sponsored by Rep. Jason Stephens (R-Kitts Hill), guarantees that every person has a right to obtain any available distribution service or competitive retail natural gas service from gas suppliers, and bars a political subdivision from enacting laws that would limit, prevent, or prohibit a consumer within its boundaries from using distribution services, retail natural gas service, or propane. Opponents argue that the bill violates home rule authority and is unnecessary, since no community in Ohio has ever banned the use of natural gas. The bill was referred to the Senate Energy and Public Utilities Committee on May 12.

Ohio lawmakers include language promoting oil and gas in budget bill – The Ohio House version of the 2022-23 state operating budget includes language that would make it state policy to “promote” oil and gas development, exploration and production.The House also added in provisions to make it easier to lease mineral rights under state lands.The state’s oil and gas industry welcomed these small, but significant, changes. Environmental groups are concerned about what it means for public transparency and protecting the state’s public lands. “It’s a thumb on the scale,” said Nathan Johnson, director of public lands at the Ohio Environmental Council. “It slants the playing field dramatically in favor of the industry.”Until now, it’s been basically impossible for any state agency to lease its mineral rights for oil and gas development, said Matt Hammond, president of the Ohio Oil and Gas Association. The law, signed in 2011 under then-Gov. John Kasich, created the Oil and Gas Leasing Commission. The commission was supposed to oversee any leasing activity on state lands.The problem, for the oil and gas industry, is that no one was appointed to the commission until 2017. That only happened after the legislature tried, through the budget bill, to take away the governor’s power to control appointments to the commission. Even after the commission was staffed, the Ohio Department of Natural Resources never promulgated any rules to govern the commission. Under the language put in the House budget bill, the commission would create its own rules, including setting a standard lease to be used by state agencies.State agencies could then lease public land parcels without consulting the commission. Johnson said these changes basically render the commission obsolete and takes the leasing process out of the public eye. “It robs the public of those protections,” he said. “If we’re basically announcing a policy of drill, baby, drill in those places that Ohioans really rely on today more than they ever have, for getting out there, getting away, breathing clean air, I think that’s a sad state of affairs that we’re dealing with in Ohio right now.” According to the bill, the commission would still accept nominations for parcels to be leased and approve bids.The provisions would allow state leasing revenue to be used more broadly. The current law says those funds need to be reinvested into the public lands. The budget bill would have that money be put into a general administrative fund.The new process would also allow oil and gas companies to submit title work to streamline the process, Hammond said. That’s something the state is required to do now, but the industry is better equipped to do, he said. The state Senate is still crafting its own version of the budget bill. Hammond said if this language gets through with the final budget, leasing could happen on state lands immediately.In some areas, drilling can’t happen because of private land’s connection to public lands. When natural gas prices recover, it may make financial sense for producers to lease large swaths of land in state parks or state forests, Hammond said.

Letters to the editor – 05/20/2021 – chagrinvalleytoday.com – – Amendment could threaten parks. This is a message from Protect Geauga Parks. Changes to legislation would promote drilling in Ohio parks.The Ohio House slipped a last-minute provision into the budget bill that aggressively promotes fracking/drilling on state public lands.This legislation would make it state policy to “promote” oil and gas drilling on Ohio’s public lands. Worse yet, it mandates that leasing revenues be used to promote more drilling.Hunters, fisherman, boaters, hikers, campers – anyone using the public lands – will be negatively impacted.Private gas wells and fracking are not what public land is about. There are plenty of private properties to drill on.Fortunately, you can help!Call and email the three senators below. Simply say: “Please remove the proposed language changes to HB 110 regarding oil and gas leasing on public lands.”

• Senator Matt Dolan, Chair, (614) 466-8056 or [email protected]
• Senator Theresa Gavarone, Vice-Chair, (614) 466-8060 or [email protected]
• Vernon Sykes, Ranking Member, (614) 466-7041 or [email protected]

Our public lands are for all to enjoy . . . not for a few to destroy.

Utica Midstream event in Canton recognizes future trends call for less carbon – The focus remains on oil and natural gas, but companies drilling in the Utica Shale recognize the trend toward alternative fuels and energy sources.Hydrogen was mentioned several times during the ninth annual Utica Midstream program Thursday at the Holiday Inn, Belden Village.Liquid hydrogen has been used as a fuel to power batteries, including in public transportation vehicles.The Utica Midstream featured presenters from companies involved in collecting, processing and transporting oil and natural gas. The Canton Regional Chamber of Commerce and Shale Directories have been presenting the meetings, as well as similar events for upstream and downstream operations.Speakers included representatives from major pipeline companies that have seen their business change because of oil and natural gas produced through shale drilling. The oil and gas produced in the Utica Shale and other shale plays around the country is being used as feedstock of plastics as well as for fuels.This year’s conference caught the attention of environmental groups, which announced plans to protest at the event. That effort was canceled because turnout numbers were too low, an organizer said in an email.The groups remain concerned oil and gas drilling threatens the environment and results in public health problems. Ben Hunkler, an organizer with Concerned Ohio River Residents, said economic studies show that “new gas development is a non-starter, and one that would only exacerbate the severe body burden of fossil fuel extraction.”

Utica Shale Academy continues to grow – With 38 students on the list to possibly graduate from the Utica Shale Academy this year, the fledgling school continues to nearly double in size and improvements to the financial balance each year. During Tuesday’s board meeting, Superintendent Bill Watson said the school graduated 20 students a year ago and nine the year before that. There are currently 87 students enrolled and 28 of those have completed everything in preparation to graduate. The other 10 are working toward it. Graduation is in early June, but Watson indicated some students may have to finish in July.Additionally, the board approved a five-year forecast that shows the Shale Academy had a fiscal year end balance of $98,196 in the summer of 2020 and is on pace to have a balance of $235,883 at the end of this June. Over the next four years, Treasurer Bob Barrett estimates an increase each year bringing the end of fiscal year balance in 2025 to $806,948. He said this will hold true if the enrollment remains the same.Board President Karl Blissenbach noted the school is “considerably more solid than we were a year ago.”Although Watson acknowledges it will be difficult to continue doubling indefinitely, he believes by continuing to double enrollment, the school will be doing fine.The school has included several students from other schools trying to catch up on missed credits through the virtual learning academy.

Gulfport Energy Corporation Successfully Emerges From Chapter 11 –Gulfport Energy Corporation today announced that it has successfully completed its restructuring process and emerged from chapter 11 protection. As contemplated by Gulfport’s Plan of Reorganization (the “Plan”) that was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas on April 28, 2021, Gulfport has exited bankruptcy with a new Board of Directors; a strengthened balance sheet, with $853 million of total debt representing more than $1.2 billion of deleveraging through the Chapter 11 process; and approximately $135 million of liquidity. At emergence, Gulfport’s net-debt-to-EBITDA is approximately 1.5x. Please refer to Gulfport’s emergence presentation for more details which will be provided in a Form 8-K and can also be found on the Company’s Investor Relations site: https://ir.gulfportenergy.com. Gulfport Energy is an independent returns-oriented, gas-weighted, exploration and development company and is one of the largest producers of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma.

Chesapeake Looking to Build Lower 48 Natural Gas Supply, Searching for New CEO –Oklahoma City-based Chesapeake Energy Corp. expects to up the natural gas mix in its production portfolio to 85% in 2022 from 77%, executives said Wednesday in the first quarter earnings call. The recently restructured company expects its gas production to hit 715-735 Bcf this year. Capital expenditures are set at $670-740 million, executives said. At one time the largest natural gas producer and biggest leaseholder in the Lower 48, Chesapeake succumbed to bankruptcy last June. In February it completed a restructuring process, erasing an estimated $7.8 billion in debt.The company is now looking for a new CEO to replace Doug Lawler. “We expect it to take several months and we’ve planned for several months,” interim CEO Michael Wichterich told investors. He told analysts “we want change now, we want fresh perspective now.”Chesapeake achieved production of 436,000 boe/d in the first quarter. The company is operating seven rigs across its portfolio, with three rigs in Appalachia, three rigs in the Haynesville Shale and one rig in South Texas.The company generated $409 million of operating cash flow and ended the quarter with $340 million of cash on hand. The company also declared an annual dividend on common shares of $1.375/share. The dividend is to be paid quarterly, with the first payment to be payable on June 10, 2021.Wichterich highlighted cost per lateral foot efficiencies. In Appalachia, “we’re pretty proud to get $700-750 a foot; in 2019 it was $985 a foot. Now during bankruptcy, this says the team continues to execute.” In the Haynesville, “we are seeing really good base production support in all the fields,”

Report: Alaska natural gas production could harm Marcellus LNG exports – Appalachian natural gas producers are looking forward to liquid natural gas exports as a new growth market to serve many power-hungry Asian markets. But a new report says that competition from a far-away shale play in Alaska could make that more difficult. Shale CEOs have talked up the opportunities for Appalachian natural gas for LNG, shipped via pipeline to either the Gulf Coast or a Dominion export terminal in Cove Point, Maryland. Big markets are Mexico as well as Asia and Europe, including South Korea, Japan, Spain and the United Kingdom. But a new report from West Virginia University said that domestic natural gas basins will be impacted by the development of natural gas in the Alaska North Slope and the Arctic National Wildlife Refuge. Pipeline projects could bring natural gas from the Alaska North Slope, even without tapping into ANWR. The report predicts a jump from zero to 1.9 million trillion cubic feet of natural gas production from Alaska’s north Slope, which would be about 6% of the country’s entire natural gas production. Alaska coming online with large amounts of natural gas would impact the domestic market, which at the moment has been struggling with too much supply anyway. Yet Alaska’s natural gas production provides a unique opportunity in LNG. The reason? “Transportation cost is a big factor,” Carr told the Business Times on Friday. For LNG exports to get from the Gulf Coast or Cove Point to Asia, they all have to go a long way via ocean, either taking smaller ships through the Panama Canal or larger ships around the horn of Africa. “It takes more time and the cost of shipping is based on how many days the ship takes,” Carr said. With Alaska, on the other hand, it’s a straight shot from there to Asia. “It’s important for Alaska … (and) important for Appalachia in a negative way,” Carr said. “It’s another competitor and a competitor that is geographically in a better position.” The report said that increased production in Alaska would have a negative impact on prices for other natural gas producers, particularly in the Marcellus and Utica shales, which is the biggest area for natural gas production in the U.S., and also cutting down on LNG exports from Cove Point and the Gulf Coast. The report said that increasing production in Alaska isn’t needed with the United States’ position as an exporter of both oil and gas. “This unnecessary production could harm the nation’s continental producers by causing additional existing production to shut in due to suppressed prices tied to associated gas from petroleum production,” the report said.

