Oil, Gas, And Fracking News Reads: 13June 2021 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles for the week ending 12 June 2021. Go here for Oil, Gas, And Fracking News Read 13June 2021 – Part 1.

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

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Activists Protest Against Line 3 as Enbridge Accelerates Pipeline Construction -Thousands of people from across the nation traveled to northern Minnesota this past weekend to join Indigenous leaders in what organizers described as the “largest resistance yet” to Line 3, an Enbridge-owned tar sands pipeline whose construction has accelerated in recent days as opponents warn the project poses a threat to waterways and the climate.The Treaty People Gathering kicked off Saturday, the first of several expected days of action against Enbridge’s multi-billion-dollar project, which aims to replace and expand the Canadian company’s existing pipeline along a route that crosses more than 200 bodies of water and 800 wetlands.If completed, the pipeline would have the capacity to carry more than 750,000 barrels of tar sands oil per day from Alberta, Canada to Wisconsin.Indigenous leaders have decried the pipeline expansion as a brazen violation of treaty rights that endangers sacred land. Attempts to block the pipeline in court have yet to succeed, leading Line 3 opponents to turn their focus to large-scale protests and civil disobedience.”We need to protect all that we have left of the sacred gifts and land,” said Dawn Goodwin of the Indigenous-led RISE Coalition. “I said that I would do all that I could. And I have done all that I could in the legal system, thus far following that process. Now, they have failed us through regulatory capture and corporate financing. So now we need you.”The latest major demonstrations against Line 3 are expected to begin on Monday, with prominent environmentalists such as Jane Fonda and Bill McKibben slated to join Winona LaDuke, Tara Houska, and other Indigenous activists in protesting the spill-prone pipeline.”Our Mother needs us to be brave, to give voice to the sacred and future generations,” Houska, founder of the Giniw Collective, said in a statement. “We’ve elevated the national profile of Line 3 through people power. [President Joe] Biden hears our voices, but the wetlands and wild rice need action.””We cannot mitigate the climate crisis and we cannot stand idly by as DAPL and Line 5 fossil fuels flow illegally, as young people chain themselves to the Mountain Valley pipeline and Line 3,” Houska continued. “Stand up for what is right, stand up for those not yet born.”

Oil pipeline foes protest Enbridge’s Line 3 in Minnesota (AP) – Hundreds of protesters vowing to do whatever it takes to stop a Canadian-based company’s push to replace an aging pipeline blocked a pump station Monday in northern Minnesota, with some people chaining themselves to construction equipment before police began making arrests. Environmental and tribal groups say Enbridge Energy’s plan to rebuild Line 3, which would carry Canadian tar sands oil and regular crude from Alberta to Wisconsin, would worsen climate change and risk spills in sensitive areas where Native Americans harvest wild rice, hunt, fish, gather medicinal plants, and claim treaty rights. By evening, at least 30 people were arrested by state police and sheriff’s officers, but the number “is growing rapidly,” Ashley Fairbanks, a spokeswoman for Treaty People Gathering, told The Associated Press. None of them appeared to resist as allies chanted “We love you.” Protesters said the Treaty People Gathering was the largest show of resistance yet to the project. The crowd showed no signs of leaving hours after an earlier protest at the headwaters of the Mississippi River, roughly 20 minutes away, where they chanted “Stop Line 3!” and “Water is life!” “This is important. This is what we need,” actress Jane Fonda told the AP at the rally, motioning toward the crowd as she held signs with President Joe Biden’s image that said, “Which side are you on?” She urged protesters to keep pressuring Biden to halt construction so his administration can study any harm to the environment and indigenous people. The Mississippi River is one of the water crossings for the pipeline. Fonda said Line 3 protesters “are going to Standing Rock this place,” referring to the Dakota Access pipeline, which is owned by a different company and was the subject of major protests near the Standing Rock Indian Reservation in the Dakotas in 2016 and 2017. Activists said they were pitching tents at the pump station site Monday night, and an AP reporter saw people rolling a large wooden spool that holds wire into a pile of trees and twigs. Police were directing traffic. Elizabeth Claggett-Borne, 55, of Cambridge, Massachusetts, sat in a beach chair perched in front of a boat blocking the entrance to the work site. She was equipped with a homemade device made of rebar, PVC pipe and handcuffs, in order to make it more difficult for authorities to remove her from the site. “We’re just foot soldiers,” she said. “But we’re here to stay.” Minnesota Public Radio News reported that a Border Patrol helicopter at one point hovered about 20 feet (6 meters) off the ground, blowing up sand and dirt, to try to get protesters to leave. Enbridge said that 44 workers were evacuated from the site in an effort to de-escalate the situation. In a written statement, the company said it “hoped all parties would come to accept the outcome of the thorough, science-based review and multiple approvals of the project.” Spokeswoman Juli Kellner said the company will assess potential damage once it can safely reenter the site.

Dawn Goodwin and 300 Environmental Groups Consider the new Line 3 Pipeline a Danger to All Forms of Life —Leeches love Northern Minnesota. The “Land of 10,000 Lakes” (technically, the state sports more than 11,000, plus bogs, creeks, marshes and the headwaters of the Mississippi River) in early summer is a freshwater paradise for the shiny, black species of the unnerving worm. And that’s exactly the kind local fisherman buy to bait walleye. People who trap and sell the shallow-water suckers are called “leechers.” It’s a way to make something of a living while staying in close relationship to this water-world. Towards the end of the summer, the bigger economic opportunity is wild rice, which is still traditionally harvested from canoes by “ricers.” When Dawn Goodwin, an Anishinaabe woman who comes from many generations of ricers (and whose current partner is a leecher), was a young girl, her parents let her play in a canoe safely stationed in a puddle in the yard. She remembers watching her father and uncles spread wild rice out on a tarp and turn the kernels as they dried in the sun. She grew up intimate with the pine forests and waterways around Bagley, Minnesota, an area which was already intersected by a crude oil pipeline called “Line 3” that had been built a few years before she was born. Goodwin is 50 now, and that pipeline, currently owned and operated by the Canadian energy company Enbridge, is in disrepair. Enbridge has spent years gathering the necessary permits to build a new Line 3 (they call it a “replacement project”) with a larger diameter that will transport a different type of oil – tar sands crude – from Edmonton, Aberta, through North Dakota, Minnesota and Wisconsin, terminating at the Western edge of Lake Superior where the thick, petroleum-laced sludge will be shipped for further refining. Despite lawsuits and pushback from Native people in Northern Minnesota and a variety of environmental groups, Enbridge secured permission to begin construction on Line 3 across 337 miles of Minnesota last December. The region is now crisscrossed with new access roads, excavated piles of dirt, and segments of pipe sitting on top of the land, waiting to be buried. Enbridge has mapped the new Line 3 to cross more than 200 bodies of water as it winds through Minnesota. Goodwin wants the entire project stopped before a single wild rice habitat is crossed. “Our elders tell us that every water is wild rice water,” Goodwin said on Saturday, as she filled up her water bottle from an artesian spring next to Lower Rice Lake. “Tar sands sticks to everything and is impossible to clean up. If there is a rupture or a spill, the rice isn’t going to live.”

Opponents take stand against Enbridge Line 3 – Indian Country Today – The Mississippi River, or Great River in the Ojibwe language, is barely three feet in width near its headwaters in northern Minnesota. Tender and vulnerable, it meanders across the landscape with no hint at its greatness farther south. It’s here near the river’s headwaters that Enbridge is completing construction on the Line 3 pipeline and its numerous crossings under the river. And it’s here that hundreds of water protectors and supporters are making a stand Monday opposing the project. Numerous environmental, faith and Indigenous groups organized the Treaty People Gathering this weekend, describing it as the largest act of resistance so far to the pipeline. Attendees are encouraged to “put their bodies on the line to stop construction and tell the world that the days of tar sands are over,” according to the Treaty People Gathering website, Organizers and participants met all weekend on the White Earth Reservation learning about the importance of treaties and the Ojibwe connection to the area, hearing speeches from faith leaders and water protectors and preparing and planning acts of civil disobedience. During a brief visit to the Treaty People Gathering camp that was closed to the media, Indian Country Today counted about 600 people; it’s unclear how many will participate in actions opposing the pipeline Monday. Water protectors have expressed concern over local law enforcement’s use of “kettling” tactics to arrest people participating in civil disobedience during past actions. According to one of the gathering’s organizers who spoke on condition of anonymity, the U.S. Department of Justice sent two liaisons to meet with pipeline opponents to hear their concerns about use of the controversial law enforcement tactic. The Department of Justice public affairs office did not respond to Indian Country Today’s telephone calls or email seeking comment. Often used during the Black Lives Matter protests, “kettling” involves police corralling protesters and preventing them from leaving before making arrests or issuing citations. Several opponents including the Minnesota Department of Commerce, several of the state’s Ojibwe tribes and environmentalists have argued in court that a need for the pipeline has not been proven and that it poses significant environmental risks to sensitive areas.