TENORM: Stories on Fracking’s Radioactive Waste – PUBLIC HERALD – Public Herald — Below is a complete list of Public Herald’s investigations covering or mentioning fracking’s radioactive waste, a.k.a. TENORM (technically enhanced naturally occurring radioactive material), since the beginning of the publication in 2011. Public Herald’s three documentary films – 1. Triple Divide 2. Triple Divide [Redacted] 3. INVISIBLE HAND – each include reporting on fracking’s TENORM waste.

Pipeline protester arrested after 51/2-hour blockade in Giles County – A protester from West Virginia was arrested Tuesday after blockading a path to a Mountain Valley Pipeline worksite, according to the Virginia State Police. Sydney M. Browning, 28, of Whitesville was found attached to the interior of a disabled 2000 Isuzu Rodeo that was blocking a right of way used by MVP crews, authorities said. The demonstration was reported by pipeline security staff about 5:40 a.m. along Doe Creek Road, about 1.5 miles from U.S. 460 in Giles County. In addition to the SUV, which had flattened tires and was painted with slogans like “Who Killed The World?”, about a dozen activists were nearby, officials said. Appalachians Against Pipelines said the protest was able to halt pipeline work for about five and a half hours. The move was the latest in a series of efforts designed to delay construction and add cost to the controversial, 303-mile natural gas pipeline project. In a statement shared by the protest group, Browning, whom other activists referred to as Max, said: “Often, when people who fight extraction talk about the world ahead, we talk about it in terms of the coming apocalypse caused by catastrophic climate change. There is no doubt that unchallenged extraction and consumption are pushing our ecosystems to the brink. Corporations, MVP included, and the so-called leaders that enable and protect them are the answer to that question painted on this blockade, ‘Who killed the world?'”The state police said a team of specially trained troopers was dispatched to open the SUV. Its doors had been welded shut, and its windows covered by rebar. The state police charged Browning with the misdemeanor offenses of trespassing, obstruction of justice, interfering with the property rights of another and obstructing free passage. Traffic citations were also issued for operating an uninsured vehicle, coasting a vehicle and failing to have a vehicle registered. Appalachians Against Pipelines said Browning remained in custody as of 4 p.m. Tuesday with bail set at $2,500.

LG&E can condemn Bullitt County land for pipeline, judge rules – Louisville Gas & Electric Co. can condemn key parcels of land in Bullitt County for a proposed natural gas pipeline, a judge ruled Tuesday. The order by Bullitt Circuit Judge Rodney Burress found that LG&E met its requirements under Kentucky’s eminent domain law, while dismissing landowners’ claims of fraud and collusion as irrelevant to the condemnation cases. Buress noted that some of LG&E’s representatives “may have been overzealous” in their dealings with property owners, but he found no evidence that the company didn’t negotiate in good faith. And he ultimately agreed that the line is “necessary to improve natural gas service for residential and commercial customers in Bullitt County by increasing capacity and improving reliability.” The decision affects seven of the eight condemnation cases involving the pipeline plan; a separate lawsuit, against Bernheim Arboretum and Research Forest, is pending in Bullitt Circuit Court. Eric Farris, the attorney for Bullitt County Economic Development Authority, called the ruling a “really significant development for Bullitt County as a whole.” Thomas Clay, an attorney representing some landowners, said Wednesday that he and other lawyers are considering their next steps, which could include appealing to the Kentucky Court of Appeals. “Some of the tactics that were used to gain approval from some of the land owners in Bullitt County for this pipeline, I think they deserve scrutiny,” he said. LG&E spokeswoman Natasha Collins said in a statement that the private, publicly-regulated utility continues to pursue the remaining permits and other approvals needed to start construction, including permits from Kentucky Division of Water and the U.S. Army Corps of Engineers. LG&E’s plan to run a 12-mile natural gas pipeline across Bullitt County has run into opposition from some landowners who don’t want a high-pressure line crossing their property. They’ve refused to sell easements for the project, leading to the condemnation lawsuits filed in 2019. Some of the most vigorous opposition has been from Bernheim, which owns land that the pipeline would cross north of the popular forest and recreation area. It is planning a wildlife corridor there. Opponents also have raised concerns about a process that kept key details about the route and opportunities for public input hidden until after state utility regulators approved the project.

Judge: LG&E can take Bullitt County landowners’ property for pipeline –A judge ruled this week that Louisville Gas and Electric Co. can take control of pieces of property that several Bullitt County landowners don’t want to give up so the utility can advance its plans to build a natural gas pipeline. Bullitt Circuit Court Judge Rodney Burress ruled LG&E is legally allowed to secure easements on the property owners’ land so it can install a 12-mile-long pipeline that would start in eastern Bullitt County and end near Interstate 65. “I think it’s incredibly disheartening for us,” Kimberly Brown, one of the landowners involved in the legal dispute, told The Courier Journal Thursday. More: ‘This line terrifies me’: Deadly pipeline explosion stokes Bullitt homeowners’ fears John Cox, a Louisville attorney representing Brown and a couple other landowners, said this battle isn’t over, despite the new ruling. “We have the ability to appeal this,” he said Thursday. “There’s also numerous environmental questions that may be challenged.” LG&E’s plan to take control of these parcels of land revolves around the concept of eminent domain, which refers to the right of a government (or, in certain cases, a utility company) to take private property for a public use. In these types of cases, Cox said, “Most of the time landowners just get run over by the utility. And that’s not going to happen here, so we’ll continue fighting…” Landowners involved in this dispute argued LG&E’s pipeline would serve a private rather than a public use, saying it primarily would supply natural gas to Jim Beam’s distilleries in Clermont and Boston, Ky., per court records. “There is no question that Jim Beam stands to benefit greatly from this pipeline project,” the judge said in his ruling. “Nevertheless, the Court finds this project would undoubtedly serve the broader public in addition to greatly benefiting Jim Beam.”

With $900K tax break, Rensselaer gas-fired power plant will keep operating – Helped by a $900,000 reduction in its property tax bill, the operator of a gas-fired power plant here says it will continue to operate, despite earlier talks of a possible closure.”Empire wants to stay open and be an integral part. We’re going to be needed. As new renewables come on you’re going to need a plant to firm the renewables when there is no sun or wind,” said Dan Hudson, CEO of the Texas-based Empire Generating Co. LLC.Hudson had earlier said they might not be able to stay open without some kind of financial break, given the current low natural gas prices and the declining subsidies they get.The Rensselaer County Industrial Development Agency, or IDA, then agreed to reduce their PILOT, or payment in lieu of tax bill, from $2 million to $1.1 million, which Hudson says has kept the plant operating for now.The reduction has pinched municipal and school budgets but officials say it’s better than losing the plant entirely. Rensselaer school Superintendent John Kardash said the PILOT reduction translates into a $300,000 cut in their property tax revenue.

NESE pipeline developer receives two-year extension; environmentalists are disappointed in the ruling –Transcontinental Gas Pipe Line Company, LLC, (Transco) received a two-year extension of time to construct and place into service the expansion facilities authorized by the Federal Energy Regulatory Commission (FERC) for the Northeast Supply Enhancement project (NESE) as of May 19. The Williams Company operates the Transco pipeline, a 10,000-mile interstate transmission pipeline system that transports much of the natural gas consumed in the northeastern United States. The system includes more than 50 compressor facilities and currently features more than 500 miles of pipe and five compressor facilities in New Jersey, according to information provided by Williams regarding the NESE project. The NESE project is a proposed $1 billion enhancement of existing Transco infrastructure in Pennsylvania, New Jersey and New York that includes a proposed new compressor facility in Franklin Township, known as Station 206. The facility would feature two natural gas-fired turbine compressor units with a combined output of 32,000 horsepower. The preferred location is a 52-acre tract about 1 mile south of the intersection of Route 27 and Route 518; the 16-acre site would be surrounded by a wooded buffer, according to the company. For more than five years, residents have expressed concerns because of the proximity of the proposed compressor station to the Trap Rock Industries rock quarry in Kingston; the potential for clay byproducts to be disturbed during construction; the possibility of leaks, fires and explosions; and quality of life disruptions due to health and environmental concerns. “It is completely shameful that Transco is back, again. FERC has granted them two more years to try to get permits even though both New Jersey and New York denied their permits last year. Now, New Jersey needs to step up and use the 401 Water Quality Certificate to stop this project once and for all,” Taylor McFarland, chapter coordinator of Sierra Club New Jersey, said in a prepared statement. “We’ve beat Transco twice, and we’re going to keep fighting until we beat them again. This project is completely unnecessary. The gas companies get the money, New York gets the gas, and we get the pipe. We must continue to fight to stop this project to protect the public health and safety, and the environment.”