Line 3 opponents occupy Enbridge pump station as protest ramps up – For several years now, environmental and tribal groups battling the Line 3 oil pipeline have fought the project in front of state regulators, in the courts and on the streets.They’ve dotted the route with resistance camps, and they’ve chained themselves to branches of banks with ties to the project.Their opposition so far hasn’t stopped the pipeline. Enbridge Energy says it is more than halfway through building the $4 billion project across northern Minnesota.So now activists are taking their protest to the next level.On Monday morning, hundreds of people trespassed onto the Two Inlets pump station site a few miles south of Itasca State Park to protest the ongoing construction of the new pipeline, which will replace a line that’s been carrying Canadian tar sands oil across northern Minnesota since the 1960s. Dozens locked themselves to bulldozers, excavators and other construction equipment using devices known as sleeping dragons, so law enforcement wouldn’t be able to easily cut them free.”To see people engaging in personal risk like this, and to see so many young people and folks of all walks of life, it’s so beautiful and powerful,” said Tara Houska, founder of the Giniw Collective, one of dozens of groups that organized the week’s actions. “It’s an incredible moment.” The Indigenous-led, multiday event, called the Treaty People Gathering, began over the weekend and is expected to reach into the week, with prayer, marches and direct action. Organizers say they hope to draw attention to the fight against the pipeline that they argue will exacerbate climate change and threaten the waters of treaty lands in northern Minnesota.Their goal is to push the Biden administration to stop the Line 3 project, as it did the Keystone XL pipeline. “Without direct action, and people engaging in personal risk,” Houska said, “the pressure just isn’t there.” One of the activists, a young woman who didn’t want to give her name because she was risking arrest, lay flat on her back, locked together with another person to a hydraulic construction lift.This type of protest has several goals, she said. “One is to to shut it down to shut down work, which we’ve successfully done,” the woman said, “and to cost Enbridge time and money and to raise a lot of awareness about the urgency of stopping this pipeline and get as much attention drawn to it as we can.” But company spokesperson Juli Kellner said stopping work at one pump station for a day won’t have a huge impact on the overall project.”We have five active construction zones with multiple construction sites in each zone, and having one shut down is not necessarily impactful in the large view of the project,”

Pipeline protesters seize Minnesota construction site in bid to stop $4 billion project – – The young climate activists met at the windmill shortly after sunrise. There were several missions underway on Monday morning but “marmalade” and “peanut butter” were particularly high risk. Protesters using those code names planned to descend on an undisclosed location along a pipeline route known as Line 3. They were ready for arrests. Dozens of cars were soon caravanning down dusty dirt roads amid corn and soybean fields in the largest salvo yet in an ongoing civil disobedience campaign to try to stop a border-crossing oil pipeline running from Canada across the wetlands and forests of northern Minnesota. By midmorning, hundreds of protesters, led by Native American women and joined by celebrities such as Jane Fonda and Catherine Keener, had marched into a construction site operated by Enbridge, the Canadian company behind the pipeline, and strapped themselves to bulldozers and other heavy machinery. “Good morning water protectors!” Tara Houska, a Native American lawyer and a leader of the Line 3 protests, shouted to the group as she banged a drum and crossed into a pump station that organizers said is used to electrify the pipeline. The intensifying conflict over Line 3 has been driven in part by Indigenous activists who see a double-barreled threat in the pipeline: a carbon-producing fossil fuel project at a time of worsening climate change and one that also risks polluting tribal lands in the headwaters of the Mississippi River. Emboldened by some victories – such as the cancellation of the Keystone XL pipeline, and the gatherings at Standing Rock – protesters hope to intensify pressure on the Biden administration to suspend the pipeline permit before the project is completed. “[President Joe] Biden has taken a very clear and very beautiful position on the climate crisis,” Fonda, who was making her second trip to protest Line 3, said in an interview. “But we are really facing a potential catastrophe, and the science is very clear: it’s not enough to do something good here – like shutdown Keystone XL, shut down drilling on the Arctic national refuge – and then allow Line 3 to go through.” “We can’t do this in bits and pieces,” she said. So far, the activism has done little to impede the $4 billion project, which is a replacement of a decades-old pipeline, although portions of it travel a new route. About 60% of the 350-mile Minnesota portion of the new Line 3 has been built and some 4,000 construction workers – and growing – are at work on five different areas of the project, according to Enbridge officials. The ongoing protests haven’t “had a significant impact on construction,” said Paul Eberth, Enbridge’s director of tribal engagement in the United States. “Obviously it’s stressful when people are out protesting or if they’re doing damage to equipment or being disrespectful for the workforce.” “Construction largely has proceeded as planned,” he said. The Line 3 pipeline is about 1,000 miles long and runs from Alberta, Canada, to Superior, Wis., one of a network of pipelines the company operates in the Midwest. There have been disputes over other Enbridge pipelines: In November, Democratic Gov. Gretchen Whitmer ordered a nearly 70-year old pipeline called Line 5 in Michigan to be shut down over concern about impacts to the Great Lakes. Enbridge said Line 3 has “passed every test” in six years of regulatory and permitting review including 70 public comment meetings. Company officials also say they have taken extensive input from tribal nations – including some directly impacted tribes who support the pipeline – and about 500 Native Americans have worked on the project.

Thousands Came to Minnesota to Protest New Construction on the Line 3 Pipeline. Hundreds Left in Handcuffs but More Vowed to Fight on. – Inside Climate News – The trickle of activists began on Thursday but it quickly grew into a stream that filled northern Minnesota campgrounds surrounding the Mississippi River headwaters over the weekend. By Monday night, some 200 protesters had been arrested as they attempted to stop the construction of Enbridge’s Line 3 replacement project. Many had chained themselves to pipeline construction equipment hoping to delay a project that they say would lock Minnesota – and the nation – into decades of continued burning of some of the world’s dirtiest oil and threatens the pristine waterways that many Indigenous people depend on for their livelihoods.”This is just the beginning,” said Winona LaDuke, an Anishinaabe woman and longtime Indigenous activist who has been fighting the project since it was first proposed in 2014, according to the Star Tribune.The Treaty People Gathering was organized by a coalition of Native rights groups and environmental organizations that intended “to put our bodies on the line, to stop construction and tell the world that the days of tar sands pipelines are over.”In a written statement Monday, the company said that it was “disheartened” by the protest’s disruption and “destruction” at its worksite. But as the four-day event wound down on Tuesday and skirmishes between police and activists quieted, Indigenous leaders vowed to continue their protests.Enbridge is now moving to revive construction after being delayed by a muddy spring. And as protesters redouble their efforts to stop Line 3, they are being met with equally intensifying resistance from police who are carrying out the will of state policymakers who have long resisted calls to transition the U.S. economy to clean energy.Over the last four years, 15 states have adopted new laws that increase the penalty for trespassing on critical infrastructure like oil pipelines. Five other states, including Minnesota, are considering similar measures, which have become growing points of political tension between progressives and conservatives in the country’s cultural wars. Those tensions played out Monday as encounters between police and protesters became increasingly hostile. Federal officials are reportedly investigating the use of a low flying helicopter that activists said was meant to intimidate them, according to media reports. The New York Times reported that authorities also appeared to use a Long Range Acoustic Device, or LRAD, to drive protesters away with noise. The hostilities were reminiscent of the 2016 Standing Rock protests, where police were filmed using attack dogs, spraying water cannons and firing rubber bullets on Indigenous and environmental activists who attempted to stop the construction of the Dakota Access Pipeline in North Dakota. But for some of the protesters in northern Minnesota this week, the aggressive police tactics only compounded the sting of failing to stop the Dakota Access Pipeline. “People forget that we lost that fight,”

Low-Flying DHS Helicopter Showers Line 3 Protests With Debris — The largest civil disobedience yet against new pipeline construction in Minnesota was met by a furious response – and a cloud of debris. A Department of Homeland Security Border Patrol helicopter descended on the protest against the Enbridge Line 3 tar sands pipeline, kicking up dust and showering demonstrators with sand, in an unusual attempt to disperse “I perceive this to be a tactic they utilized to deter people from arriving in large masses. That’s not safe.” the crowd. “I couldn’t see because it got in my eyes,” said Big Wind, a 28-year-old Northern Arapaho organizer with the anti-pipeline Giniw Collective, who was there when the helicopter swooped over the civil disobedience action. “After it pulled up there were a lot of people who were ducking, who were in the fetal position, just because they didn’t know what was going to happen and were trying to protect themselves from the sand.” The low-flying federal helicopter is an early signal of how law enforcement in Minnesota will deploy more than a year’s worth of training and preparations against what pipeline opponents have promised will be a summer of resistance. The tactic – which was criticized because of the extremely low flyover – suggests that the multiagency law enforcement coalition overseeing the police response is willing to bend safety standards in order to break up demonstrations. Pipeline opponents, who identify as water protectors, say the point of the helicopter’s activity seemed to be to use the dust to intimidate and scatter the crowd. Big Wind said they heard no dispersal order coming from the helicopter. “I perceive this to be a tactic they utilized to deter people from arriving in large masses,” they said. “That’s not safe.” Authorities later claimed that the helicopter was being used to make an announcement for demonstrators to disperse, but the announcement was inaudible to many demonstration participants. “There were rumors that it was saying something, but I couldn’t hear anything,” said Kate Sugarman, a 60-year-old pipeline opponent who was standing on the public road when the helicopter arrived. “To those of us on the ground it felt like a scary encounter, and it was not a way to easily send a message.”