Lawmakers: NC needs more fuel pipelines :: WRAL.com – In the wake of a gas pipeline shutdown last week that prompted panic buying and widespread gas shortages, state lawmakers on Tuesday signaled a renewed push to bring more fuel pipelines into North Carolina.The Colonial Pipeline was offline for five days following a ransomware attack on May 8. Drivers quickly lined up at gas stations across North Carolina to fill up, draining available supplies and raising frustration and anxiety levels for those unable to get to a pump. At one point last week, three of every four gas stations in North Carolina reported being out of fuel.Many stations still had no gas on Tuesday, although the supply situation was steadily improving and the long lines have disappeared.The pipeline provides almost all of the gas used in North Carolina, and energy industry executives told state lawmakers Tuesday that North Carolina similarly has a single supply pipeline for natural gas, making the state vulnerable to outages.”The Colonial Pipeline disruption could have been much worse, and it’s foolish to presume North Carolina will not face a more severe energy supply shock in the future,” Sen. Brent Jackson, R-Sampson, told members of the Senate Agriculture, Energy and Environment committee. “It could happen next week, next year [or] next decade, but it’s a question of when and not if.”While the electric grid has increased its defenses against hackers, the pipeline industry is more vulnerable. If either of North Carolina’s pipelines was to be disabled for a longer period of time, Jackson said, the economic and public safety fallout would be huge.”The bottom line is, we should treat the fallout of the Colonial Pipeline attack as a warning and prepare accordingly,” he said.

Experts: 1 pipeline each for NC natural gas, fuel a concern – North Carolina is particularly susceptible to energy interruptions because gasoline and natural gas supplies originate mainly from two pipeline systems, energy industry experts told a state Senate committee Tuesday. Representatives of utility giants Duke Energy and Dominion Energy were among those who addressed the chamber’s energy panel in light of this month’s ransomware cyberattack upon the Colonial Pipeline. North Carolina motorists were hit particularly hard – 43% of the state’s gas stations remained out of fuel Tuesday afternoon, according to GasBuddy. Up to 75% of each day’s supply of refined petroleum products in North Carolina run through the Colonial Pipeline, said David McGowan, executive director of the North Carolina Petroleum Council. And the Transco pipeline is currently the lone interstate natural gas transmission line for North Carolina. Both lines move products south to north. Natural gas increasingly fuels electric generation. A lack of diverse distribution and redundancy in distribution networks make widespread outages for electricity and natural gas hard to overcome quickly, whether from natural disasters or cyberattacks, said Ed Finley, the former chairman of the North Carolina Utilities Commission. “When it goes out, people’s lives are disrupted,” Finley said, adding that the inability for consumers and businesses to turn on electricity and natural gas “would be crippling to the state’s economy.” Finley said hardening the electrical grid against physical damage and cyber attacks should be considered. Duke Energy, which uses natural gas to generate 30% of its electricity during the coldest weather, has backup fuels at most of these plants, said Nelson Peeler, a company senior vice president. But the diesel fuel immediately available only would last a couple of days, he said. Efforts to diversify natural gas supplies in North Carolina, particularly by moving the fuel from deposits in the north, have stalled in recent years. The Atlantic Coast Pipeline, proposed by Dominion Energy and Duke, was canceled last summer after legal challenges, construction delays and ballooning costs. And a proposed extension of the Mountain Valley Pipeline from Virginia into North Carolina is in jeopardy after the North Carolina Department of Environmental Quality denied a water quality certification. Rusty Harris, a Dominion Energy vice president, said that without expanding natural gas being piped into North Carolina, the utility may have to look to creating more storage facilities to plan for an interruption. Harris and Peeler said separately that alternative forms of energy, such as solar, wind or a greener form of natural gas, can diversify fuel sources. But they cautioned the technology or economics don’t yet make them a reasonable or reliable substitute. “The message from today’s hearing couldn’t be clearer: North Carolina’s reliance on a single pipeline is a critical vulnerability,” .

Liberty Utilities angles for 20-year natural gas contract – Last year, Liberty Utilities withdrew what had turned into a very contentious proposal to construct a large, expensive pipeline called the Granite Bridge Project. Critics said it was too big, too expensive, and that it would harm the environment. It led to protests and drew fierce opposition from climate-change activists who oppose building new fossil fuel infrastructure. In the wake of that failed proposal, Liberty has put forward another project that is now being considered by the Public Utilities Commission – a 20-year agreement to increase its natural gas capacity in the state by about 20 to 25 percent through a purchase agreement with Tennessee Gas Pipeline. The company says it needs to increase its capacity in order to meet customer demand. The new proposal was put forward in January, and it has been proceeding quietly ever since, with none of the dramatic opposition that Granite Bridge garnered. But some environmental advocates still oppose the 20-year contract as an unacceptable option in the face of climate change. “This is a major step in the wrong direction,” said Nick Krakoff, a staff attorney at the Conservation Law Foundation. The foundation is one of the parties involved in the docket at the utilities commission. While burning natural gas emits less carbon dioxide than coal, methane leaks can occur while the gas is moving through the pipelines, harming the environment. Methane leaks can also happen when the gas is being extracted. A 2020 study by the Environmental Defense Fund looked at natural gas produced in the Permian Basin in Texas and found that 3.7 percent of the gas extracted was leaking into the atmosphere. Once methane is released into the environment, it is a much more potent greenhouse gas than carbon dioxide. From Krakoff’s standpoint, 20 years is a long time; he is pushing for a shorter contract. Along with climate change activists, he has argued that the issue is urgent.

U.S. natgas soars to 3-month high on rising air conditioner use (Reuters) – U.S. natural gas futures jumped 5% to a three-month high on Monday on forecasts for warmer weather over the next two weeks that is expected to prompt power generators to burn more gas to meet rising air conditioning use. Traders noted that was the biggest daily percentage gain since the Texas freeze in mid February. They noted the price gain came despite a slow but steady increase in production and small declines in exports this month even though gas prices in Europe and Asia were soaring. Front-month gas futures NGc1 rose 14.8 cents, or 5.0%, to settle at $3.109 per million British thermal units (mmBtu), their highest close since Feb. 17. Speculators, meanwhile, boosted their net long gas futures and options positions on the New York Mercantile and Intercontinental Exchanges for a second week in a row last week to their highest since early March. They were acting on expectations U.S. prices would rise as exports return to record highs with gas prices in Europe TRNLTTFMc1 near their highest since 2018 and Asia JKMc1 over $10 per mmBtu.

June Natural Gas Futures Fizzle After Biggest Advance as Prompt Month; Cash Prices Fall — Natural gas futures on Tuesday gave back a big chunk of the gains made in a weather-driven surge a day earlier. Analysts said forecasts remained bullish for gas demand, but the Monday rally was overcooked and traders responded by taking profits the next day. The June Nymex contract dropped 9.7 cents day/day and settled at $3.012/MMBtu. A day earlier, the prompt month surged nearly 15 cents. July fell 8.6 to $3.078 on Tuesday. NGI’s Spot Gas National Avg. declined 2.5 cents to $2.810. The most intense heat currently in the 15-day forecast lies early next week, and analysts look for sustained cooling demand to arrive by June. But near-term conditions remained mild Tuesday, and analysts said markets may need confirmation of summer demand to arrive before futures rally further. “Underlying bullish sentiment is strong,” EBW Analytics Groups said Tuesday. While prices were bound to fall back near the $3.00 level this week, “additional gains are likely as soon as sustained hot weather arrives.” Temperatures were generally comfortable across the Midwest and into the East on Tuesday. But “demand will increase late this weekend into the middle of next week as strong upper high pressure builds over the eastern U.S.,” NatGasWeather said. The firm also noted that liquefied natural gas (LNG) volumes pulled back to near 10 Bcf early Tuesday after eclipsing the 11 Bcf level to start the previous day – likely due to ongoing maintenance work at multiple Gulf Coast exports facilities. Planned maintenance is common in May, however, and analysts are increasingly confident in robust LNG demand through the summer cooling season, suggesting any further declines this month will likely prove to be blips. European stockpiles are low after a combined harsh winter and chilly spring across much of the continent, driving the need for U.S. exports. Demand from Asia for American deliveries of the super-chilled fuel is also steadily strong. LNG feed gas volumes have topped the 11 Bcf level repeatedly this spring – hanging near all-time highs.

U.S. natgas slips on mild weather forecast, export declines (Reuters) – U.S. natural gas futures slipped on Wednesday as exports dipped and on forecasts for milder weather and lower demand over the next two weeks than previously expected. Traders noted gas prices were also following oil futures lower. U.S. crude fell more than $2 a barrel on renewed global demand concerns as coronavirus cases in Asia rise, among other things. O/R Front-month gas futures NGc1 fell 4.8 cents, or 1.6%, to settle at $2.964 per million British thermal units. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 90.8 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April. That is still well below November 2019’s monthly record of 95.4 bcfd. With the coming of summer air-conditioning use, Refinitiv projected average gas demand, including exports, would rise from 81.1 bcfd this week to 84.2 bcfd next week. The forecast for next week, however, was lower than Refinitiv projected on Tuesday because the latest outlook was for milder weather that should reduce the amount of gas power generators burn to keep air conditioners humming. The amount of gas flowing to U.S. LNG export plants averaged 10.9 bcfd so far in May, down from April’s monthly record of 11.5 bcfd. The decline was due to short-term issues and normal spring maintenance at a few Gulf Coast plants and the gas pipelines that supply them.