Officials: More than 200 arrested in northern Minnesota Line 3 protests | MPR News — Hundreds of people blocked access to an Enbridge pipeline pumping station being built a few miles south of Itasca State Park during a day of protests Monday.Some locked themselves to construction equipment on the Two Inlets pump station site or to a boat that protesters were using to block a road that leads to the station.A total of 247 people were arrested, according to a release from the Northern Lights Task Force, a coalition of northern Minnesota law enforcement agencies created to address pipeline-related protests. The task force said 179 people were arrested and booked into area detention centers. An additional 68 people were cited and released.The statement said most were charged with gross misdemeanor trespass on critical infrastructure, or public nuisance and unlawful assembly.A few dozen protesters have continued to camp along the Mississippi River about 20 miles east of the pump station site. The location marks a spot where Line 3 is slated to cross the river, a few miles from the headwaters.A forklift sits with flat tires after activists let air out of the tires inside of an Enbridge Line 3 pump station near Park Rapids, Minn., on Monday.Since Monday, the protesters, who call themselves water protectors, have erected tents along the pipeline’s path. The camp was erected as part of a multi-day, Indigenous-led protest against the Line 3 project called the Treaty People Gathering. The event included prayers, marches and direct action to protest the pipeline.

A Biden Climate Test on the Banks of the Mississippi – – Bill McKibben -The backstory is that a big Canadian company, Enbridge, has been trying to expand and replace a pipeline, called Line 3, that runs across northern Minnesota. It would be about the same size as the now vanquished Keystone XL pipeline, and carry seven hundred and sixty thousand barrels of regular crude and tar-sands oil from Canada each day. (Enbridge characterizes the project as a “replacement” of the existing pipeline, but it will double the current capacity.) Most of the activists are Indigenous, led by groups such as Honor the Earth and the Giniw Collective, and many of those are led by remarkable women – Winona LaDuke, Tara Houska, and Dawn Goodwin, among many others. They have waged a stout campaign through a bitter Midwestern winter, but it has been hampered by the pandemic. Now vaccines have freed others to join them, and Monday was the first big mobilization. . In 2015, the Obama Administration, with Joe Biden as Vice-President, pulled the permits for Keystone XL, because it failed the White House’s climate test. “America’s now a global leader when it comes to taking serious action to fight climate change,” President Obama said. “And, frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face – not acting.” So why would the Biden Administration let a pipeline of almost the same size, carrying tar-sands oil, proceed? Since 2015, the United States has joined (and rejoined) the Paris climate accord, promising to hold temperature increases to as close to 1.5 degrees Celsius as possible, and the world’s climate scientists have explained that this means cutting emissions forty-five per cent by 2030. And we’ve seen the hottest year, the worst wildfire season in the American West, the biggest Atlantic storm season, and the highest temperature ever reliably recorded in America. Meanwhile, the price of solar power has dropped by half in the past decade. So, if the KXL failed the climate test six years ago, how could Line 3 pass it today? Enbridge told the Times that it has “passed six years of regulatory and permitting review.” But this most basic climate question has never been answered: How does increasing the flow of tar-sands oil not make progress in cutting emissions more difficult?

Native American contractors’ letter seeks end to protests over Line 3 pipeline – – Native American contractors working on the controversial Enbridge Line 3 pipeline across Minnesota say the Indigenous-led protests that escalated Monday do not speak for them. “Protests that disrupt work, damage property and threaten our employees while claiming to be on behalf of our Native people is creating additional tension and consequences within our tribal communities,” six contractors wrote in a letter being sent to Minnesota tribal leaders this week. “They also intentionally create a false narrative that there is no Native American support for this project and the economic impacts and opportunities it brings to our people.” Thousands of people gathered near the Mississippi River headwaters over the weekend, culminating in both a peaceful march and an occupation at a pump station construction site that resulted in hundreds of arrests and citations. As protesters locked themselves to equipment and blocked the access road with debris, Enbridge said it evacuated 44 employees, 10 of whom work for White Earth Reservation-based Gordon Construction. Owner Matt Gordon was one of those who signed the letter calling for “leaders of tribal communities across Minnesota to renounce these actions and call on these groups to stop future destructive and unlawful protests that endanger our Native workers and divide the communities in which we work and live.” The White Earth, Red Lake and Mille Lacs bands have steadfastly opposed Line 3, which will cost Enbridge well more than $3 billion. The Fond du Lac Band of Lake Superior Chippewa did as well until regulators approved the pipeline and the band opted for a deal with Enbridge to allow the new Line 3 on its land. The Leech Lake Band of Ojibwe supported the new Line 3 in order to get the 50-year-old, deteriorating Line 3 extracted from its land. (The new pipeline runs partly on a new route outside of the Leech Lake reservation.) Two smaller Ojibwe bands have not taken a stance on the pipeline.

ENERGY TRANSITIONS: What pipeline protests reveal about Biden’s oil plan — Wednesday, June 9, 2021 — A major pipeline protest in the Midwest wound down yesterday as White House climate envoy John Kerry endorsed pipelines. What do the moves reveal about the Biden administration?

Biden’s Climate Chief Plans Oil-CEO Talk on Carbon Crackdown – Chief executives of some of the largest U.S. oil companies are set to meet with White House National Climate Adviser Gina McCarthy on Wednesday as the Biden administration nears pivotal decisions on drilling and auto emissions.The session will be at least the second meeting this year between top oil executives and McCarthy, who is coordinating the Biden administration’s efforts to clamp down on greenhouse gas emissions from burning the industry’s core products. The meeting is set to involve McCarthy and members of theAmerican Petroleum Institute‘s executive committee, according to two people familiar with the matter.The White House said in an emailed statement that it meets “with a wide-range of sectors that all play an important role moving us towards a clean energy future that tackles the climate crisis, creates good-paying union jobs and secures environmental justice.”Representatives of API did not have an immediate comment.The session comes as the Biden administration weighs a number of new regulations that will directly affect the oil industry. The administration is also asking Congress to impose a clean electricity mandate as part of a goal for a carbon-free grid by 2035, which could edge natural gas out of the nation’s power system.The Interior Department is preparing to send a reportto the White House this month on whether, and how, it can restart the U.S. government’s oil and gas leasing programs. The agency paused selling new oil and gas leases on federal lands and waters in January so it could conduct the broad review. The interim report is set to outline potential changes — from narrowed acreage and more stringent climate considerations to higher royalty payments — that could accompany the restart of leasing. Some oil and gas industry advocates have criticized the pause, saying a long-lasting moratorium threatens jobs and essential American energy production. The Western Energy Alliance and the state of Wyoming have challenged the pause in federal court. The Environmental Protection Agency, meanwhile, is honing a proposal for new standards governing greenhouse gas emissions from automobile tailpipes. And the Energy Department is advancing programs to spur development of hydrogen that dovetail with oil industry efforts to produce hydrogen using natural gas.During a previous meeting with McCarthy in March, executives pledged to collaborate with the administration on the reduction of methane releases from oil wells and equipment.

Interior proposes withdrawal of Trump rule that would allow drillers to pay less –The Interior Department has proposed a rule to withdraw a Trump-era regulation that was expected to lessen the amount of money that companies pay the government to drill on public lands and waters. The Biden administration in a swipe at Trump’s said the rule would “shortchange” taxpayers, in light of findings that it would benefit oil and gas companies by millions of dollars. After thoughtful consideration, the Department of the Interior is proposing to withdraw an attempt by the previous administration to shortchange American taxpayers for the resources that oil and gas companies extract from public lands,” an Interior Department spokesperson said in a statement. “The Department’s ongoing review of the 2020 rule ensures that communities receive a fair return from onshore and offshore energy development,” the spokesperson added. The Trump rule in question changed the way that royalties are calculated that companies pay to the government for drilling on federal property.A new economic analysis justifying the proposed withdrawal said that getting rid of the Trump rule will allow the federal government to collect an additional $64.6 million in fees annually. The Trump administration had billed it as a way to give regulatory certainty and free companies from burdensome regulations. It came after a request from the American Petroleum Institute industry group for changes to how these royalties are calculated. The proposed withdrawal comes after a series of delays the Biden administration put on the rule to prevent it from taking effect. It’s currently halted until November. In its proposal, the Biden administration argued that the Trump rule had “defects” including an inadequate justification, consideration of alternatives and public comment period.