US gas storage injection falls below average as tight market balance persists | S&P Global Platts – US natural gas storage fields added 71 Bcf last week, marking the fourth straight below-average injection this season that comes as tighter supply-demand fundamentals in the US market endure. Inventories edged up to 2.1 Tcf for the week ended May 14, the US Energy Information Administration reported May 20. The addition to US stocks was less than the 84 Bcf injection reported during the corresponding week in 2020 and below the five-year average build of 86 Bcf, according to EIA data. As a result, stocks were 391 Bcf, or nearly 16%, below the year-ago level of 2.491 Tcf and 87 Bcf, or 4%, less than the five-year average storage level of 2.187 Tcf. While still bullish, the mid-May inventory build outpaced levels anticipated by an S&P Global Platts survey of analysts, which predicted a 67 Bcf injection earlier this week. Following the release of the EIA’s storage report, the NYMEX Henry Hub prompt-month futures contract fell about 5 cents from its previous settlement price as the market absorbed news of the slightly larger-than-anticipated build. By early afternoon, the June contract retraced some of its mid-morning losses to finish trading at $2.93/MMBtu – down about 4 cents on the day, S&P Global Platts data showed. In the second week of May, the US market balance tightened compared with the prior week, as abnormally low US temperatures boosted late-season heating demand across much of the Lower-48 states. During the week, total US demand averaged nearly 80 Bcf/d – up over 800 MMcf/d, or about 10%, compared with the week prior. The weekly gain was propelled mostly by lower temperatures in the Midwest and the Northeast, where residential-commercial demand was up sharply. In the Midwest, population-weighted temperatures averaged just 50.1 degrees Fahrenheit, or about 9 degrees below normal, during the week ended May 14. As a result, gas-fired heating demand climbed nearly 1.2 Bcf/d compared with the week prior. In the Northeast, a smaller but still significant drop in temperatures lifted heating demand there some 600 MMcf/d. Along with smaller gains in other regions, the total US residential-commercial figure climbed more than 2.3 Bcf/d during the week, Platts Analytics data shows. Stronger demand in the week ended May 14 was only partially offset by a 300 MMcf/d increase in domestic production which climbed to an average 90.5 Bcf/d. Imported pipeline supply from Canada was also up last week by about 240 MMcf/d but was mostly offset by a 180 MMcf/d increase in exports to Mexico. Compared with pre-pandemic production levels at over 95 Bcf/d, upstream supply remains depressed and will likely keep the US domestic market balance significantly tighter this injection season.

U.S. natgas futures ease to fresh 3-week low as output slowly rises (Reuters) – U.S. natural gas futures eased to a fresh three-week low on Friday as production continued to edge higher and exports slip. The price decline came despite forecasts that warmer weather in coming weeks will boost the amount of gas power generators burn to keep air conditioners humming. Front-month gas futures NGc1 fell 1.9 cents, or 0.6%, to settle at $2.906 per million British thermal units, their lowest close since April 27. That also put the front-month down for a fourth day in a row for the first time since early March and down almost 2% for the week after gaining more than 16% during the prior five weeks. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 90.9 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April. That is still well below November 2019’s monthly record of 95.4 bcfd. With the summer air conditioning season approaching, Refinitiv projected average gas demand, including exports, would rise from 81.3 bcfd this week to 84.8 bcfd next week and 86.1 bcfd in two weeks. That was similar to Refinitiv’s forecasts on Thursday. The amount of gas flowing to U.S. LNG export plants averaged 10.9 bcfd so far in May, down from April’s monthly record of 11.5 bcfd. The decline was due to short-term issues and normal spring maintenance at a few Gulf Coast plants and the gas pipelines that supply them. U.S. pipeline exports to Mexico, meanwhile, averaged 6.0 bcfd so far in May, just off April’s monthly record of 6.1 bcfd, Refinitiv data showed.

Weekly Natural Gas Cash Gains Defy Weather, but Futures Languish Absent Summer Heat – The continuation of moderate weather ahead of what is expected to be a record-breaking summer did little to stop spot gas price gains during the week of May 17-21. NGI’s Weekly Spot Gas National Avg. climbed 5.5 cents to $2.745. June Nymex futures, meanwhile, blew past $3.00 early in the period as weather models teased at intense heat arriving in the coming days. However, a quick retreat in the amount of projected demand sapped momentum, while the latest storage data sealed its fate. The June contract closed the week at $2.906, off 20.3 cents from Monday’s close.The gains in the spot gas market occurred even as widespread heat failed to materialize across the United States. Even in Texas, where conditions are typically hot and humid by this time of year, heavy rains throughout the week kept daytime temperatures in the 70s and 80s.East Coast markets posted the largest increases week/week as pipeline maintenance events upstream in Appalachia restricted gas flows.Algonquin Citygate spot gas prices averaged $2.570 for the May 17-21 period, up 28.0 cents on the week. Transco Zone 6 NY was up 20.0 cents to $2.505.In the Southeast, Transco Zone 5 spot gas prices averaged $2.945 for the week, an increase of 6.0 cents week/week.Henry Hub added only a penny on the week to average $2.890, while OGT in the Midcontinent slipped 4.0 cents to $2.660.A handful of Texas markets also landed in the red this week, with Agua Dulce and Houston Ship Channel each sliding 6.5 cents to $2.875 and $2.880, respectively.

Natural Gas, America’s No. 1 Power Source, Already Has a New Challenger: Batteries – WSJ — Vistra Corp. owns 36 natural-gas power plants, one of America’s largest fleets. It doesn’t plan to buy or build any more.Instead, Vistra intends to invest more than $1 billion in solar farms and battery storage units in Texas and California as it tries to transform its business to survive in an electricity industry being reshaped by new technology.”I’m hellbent on not becoming the next Blockbuster Video, ” said Vistra Chief Executive Curt Morgan. “I’m not going to sit back and watch this legacy business dwindle and not participate.”A decade ago, natural gas displaced coal as America’s top electric-power source, as fracking unlocked cheap quantities of the fuel. Now, in quick succession, natural gas finds itself threatened with the same kind of disruption, only this time from cost-effective batteries charged with wind and solar energy.Natural-gas-fired electricity represented 38% of U.S. generation in 2019, according to the U.S. Energy Information Administration, or EIA, and it supplies round-the-clock electricity as well as bursts during peak demand. Wind and solar generators have gained substantial market share, and as battery costs fall, batteries paired with that green power are beginning to step into those roles by storing inexpensive green energy and discharging it after the sun falls or the wind dies.Battery storage remains less than 1% of America’s electricity market and so far draws power principally from solar generators, whose output is fairly predictable and easier to augment with storage. But the combination of batteries and renewable energy is threatening to upend billions of dollars in natural-gas investments, raising concerns about whether power plants built in the past 10 years – financed with the expectation that they would run for decades – will become “stranded assets,” facilities that retire before they pay for themselves. Across the country, much of the growth in renewable energy to date has been driven by state mandates that have required utilities to procure certain amounts of green power, and by federal tax incentives that have made wind and solar more economically competitive.But renewables have become increasingly cost-competitive without subsidies in recent years, spurring more companies to voluntarily cut carbon emissions by investing in wind and solar power at the expense of that generated from fossil fuels. And the specter of more state and federal regulations to address climate change is accelerating the trend

It’s Time to Kick Gas – McKibben –We’re used to the idea that CO2 – one carbon atom, two oxygen atoms – is a dangerous molecule. Indeed, driving down carbon-dioxide emissions has become the way that many leaders and journalists describe our task. But CH4 – one carbon atom combined with four hydrogen atoms, otherwise known as methane – is carbon dioxide’s evil twin. It traps heat roughly eighty times more efficiently than carbon dioxide does, which explains why the fact that it’s spiking in the atmosphere scares scientists so much. Despite the pandemic lockdown, 2020 saw the largest single increase in methane in the atmosphere since we started taking measurements, in the nineteen-eighties. It’s a jump that, last month, a scientist at the National Oceanic and Atmospheric Administration called “fairly surprising and disturbing.” If there’s any good news, it’s that the spike in methane doesn’t – yet – seem to be coming in large percentages from the runaway melt of methane-ice formations beneath the polar oceans or those in tundra soils. That would be a nightmare scenario because there wouldn’t be anything we could do about it – it’s global heating on automatic. Two decades ago, people thought that natural gas, though a fossil fuel, might help slow climate change because, when you burn it in a power station, it produces less carbon than burning coal does. Now we understand that natural gas – which is primarily made of methane – leaks unburned at every stage from fracking to combustion, whether in a power plant or on top of your stove, in sufficient quantities to make it an enormous climate danger. But plugging leaks isn’t enough: we’ve got to stop producing natural gas as quickly as possible, and replace it with renewables that generate neither carbon nor methane. As I wrote last month, that’s now entirely possible; sun and wind power have become so cheap so fast that they’re more economical than gas, and batteries are coming down the same kind of cost curve, so nightfall is no longer the problem it once was. But there are other reasons to kick gas. A report from Australia’s Climate Council, released last week, finds that the health impact of having a gas cooktop in your home is roughly equivalent to having a cigarette smoker puffing away in the corner, and accounts for about twelve per cent of childhood asthma. “It’s odourless, it’s invisible, it’s a bit of silent enemy,” the C.E.O. of Asthma Australia said. “People might feel differently if they understood that their gas appliances were emitting a range of toxic substances.” That is why the gas industry has lobbied so hard to prevent that perception. In at least fourteen U.S. states, the industry lobby is pushing bills that would prevent local governments from restricting the use of gas; a particular threat comes from the new appliances – chiefly air-source heat pumps and water heaters, and induction cooktops – that are now widely available and increasingly cheap. Indeed, leaked documents obtained last week by E&E News show that fifteen big gas utilities have mounted a Consortium to Combat Electrification. “If you’re going to bend this curve, and we bend it quickly, there are going to be casualties. Some will transform, some will consolidate, some will go away.”