Governor using CARES funds to re-launch Energy Rebound Program – – Governor Mark Gordon has announced that up to $12 million of remaining CARES Act funds will be used to fund the Energy Rebound Program, which is designed to get more people working in the energy industry.In 2020 the Energy Rebound Program provided badly needed capital for specified oil and gas projects, including drilled but uncompleted ventures, workovers, and reclamation of oil and gas wells through the plugging and abandonment process, according to a press release.”The Energy Rebound Program successfully provided opportunities for oil and gas industry employees who lost jobs when drilling ceased last year,” Governor Gordon said. “This program will continue to provide economic benefits to this important industry, their workforce and the entire state of Wyoming.”

Judge blocks drilling plans in 2 states, citing bird habitat (AP) – A judge has halted plans for oil and gas drilling on vast areas of Wyoming and Montana, citing concerns about a sagebrush-dwelling bird. The U.S. Bureau of Land Management didn’t adequately consider how the drilling would affect the greater sage grouse, nor an option to defer drilling in the bird’s prime habitat, Idaho U.S. District Judge Ronald E. Bush ruled Wednesday. Bush ordered more study of potential effects on the bird before drilling may proceed. The drilling would occur on over 600 square miles (1,500 square kilometers) of federal land scattered across the energy-rich states. The Bureau of Land Management auctioned off hundreds of leases in sage grouse habitat in four sales in 2017. Sage grouse are a chicken-sized, primarily ground-dwelling bird whose numbers have fallen significantly from the millions that inhabited the U.S. West in frontier times. The U.S. Fish and Wildlife Service determined in 2010 that the bird deserved special protection but said in 2015 that conservation efforts led by Wyoming made that unnecessary. The environmental group that sued over the leases praised Bush’s ruling. “This ruling sends a very strong message that the BLM can no longer lease public lands for fossil fuel development without weighing the outcomes for sensitive lands and wildlife,” Erik Molvar, executive director of Western Watersheds Project, said in a statement Thursday. BLM spokesman Brad Purdy declined to comment, citing agency policy not to discuss ongoing litigation. The agency’s allies in the case included the Western Energy Alliance industry group and the state of Wyoming, where Republican Gov. Mark Gordon was weighing whether to appeal. “The governor is dismayed by Judge Bush’s ruling but is pleased that the leases have not been vacated,” Gordon spokesman Michael Pearlman said by email. The ruling comes amid a federal oil and gas leasing moratorium imposed by President Joe Biden’s administration while it studies the effects on climate change.

Navy says more than two-thirds of oil spilled in Port Townsend Bay has been recovered – Approximately 100 gallons of oil was spilled from the Navy destroyer USS Gridley after the ship left Naval Magazine Indian Island Thursday morning, the Navy announced late Friday. Officials said Friday the clean-up effort had reached its end, and approximately 70 gallons of oil was recovered from the waters of Port Townsend Bay. The remaining oil in the area dissipated, the Navy said. The spill was discovered around 10:30 a.m. Thursday, and the Navy earlier estimated 20 gallons of oil had spilled from the warship. “As soon we were aware of this spill, Indian Island’s emergency response personnel immediately sprang into action to contain it, assess the situation and begin clean-up efforts,” said Naval Magazine Indian Island Commanding Officer Cmdr. Donald Emerson. The cleanup and containment effort included the deployment of 200 feet of oil spill containment boom. The spill was contained by 1 p.m. Thursday, and oil recovery efforts continued until 5:30 p.m. Thursday before being restarted Friday morning. The cleanup effort ended about 10 a.m. June 4. The Navy is still investigating the cause of the spill. Navy officials said the spill will have a minimal impact to the local environment, including Port Townsend Bay’s shorelines and nearshore habitat. The spill happened just beyond the installation’s port security barrier in open water, during a slack tide with a very light breeze. Officials said the weather and ocean conditions were optimal and supported the Navy’s response efforts to effectively contain the spill and clean it up.

Rail union says ‘sabotage’ caused 2020 oil train derailment in Washington –A rail union representative has blamed an oil car disaster that took place last year in Washington state on “sabotage.” Last year, two tanker cars lost their hold on one another, drifted apart and caused a crash that derailed 10 cars, with three cars bursting into flames. A detachment would normally trigger an emergency brake, forcing them to stop. KUOW reports that Korey McDaniel, a member of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), told railway investigators that the Dec. 22 crash last year was “without a doubt” caused by sabotage. “We know from the FBI investigation, from how trains operate, how trains work, how the couplers work, how the pin lifters work, that this incident was caused without a doubt by sabotage,” McDaniel said during a hearing, according to KUOW who obtained a transcript. KUOW notes that two young men were reported to have emerged from the tracks before the crash, though no suspects have been revealed by the FBI so far. National Transportation Safety Board investigator Russell Quimby told KUOW, “Whoever did this had enough knowledge of railroad equipment to know what he’s doing and enough knowledge of an air-brake system to know what to do.” No one has claimed responsibility for the train crash, KUOW notes, with the rail company so far blaming the rail crew for failing to detect the compromised train brakes.