Ted Cruz cites pipeline attack to push natural gas bill –Texas Republican Sen. Ted Cruz cited recent fuel shortages following the Colonial pipeline hack to justify immediate passage of legislation to codify Trump-era regulations on liquefied natural gas shipments by rail.

‘Colonial Pipeline resumes normal operations after ransomware hack – Colonial Pipeline resumed normal operations on Saturday after a ransomware attack forced the pipeline to shut down last week, the company announced. The pipeline is now delivering fuel to states that had experienced gas shortages at the same capacities as before the extortion scheme hit the critical pipeline, which runs from Texas to New York and carries roughly 100 million gallons of fuel per day. Colonial Pipeline restored limited services on Wednesday but said it would take several days for the product delivery supply chain to return to normal. “Our team members across the pipeline worked safely and tirelessly around the clock to get our lines up and running, and we are grateful for their dedicated service and professionalism during these extraordinary times,” the company said.”Colonial has and will continue to put safety and system integrity first and will invest the required resources to maintain safe and reliable operations of our pipeline.” According to crowdsourced data collected by GasBuddy, gas stations in 13 states and the District of Columbia were still experiencing fuel shortages as of 9:12 A.M. ET on SaturdayPatrick De Haan, a senior petroleum analyst at Gasbuddy, said in a tweet Thursday that it could take between two and 14 days for fuel services to be fully restored depending on the state. The hacker group DarkSide, which was responsible for the ransomware attack that shut down the pipeline, claims to be shutting down after it lost access to the infrastructure needed to carry out its extortion operations. Security experts warn that cyber criminal groups often disband and return under different names, and it therefore can’t be determined if the disruption to DarkSide’s infrastructure is legitimate or permanent.

Colonial Pipeline confirms it paid $4.4M to hackers (AP) – The operator of the nation’s largest fuel pipeline confirmed it paid $4.4 million to a gang of hackers who broke into its computer systems. Colonial Pipeline said Wednesday that after it learned of the May 7 ransomware attack, the company took its pipeline system offline and needed to do everything in its power to restart it quickly and safely, and made the decision then to pay the ransom. “This decision was not made lightly,” but it was one that had to be made, a company spokesman said. “Tens of millions of Americans rely on Colonial – hospitals, emergency medical services, law enforcement agencies, fire departments, airports, truck drivers and the traveling public.” Colonial Pipeline’s CEO, Joseph Blount, told The Wall Street Journal he authorized the payment because the company didn’t know the extent of the damage and wasn’t sure how long it would take to bring the pipeline’s systems back. The FBI discourages making ransom payments to ransomware attackers, because paying encourages criminal networks around the globe who have hit thousands of businesses and health care systems in the U.S. in the past year alone. But many victims of ransomware attacks, where hackers demand large sums of money to decrypt stolen data or to prevent it from being leaked online, opt to pay. “I know that’s a highly controversial decision,” Blount told the Journal. “But it was the right thing to do for the country.” Blount said Colonial paid the ransom in consultation with experts who previously dealt with the group behind the attacks, DarkSide, which rents out its ransomware to partners to carry out the actual attacks. Multiple sources had confirmed to The Associated Press that Colonial Pipeline had paid the criminals who committed the cyberattack a ransom of nearly $5 million in cryptocurrency for the software decryption key required to unscramble their data network.

PIPELINE HACK: Panels set votes, hearings on cybersecurity concerns — Monday, May 17, 2021 — The House Homeland Security Committee will vote on legislation this week meant to protect pipelines from cyberattacks.

SECURITY: Cantwell preps hearing on pipeline cyberattack — Tuesday, May 18, 2021 — Senate Commerce, Science and Transportation Chairwoman Maria Cantwell is planning a hearing on the Colonial pipeline hack, while also pressing the Department of Homeland Security on its track record overseeing pipeline security.

Colonial Pipeline shipment scheduling hit by network issues Colonial Pipeline’s is having network issues preventing shippers from planning upcoming shipments of fuel, the company said, just after the system reopened after a week-long ransomware attack. Last week’s closure of the 5,500-mile (8,900-km) system was the most disruptive cyberattack on record, preventing millions of barrels of gasoline, diesel and jet fuel from flowing to the East Coast from the Gulf Coast. Colonial has been using its shipper nomination system to schedule batches of fuel deliveries to bring flows back to normal. A prolonged outage could prevent shippers from scheduling deliveries – once again hampering fuel delivery across the U.S. southeast and east coasts. Despite the nomination issues, market sources familiar with the matter said barrels currently in the line are continuing to flow.

Colonial Pipeline’s customer communications system back online after experiencing problems – – Colonial Pipeline’s communications system for shippers came back online late May 18 after experiencing problems for most of the day, again disrupting operations even though the petroleum products artery is up and running again after being halted for nearly a week following a cyberattack. Refined products shippers were unable to make nomination changes on Colonial for most of the day, despite the line resuming normal operations May 13, sources said. Colonial halted all pipeline operations May 7 because of a ransomware attack, restricting the primary artery for gasoline and refined products from delivering more than 100 million gal/d of fuels. Colonial stretches more than 5,500 miles from the Houston refining hub to New York Harbor, supplying about 45% of all the gasoline and diesel fuel consumed on the East Coast. A combination of regional shortages and panic-buying caused 50% or more of gas stations in North Carolina, South Carolina, Georgia, Virginia, Florida, and Washington to run out of fuel, and some regional shortages were continuing May 18. “Colonial has restored service to our nominations system, and customers can once again place nominations,” Colonial said in a statement after 1900 GMT. “Our internal server that runs our nomination system experienced intermittent disruptions this morning due to some of the hardening efforts that are ongoing and part of our restoration process. These issues were not related to the ransomware or any type of reinfection,” Colonial said earlier. “The Colonial Pipeline system continues to deliver refined products as nominated by our shippers.”

Rep. Slotkin Warns of Vulnerability to Cyberattacks After Colonial Pipeline Hack –National security experts say the recent hack affecting a major U.S. pipeline is just one in a wave of recent cyberattacks. Earlier this month, a cyberattack on the Colonial Pipeline shut down a major gas line that carries fuel to millions from Texas to New York. This shutdown sparked panic buying and price gouging along the East Coast. While picturing the devastation of a terror attack or mass shooting is easy, visualizing a cyberattack is more difficult. But that does not make virtual attacks any less serious a threat to national security. Rep. Elissa Slotkin is a Democrat representing Michigan’s Eighth Congressional District. She is the chairwoman of the Intelligence and Counterterrorism subcommittee within the House Committee on Homeland Security. Slotkin says whether it is ransomware or an attack for disruption, the U.S. needs to ensure that its infrastructure is protected from these cyberattacks. Slotkin says the recent pipeline cyberattack has proven to the average American that the U.S. is exceptionally open to cyberattacks. “The way we control our infrastructure has modernized and it’s more online. It’s more network, and in general we think that’s a good thing. Except it just exposes all these vulnerabilities.” According to Slotkin, most members of Congress think about cybersecurity policies from two perspectives, the first being defense. “What would happen if, in Lansing, we had a major cyberattack on the state? What would happen if in the middle of winter, there was an attack on Michigan’s electrical grid and 26 elderly people froze to death in their home?” Slotkin says these scenarios are what the U.S. needs to prepare for. Slotkin says the second way of thinking about cybersecurity is through offense, which is more “sticky and complicated” because the U.S. has no doctrine for cyber war. “What the public I think sees, people can hack us, people can attack us in the cyber realm and there’s no response. And what I will tell you is yes, there is some response, it’s just we’re not there as a nation, as a government, on how to respond to these attacks effectively,” she says.

Granholm expresses openness to pipeline cyber standards after Colonial attack –Energy Secretary Jennifer Granholm on Wednesday threw her tentative support behind the idea of mandatory standards to secure pipelines in the wake of the debilitating ransomware attack on Colonial Pipeline earlier this month. When asked by House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) during a hearing whether pipelines should be subject to similar strict mandatory security standards that the electric sector is, Granholm testified that the U.S. is currently “inadequate” on pipeline security. “I think that this is an example potentially of that,” Granholm said of the attack on Colonial Pipeline. “If we had had standards in place, would this particular ransomware attack have been able to happen? You know, I’m not 100 percent sure.” “I do know that having good cyber hygiene on the private side as well as on the public side is a critical basic defense, and for entities that provide services to the public like that, especially critical services like energy, I think it’s an important consideration for this committee for sure,” she added. She also pointed to the fact that the Federal Energy Regulatory Commission (FERC) has established cybersecurity standards for the electric grid and suggested that the federal government could do the same for pipelines, boosting current Transportation Security Administration (TSA) authorities. “FERC issued mandatory cybersecurity standards for electricity for electricity owners and operators … TSA has voluntary guidelines, and one wonders whether it’s time we match what we’re doing on the electric side with what we’re doing on the pipeline side,” she said. Granholm’s remarks appear to differ from those made by President Biden last week on cybersecurity standards, in which he rejected the idea of mandated cybersecurity standards. “The bottom line is that I cannot dictate that the private companies do certain things relative to cybersecurity,” he said at the time. The hearing came a week after Colonial Pipeline began to restart operations following a devastating ransomware attack earlier this month on its IT system, with the company temporarily shutting down the pipeline to protect operational controls. Colonial Pipeline CEO Joseph Blount confirmed to The Wall Street Journal on Wednesday that the company paid the hackers, who President Biden said last week were likely based in Russia, the equivalent of $4.4 million to regain access to encrypted systems and get the pipeline up and running again.

19 GOP AGs urge Biden to reinstate Keystone, protect energy infrastructure in wake of Colonial Pipeline attack – Nineteen Republican attorneys general sent a letter to President Biden calling on his administration to support energy infrastructure, including reinstating the Keystone XL Pipeline permit, in light of the cyberattack that shut down the Colonial Pipeline. On Tuesday, Montana Attorney General Austin Knudsen sent a letter with 18 of his GOP colleagues from around the country to Biden, saying the “aftermath” of the cyberattack that took the Colonial Pipeline offline “has been alarming.” The attorneys general likened the price increases, “fuel shortages and gas lines” Americans are currently experiencing to “those seen in the Carter administration” and said the situation shines light on the “widespread disruption and public panic” when a fuel pipeline goes down. “Americans depend upon safe and secure energy supplies, which is why we must build and maintain robust energy infrastructure that is resilient in the face of accidents and sabotage,” wrote the attorneys general. “A temporary shutdown of one pipeline’s full-capacity operations shouldn’t bring half the country to the brink.” The group said the “safe and clean energy sources” America needs includes the Keystone XL Pipeline – which Biden canceled via executive order – and pointed out that Biden supported pipelines when he served as former President Obama’s vice president. “But your administration’s current approach exchanges those fact-based conclusions for the faddish preoccupations of your coastal elite constituencies,” the group stated in the letter. “Indeed, hours after you took office, you purported to kill thousands of jobs, extinguish billions in economic opportunity, and jeopardize American energy independence because of the ‘message’ Keystone XL sends to the global community – whatever that means,” they added. The attorneys general lambasted Biden for his “impulse to bow to an extreme climate agenda untethered to scientific fact or reality.” Additionally, they said the decision to cut the pipeline “undercuts” American energy independence while damaging relations with “geopolitical allies like Canada,” who would benefit from the pipeline.

PolitiFact | No, the East Coast gas shortage isn’t related to the Keystone Pipeline or Biden’s order – A fuel shortage hit the East Coast on May 7 after the Colonial Pipeline was shut down following a cyberattack, but some people on social media blamed the fuel woes on President Joe Biden’s order halting construction of the Keystone XL pipeline project in the Great Plains.”When you can’t find gas, remember who executively ordered the Keystone Pipeline to close,” a Facebook post read on May 10.Similar claims linking the Colonial and Keystone pipeline issues have been made elsewhere on Facebook and by politicians on Twitter, including House Minority Leader Kevin McCarthy, R-Calif, and Sen. Marsha Blackburn, R-Tenn.The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about ourpartnership with Facebook.)The post gets a few things wrong. First, Biden’s order didn’t close the Keystone Pipeline; it’s still operating. Second, Keystone doesn’t supply gasoline; it carries Canadian crude oil to U.S. refineries. Third, the gasoline shortages are due to a problem with the operator of the Colonial Pipeline, not a lack of crude oil – or anything connected with Keystone or Keystone XL.The Colonial Pipeline, which runs for 5,500 miles from Houston to New Jersey, supplies the East Coast with 45% of its gasoline. When a ransomware attack targeted the computer network of the Georgia-based company that operates the pipeline, the company decided to halt all operations in order to contain the attack. The temporary shutdown of the pipeline resulted in fuel shortages and price hikes throughout the East Coast.Keystone XL would have been an extension to the still operationalKeystone Pipeline, which stretches for 2,687 miles from Hardisty, Alberta, in Canada to Illinois and Texas. The extension would have created another to carry crude oil from Alberta to U.S. refineries and terminals and expanded the network’s capacity. Construction on the Keystone XL project began on April 7, 2020, and less than 100 miles of the 1,179-mile extension was completed by the time President Biden issued an executive order revoking the construction permit on Jan. 20, 2021.

Michigan Governor Gretchen Whitmer Pushes Enbridge Pipeline Shutdown as US Faces National Gas Shortage – Amid the national gas shortage the U.S. is facing, Michigan Governor Gretchen Whitmer continues her pursuit to shut down the Enbridge pipeline. In a Washington Post op-ed on Friday, the Democrat Governor explained that the Line 5 pipeline, which was owned and operated by Enbridge Inc., has pumped crude oil for 70 years through the cross-section of Lake Michigan and Huron and the Straits of Mackinac. The Michigan Governor also mentioned that the two 4.5 mile sections are ticking time bombs in the area.According to Fox News, Michigan Governor Gretchen Whitmer stated that oil and water do not mix, especially when the latter involves the Great Lakes. She mentioned that it is the repository of more than 20 percent of the fresh water in the world.Whitmer also added that she is taking every action that she can have to shut them down to protect the two Great Lakes. She also shared that she wants to protect jobs that depend on them.Line 5 is part of a network that moves crude oil and other petroleum products from Western Canada. It transports around 540,000 barrels daily.Also, Whitmer mentioned that the incident in 2010 alerted the whole nation because of the dangers imposed by a possible oil spill after Line 6B of the Enbridge pipeline ruptured is what she is attempting to avoid.However, the recent Colonial Pipeline hack, which shut down the entire 5,500-mile stretch and caused the scramble at the gas pump, drove prices to record highs and caused major shortages. Reports even mentioned that a gas station raised its regular gas prices to $7 per gallon.In November, Whitmer filed a lawsuit against Enbridge that notifies the state of Michigan that it would allow the pipeline 180 days to cap oil flow operations. The governor threatened to disgorge the company of all profits unjustly earned upon refusal to comply. But Enbridge replied that they will continue pumping until a court orders them to stop. Whitmer also concluded that running pipelines through the water of the Great Lakes is and always has been a dangerous threat. She also emphasized that she will not sit idle as the time bomb keeps ticking.

Michigan Line 5 opponents serve ‘eviction notice’ at Enbridge pumping station – On the day after a state deadline for Enbridge to shut down its Line 5 pipeline in Michigan’s Straits of Mackinac, hundreds of tribal and environmental activists served an “eviction notice” to the Canadian energy company at its McGulpin Point pumping station.Sean McBrearty, campaign coordinator for the nonprofit Oil and Water Don’t Mix, read the symbolic order before posting it on the pumping station gates on Thursday. The demonstration followed a two-mile march on the second day of protests around Enbridge’s May 12 deadline to cease sending oil through its 68-year-old Line 5 pipeline on the bottom of the Straits of Mackinac. “Enbridge has a history of not only neglecting the environment but neglecting their duty under the law,” McBrearty told Energy News Network. “They’re doing that again today by operating without an easement.”After serving the eviction notice at the pumping station, protesters continued down the road as tribal members performed traditional songs and dances. The procession stopped at the edge of the waterway linking Lake Michigan to Lake Huron – a place of cultural and spiritual significance to the Ojibwe, Odawa, Potawatomi, and other tribal nations in the Great Lakes States.”This is a sacred place. It’s our Jerusalem,” said Nathan Wright, a member of the Sault Ste. Marie Tribe of Chippewa Indians and a main organizer of the demonstrations. “We as Anishinaabe have a responsibility to protect this place. We’re here to let Enbridge know their time is up.” Enbridge continues to run Line 5 as it challenges Gov. Gretchen Whitmer’s shutdown order in court, arguing that pipeline decommissioning decisions must be made at the federal level and that the governor does not have that authority. Some Republican lawmakers also oppose the shutdown, citing the pipeline’s economic impact. The governor, meanwhile, has threatened to start seizing the company’s profits if it continues to operate the pipeline, which moves up to 23 million gallons of crude oil and natural gas liquids each day from Superior, Wisconsin, to Sarnia, Ontario.

Ohio lawmakers make plea to keep Line 5 open, citing potential Toledo-area job losses — Four Ohio lawmakers – including a Republican and two Democrats from northwest Ohio – pleaded with Michigan Gov. Gretchen Whitmer on Tuesday to back down from her effort to close the controversial Line 5 pipeline that runs along the Straits of Mackinac. So far, Governor Whitmer has given no indication she is willing to do that. Ohio Sen. Theresa Gavarone (R., Bowling Green) opened a news conference in Columbus by saying the attempted closure “at best, is a mistake by Michigan Gov. Gretchen Whitmer and, at worse, is an attack on Ohio workers.” Their thoughts echo words reiterated in Toledo earlier this month by Lt. Gov. Jon Husted and other high-ranking Ohio officials over the past couple of years before that, including Gov. Mike DeWine, Attorney General Dave Yost, Toledo Mayor Wade Kapszukiewicz, and Oregon Mayor Mike Sefarian. The bipartisan consensus is that Toledo-area refineries operated by BP-Husky Toledo and PBF Energy Toledo Refining Co. have the potential of losing 1.200 jobs if Ms. Whitmer succeeds. The pipeline also serves northwest Ohio and southeast Michigan. Enbridge has thus far refused to comply with Ms. Whitmer’s May 12 shutdown deadline, which the governor announced last November. Her office gave no response to The Blade about the latest plea or about two symbolic resolutions in the Ohio General Assembly calling for that pipeline to remain open. Neither House Resolution 13 nor Senate Resolution 41 have any authority in the matter. Both were passed to express the Ohio lawmakers’ opinion about the Line 5 controversy. Neither require Gov. Mike DeWine’s signature, and they don’t require the same language. The Ohio House resolution was passed in March by a 73-10 vote. The Ohio Senate has not taken a vote on the resolution introduced into that chamber.

Gretchen Whitmer’s Pipeline War — Wall Street Journal editorial – The cyber attack on the Colonial Pipeline has led to surging gasoline prices on the East Coast. But that isn’t stopping Michigan Gov. Gretchen Whitmer from trying to shut down another crucial pipeline, no matter the harm across the Midwest and Canada. Enbridge Energy‘s Line 5 transports more than half a million barrels a day of oil and natural gas liquids through Canada and the Great Lakes region. Late last year Ms. Whitmer moved to revoke and terminate an easement that lets the pipeline operate for 4.5 miles across the Straits of Mackinac. She’s seeking a state court injunction to force Enbridge to shut down Line 5 and “permanently decommission” the pipeline. Ms. Whitmer claims Enbridge has created an “unacceptable risk of a catastrophic oil spill in the Great Lakes that could devastate our economy and way of life.” But the Pipeline and Hazardous Materials Safety Administration, the federal regulator that oversees Line 5, said in January that it is “presently aware of no unsafe or hazardous conditions that would warrant shutdown of Line 5.” No mode of moving energy is risk-free, but pipelines are much safer than rail. Enbridge says that over two decades Line 5 has seen five incidents that resulted in the release of 882 gallons of product. Compare that to the 2013 Lac-Megantic disaster, where a train carrying oil derailed, spilling some 1.6 million gallons and causing an explosion that killed some 47 people. Refineries in Michigan, Ohio and Pennsylvania would lose much of their crude oil supply. United Steelworkers Local 912 President Justin Donley has warned that closing Line 5 would jeopardize the Toledo Refining Company, which isn’t equipped to receive oil by truck. The result would be a “devastating loss of income” for nearly 350 union workers and “further economic collapse of the Northern Ohio/Southern Michigan economy,” he said.Ms. Whitmer is also causing a foreign policy flap. A 1977 treaty between the U.S. and Canada bars a “public authority in the territory of either” signatory nation from taking actions that would have the effect of “impeding, diverting, redirecting or interfering with in any way the transmission of hydrocarbon in transit” by pipeline between the two countries. The treaty makes exceptions for emergencies or natural disasters and temporary shutdowns for safety concerns, but not for gubernatorial whim.The Canadian government raised these treaty concerns this month in an amicus brief filed in U.S. federal court. Refineries in Ontario depend on the pipeline, and so does the Toronto Pearson International Airport for jet fuel. “A Line 5 shutdown would severely disrupt the supply and increase the price consumers pay for fuel across Quebec and Ontario,” the Canadians argued, adding that “in western Canada, the loss of Line 5 would have a devastating impact on the industry and economy.”

Offshore Worker Dies in Gulf of Mexico – Fieldwood Energy has confirmed that a fatal incident occurred on May 15 involving a contractor at the Eugene Island 158 #14 offshore facility in the Gulf of Mexico (GOM). The incident was said to have happened during a non emergency casing pressure test on a shut in well. No other personnel were injured and the shut in well remains secure and poses no threat of environmental harm, the company noted. Fieldwood Energy said details of the incident are still being established and revealed that an investigation into the incident is currently underway. “Fieldwood Energy is committed to safe operations, and the health and well-being of our entire workforce is a top priority,” the company said in a statement posted on its website, adding that it was “deeply saddened” by the event. “We have notified and are working with the appropriate regulatory agencies. We have no additional details to share at this time,” Fieldwood Energy went on to note in the statement. Fieldwood Energy is one of the largest operators in the GOM, according to its website. The company produces more than 130,000 barrels of oil equivalent per day from assets in the shallow continental shelf and deepwater U.S GOM and Gulf Coast region and has expanded to develop new assets in the territorial waters of Mexico, Fieldwood Energy notes on its site.

NTSB Releases Report on Capsized Gulf of Mexico Vessel – The National Transportation Safety Board (NTSB) has published a preliminary report as part of its ongoing investigation of the fatal capsizing of the Seacor Power liftboat, which occurred on April 13, near Port Fourchon, Louisiana.According to the report, the Seacor Power departed Port Fourchon at about 1:30 p.m. on April 13 and was bound for the oil and gas lease area Main Pass Block 138 in the Gulf of Mexico (GOM). At about 3:30 p.m., as the vessel transited the open waters of the GOM, a rain squall passed over the liftboat, and as visibility dropped and winds increased significantly, the crew decided to lower the vessels legs to the seafloor to hold it in position until the storm passed, the report outlined.The crewmember at the helm attempted to turn the Seacor Power into the wind as the legs began to descend, but before the turn was completed, the liftboat heeled to starboard and capsized, the report revealed. Several people were able to escape onto the exposed, port side of the Seacor Power deckhouse but high winds and seas that had built to 10 to 12 feet prevented rescuers from reaching those who remained on the vessel, according to the report. Some were said to be washed into the water and six were eventually rescued, with one survivor suffering a serious injury, the report highlighted.The report noted that there were 19 people aboard the U.S.-flagged, 175 foot long vessel at the time of the accident. Six people were rescued by the Coast Guard and Good Samaritan vessels, six people died in the accident, and seven remain missing.NTSB investigators interviewed survivors, other personnel who previously crewed the Seacor Power, representatives for the owner and charterer, vessel inspectors and surveyors, and search and rescue responders. When the Seacor Power is salvaged, NTSB investigators intend to return to inspect the vessel and collect further evidence.The NTSB emphasized that information in its report is preliminary and subject to change as the investigation progresses. As such, it says no conclusions about the cause of the accident should be drawn from the report.

U.S. shale oil output to climb for first time in 3 months in June -EIA (Reuters) – U.S. oil output from seven major shale formations is expected to climb by 26,000 barrels per day (bpd) in June to 7.73 million bpd, the first rise in three months, the U.S. Energy Information Administration said in a monthly forecast on Monday. The biggest increase is set to come from the Permian, the top producing basin in the country, where output is expected to rise by 54,000 bpd to about 4.59 million bpd, the highest since March 2020. Output in nearly every other large basin such as the Bakken in North Dakota and Montana, as well as the Eagle Ford in South Texas is expected to decline. In the Bakken, production is expected to drop by about 7,000 bpd to 1.1 million bpd, the lowest since July 2020. Natural gas production from the major shale basins was expected to decline for the third month in a row in June for the first time on record, according to EIA’s drilling productivity report going back to 2007. Total gas output will decline about 0.1 billion cubic feet per day (bcfd) to 83.6 bcfd in June. That compares with a monthly record high of 86.9 bcfd in December 2019. Gas output in Appalachia, the biggest shale gas basin, was expected to decline 0.1 bcfd to 34.2 bcfd in June, its lowest since October 2020. That compares with a monthly record of 35.6 bcfd in December 2020. If correct, that would put output in Appalachia down for a record sixth month in a row. Gas output in the Haynesville area, meanwhile, will rise 0.1 bcfd to a record 12.8 bcfd in June. EIA said producers drilled 513 wells and completed 754 in the biggest shale basins in April. That left total drilled but uncompleted (DUC) wells down 241 to 6,857, their lowest since October 2018.

Oil drillers and Bitcoin miners bond over natural gas –(Reuters) – On U.S. oil patches stretching along the Rockies and Great Plains, trailers hitched to trucks back up toward well pads to capture natural gas and convert it on the spot into electricity. The trailers – carrying pipes, generators and computers – are called “mining rigs.” But their owners aren’t there to drill for oil. They are using stray natural gas unwanted by oil companies to power their search for another treasure: cryptocurrencies like Bitcoin. Cryptocurrencies are virtual coins exchanged without middlemen, such as central banks, to purchase goods and services. Extracting the currency from cyberspace, however, requires vast amounts of often-expensive electricity. Supercomputers must run constantly in a race against other “miners” to solve complex math problems in order to unlock digital vaults holding the currency. Placed in mobile trailers, these supercomputers run as hot as 160 degrees Fahrenheit (71 degrees Celsius), and in the cold of western North Dakota, people stay warm just by sitting near them, cryptocurrency miners say. The miners are increasingly sending these rigs out to oil fields because it’s one of the cheapest ways to obtain the energy they need. Oil and natural gas come from the same wells, but at these sites, drillers are seeking crude oil and have no pipelines to get the gas to market. That typically forces them to burn it off in a process called flaring – creating carbon dioxide emissions – or to vent it into the atmosphere directly as methane. “The sweet spot for us is stranded, low volumes of gas that don’t justify a pipeline,” said Steve Degenfelder, land manager at Wyoming-based producer Kirkwood Oil and Gas LLC, which has formed an alliance with Bitcoin miners. Oil companies face pressure from investors and government officials to reduce emissions that lead to global warming. Sometimes they give the gas away for free to cryptocurrency miners; other times they sell it. Story continues

Prices rebound, but oil may no longer be king – Oil and gas companies are emerging from the global pandemic more resilient to market downturns, but will most certainly be a smaller driver of economic growth for the Houston region in the coming years. The first three months of 2021 saw most oil majors and large independents post their first profitable quarter since the novel coronavirus broke out last year, offering the clearest sign yet that the industry is rebounding from the worst oil bust in decades. The rollout of COVID -19 vaccines is filling restaurants, airports and vacation destinations across the country, bolstering demand for crude. “Today, we’re seeing this rebound, which is happening faster than we thought and for some sectors, rising to higher levels than anticipated,” Exxon Mobil CEO Darren Woods told analysts this month. “One thing is for sure, these margins and prices will continue to move.” West Texas Intermediate, the U.S. crude benchmark, has rebounded to around $65 a barrel, a price at which many producers can turn a profit. A year ago, crude prices had plunged into negative territory for the first time in history as the pandemic forced most Americans home and slashed demand for petroleum products such as gasoline and jet fuel. However, oil companies aren’t taking $65 oil as a sign to drill, baby, drill. Despite returning to profitability and growing revenues, most oil companies have promised to hold down spending for new drilling projects – which may disappoint the tens of thousands of oil workers laid off during the pandemic. EOG CEO Bill Thomas told analysts this month that supply and demand will dictate the Houston shale producer’s growth plans – not the price of a barrel of crude. Companies are exercising restraint in part because the economic recovery from the pandemic remains tenuous. New coronavirus strains are running amok in countries such as India, while the pace of vaccinations in the U.S. is slowing. OPEC and its allies are gradually ramping up production to meet growing demand, putting pressure on U.S. producers. Oil executives have also promised capital discipline as part of an industry-wide effort to woo investors back to the sector after years of lackluster performance. Instead of spending to drill new wells and boost production, oil companies are focused on paying down debt and boosting returns through increased dividends and share buybacks.

Averting crisis: Path to weatherize Texas power plants and some gas wells set under compromise bill – Texas would require weatherization of electrical generating plants and some natural gas wells and related pipelines and compressors under a compromise bill that House leaders unveiled Tuesday. But in a concession to the oil and gas industry, a revised omnibus electricity measure would reduce how many natural gas facilities must be upgraded. A newly created interagency “supply chain security and mapping committee” would identify which chunks of the natural gas industry actually feed power generators – and only those would have to be weatherized, under rules to be set later. Environmentalists and consumer advocates, while wincing over the Texas natural gas industry’s clout, were relieved that the House’s version of the session’s major grid-overhaul bill took a softer approach to renewable energy than a Senate-passed version did. The House version, approved unanimously by the House State Affairs Committee on Tuesday, would remove language that would potentially force wind and solar power companies to pay billions for replacement power needed when the grid faces maximum demand. That change on “ancillary services” was hailed by Austin Democratic Rep. Donna Howard and spokesmen for groups such as Environment Texas, Public Citizen and the U.S. Green Building Council’s Texas chapter. Senate Bill 3, which advances to the House Calendars Committee, constitutes the Legislature’s single most far-reaching response to this year’s winter storm.

Texas’s Oil and Gas Industry Is Defending Its Billions in Subsidies Against a Green Energy Push – On a spring morning more than three decades ago, Don Henderson, a lawyer closely allied with the fossil-fuel industry, introduced a bill to slash the tax on natural gas wells deemed particularly tough to develop. “They can be huuuuuuge wells,” he told the finance committee. If these wells were so alluring, why did taxpayers need to offer Texas drillers a handout? Because, Henderson explained, the wells were “expensive and chancy.” So much for the image of risk-taking and self-sufficiency that the state’s oil and gas industry liked to tout. The federal government had long given producers of these wells a tax break, but that was to be phased out the following year. Henderson insisted that the state act to keep its oilmen competitive. “We need to continue to give an incentive to Texas producers,” he warned, noting that the type of wells targeted by the subsidy accounted for “a large part of the natural gas reserves of this state.” The committee unanimously approved the tax break, which was easily passed by the full Legislature. At first, the largesse spread slowly. In 1997 it applied to wells producing just 3 percent of Texas gas, costing the state a paltry $23 million. But then the fracking revolution hit, unleashing unimaginable quantities of gas from previously tough-to-crack rock. The many wells that could be tapped by the high-dollar technology qualified gas producers for a gusher of a handout. Of course, fracking ballooned not just expenses but also profits. By 2009, with the fracking frenzy in full swing, 61 percent of all the gas produced in Texas benefited from the tax break. Its cost to other state taxpayers that year, according to a University of Texas study: $1.5 billion, or $169 per household in the state. Since then, continued tech improvements have made producing fracked gas ever cheaper. Yet tax breaks, like old soldiers, seldom die, and Texas’s so-called high-cost gas-well subsidy remains on the books. All of which made a bit rich the supposedly righteous fury aimed during this spring’s state legislative session at subsidies for wind and solar energy. That anger, expressed through a handful of bills intended to raise the costs of renewables, blamed the death and economic devastation wreaked by the statewide February blackouts on lapses in wind and solar power. Never mind that state inquiries have shown that the major culprit in crashing Texas’s main electricity grid was the freezing not of renewable energy equipment but of the system that distributes gas to fuel power plants. And never mind that Texas is well positioned to profit from renewables, thanks to its ample wind and sun, its investment in transmission lines to move clean electricity, and the applicability of much of its oil and gas expertise to new challenges such as installing offshore wind turbines and drilling for geothermal energy.

Texas bars city climate plans from banning natural gas as fuel source –Gov. Greg Abbott has signed a bill into law that prohibits Texas cities from banning natural gas as a fuel source for new construction and utility services.House Bill 17, which Abbott signed Tuesday, according to the Texas Legislature’s online portal, is a response to a trend in progressive California cities. Abbott’s office did not immediately respond to a request for comment. The bill’s sponsor, state Rep. Joe Deshotel, D-Beaumont, argued that banning natural gas would restrict consumer choices. Deshotel was not immediately available for comment Tuesday, but he previously told The Texas Tribune that he filed the bill in response to “what is happening on the West Coast,” where cities have passed energy efficiency plans that prohibit new subdivisions from offering natural gas heating, requiring instead that new homes be heated by electricity.Using electricity to heat homes rather than natural gas reduces greenhouse gas emissions. The bulk of emissions from residential and commercial buildings in San Francisco are attributed to burning natural gas, which spurred the city’s efforts to mandate a transition, Inside Climate News reported in November.In Austin, the city’s initial climate action plan would have virtually eliminated gas use in new buildings by 2030, but it was altered after Texas Gas Service opposed the measure, the Texas Observer reported in March.The new law, which takes effect immediately, prevents cities or municipalities from “discriminating” against any particular fuel source.At least a dozen similar bills were filed in states including Kansas, Minnesota andOhio.

Deep earthquakes in Texas driven by shallow wastewater injection – Virginia Tech geoscientists have found that shallow wastewater injections can drive widespread deep earthquake activity in oil and gas production fields. The team came up with the finding after studying the Delaware Basin in western Texas, one of the most productive and unconventional hydrocarbon fields in the United States. Well drillers dispose of large volumes of brine– a toxic wastewater byproduct of oil and gas production– by injecting them into subsurface formations where it can drive earthquakes. Since 2010, the Delaware Basin has seen a major increase in shallow wastewater injection and widespread deep seismicity, including the recent M5.0 event near Mentone. Most of the tremors were relatively small, but some were large and widely felt. “It is quite interesting that injection above the thick, overall low-permeability shale reservoir can induce an earthquake within the deep basement, despite a minimal hydraulic connection,” said lead author Guang Zhai, a postdoctoral research scientist in the Department of Geosciences, who is also part of the Virginia Tech College of Science and a visiting assistant researcher at the University of California, Berkeley. “What we have found is that the so-called poroelastic stresses can activate basement faults, which is originated from the fluid injection causing rock deformation.” Study co-author Manoochehr Shirzaei, an affiliated faculty member of the Virginia Tech Global Change Center, added, “This finding is significant because it puts poroelastic stresses in the spotlight as the main driver for basinwide earthquakes in the Basin.” Predicting the amount of seismic activity from wastewater injection is troublesome, said Zhai, because it involves numerous variables, including injection depth. Although deep injection is known to be the dominant reason behind fluid pressure increase, it is still questionable how shallow injections cause earthquakes.The team looked at how varying amounts of injected brine disturbed the crustal stresses deep under the Delaware Basin and how the disturbances lead to earthquakes. “Fluids such as brine and natural groundwater can both be stored and move through rocks that are porous,” Zhai explained. The researchers used data analytics and computer modeling to imitate the large volume of fluid extraction from shale reservoirs from more than 1 500 shale production wells from 1993 to 2020, with 400 wells injecting brine in sandstone formations from 2010 to 2020. They found that the basinwide earthquakes mainly take place where the deep stress increases due to shallow injection. This indicates that there is a causal link between deep earthquakes and shallow fluid injection via elastic stress transfer.

US oil, gas rigs fall 12 to 543 on week, as industry focuses on recovering oil demand – The US oil and gas rig count fell 12 to 543 on the week, rig data provider Enverus said May 20, despite oil prices that have persisted above $60/b and drilling activity that has generally headed up in 2021. Analysts are painting a generally optimistic picture for the rest of the year as oil demand continues to recover from the coronavirus pandemic. But for the week ended May 19, rig losses prevailed in most of the eight largest domestic basins, with the Permian Basin of West Texas/New Mexico down four to 237 and the Eagle Ford Shale of South Texas down three to 41. The natural gas-prone Marcellus Shale, mostly in Pennsylvania, lost two rigs to 33, while the Haynesville Shale, a dry gas play in east Texas/northwest Louisiana, and the Utica Shale, largely sited in Ohio, each shed one rig for respective totals of 50 and 11.The natural gas rig count lost six units in the past week for a total 120 – four in the Haynesville and two in the Marcellus. The total domestic fleet was also down six oil rigs to 423. . The only major domestic basin to gain rigs this week was the SCOOP-STACK in Oklahoma, which pushed the play’s total to 22 – the highest level of activity for that play since mid-April 2020. Both the Bakken Shale of North Dakota/Montana and the DJ Basin mostly in Colorado were unchanged for the week at 17 and 14 rigs, respectively. For the same week ended May 19, crude prices remained strong, although down a bit, while gas prices were largely static, according to S&P Global Platts estimates. WTI averaged $64.86/b, down 32 cents, while WTI Midland averaged $65.17/b, down 20 cents and Bakken Composite, $62.84/b, down 81 cents. Natural gas prices at Henry Hub averaged $2.90/MMBtu, up 1 cent, while at Dominion South, the average was $2.21/MMBtu, down 5 cents.

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