EPA fines Sand Island fuel storage facility for oil spill prevention violations – – The U.S. Environmental Protection Agency (EPA) announced a settlement with the owner and the operator of the bulk fuel storage facility at Sand Island on Tuesday, June 8. Hawaii Fueling Facilities Corporation (HFFC) owns the facility and Signature Flight Support Corporation (SFSC) operates it. About 1,944 gallons of fuel were recovered outside of the boundaries of the facility in January 2015 after a former operator noticed an inventory discrepancy in one of the tanks. The facility houses 16 bulk aboveground storage tanks and the former operator estimated 42,000 gallons of jet fuel had been released from the bottom of a tank. Crews continue Sand Island-area jet fuel cleanup, expand to off-site contamination Information gathered by EPA inspectors and the 2015 release revealed non-compliance with the Spill Prevention, Control, and Countermeasure (SPCC) Rule, a regulation under the Oil Pollution Act of 1990, according to the EPA. “It is paramount that facilities properly prepare and implement a Spill Prevention, Control, and Countermeasure Plan to prevent discharges of oil to Hawaii’s waterways. Companies that do not comply can face significant penalties.” HFFC and SFSC must take the following actions under the terms of the settlement:

• Install a double bottom tank floor on all remaining single bottom tanks by December 31, 2028.
• Conduct more frequent physical tank inspections until all tanks are retrofitted with a double bottom.
• Implement additional monitoring to detect leaks.
• Install an impervious liner within three years, or alternatively, implement an improved sub-surface slurry wall and revise the facility’s SPCC plan within 90 days of installation.
• Pay a civil penalty of $150,000.

U.S. Oil Exports Surged in 2020, Imperiling Climate – The United States became a net oil exporter in 2020 – marking the first time in the 70 years the government has tracked the trade in petroleum that America shipped more oil abroad than it imported. This sea change,highlighted this week by the Department of Energy, marks America’s emergence as a petroleum superpower at just the moment when new leadership in the White House is attempting to convince the world to transition away from fossil fuels to curb runaway global warming.For decades, America’s car-centric culture was powered by foreign oil, including imports from the volatile Middle East, as well as countries like Mexico, Canada, and Venezuela. Accordingly our foreign policy – including two wars with Iraq and an unwavering devotion to Saudi Arabia – was driven by the imperative to secure the steady crude flow of crude. In 2005, American net oil imports peaked at 12.5 million barrels a day. But with the advent of fracking, unlocking massive domestic petroleum reserves in shale deposits in places like West Texas and North Dakota, America’s net imports of oil have been in sharp decline. As a matter of national security, U.S. crude oil exports had been blocked since the oil shocks of 1970s. But that changed in 2015 when a Republican-led congress passed, and President Barrack Obama signed, an omnibus spending bill with a provision that let oil giants – much to their collective delight – begin shipping American oil abroad again. At the time, the U.S. was still importing, on net, more than 4 million barrels a day. But by last year, exports slightly overtook imports, by about 650,000 barrels a day. (See the data here.)The Biden White House has put tackling climate change near the top of its priorities, rejoining the Paris climate accord, hosting a Climate Summit in April and staking out 50 percent emissions reduction for the United States by 2030, measured against a 2005 baseline. And even as the president and his team seek to reestablish American climate leadership, the surge in U.S. oil exports underscores how challenging fighting global warming in a globalized economy will be. If American consumers finally begin to tame our fossil fuel gluttony, only to have American companies flooding the global market with cheap, fracked-in-the-USA crude – delaying a transition from fossil fuels abroad – is that truly progress?

Keystone XL Pipeline Project Is Canceled – NYTimes –The Canadian pipeline company that had long sought to build the Keystone XL pipeline announced Wednesday that it had terminated the embattled project, which would have carried petroleum from Canadian tar sands to Nebraska.The announcement was the death knell for a project that had been on life support since President Biden’s first day in office and had been stalled by legal battles for years before that, despite support from the Trump administration.On the day he was inaugurated, Mr. Biden, who has vowed to make tackling climate change a centerpiece of his administration,rescinded the construction permit for the pipeline, which developers had sought to build for over a decade. That same day, TC Energy, the company behind the project, said it was suspending work on the line.On Wednesday, the company wrote in a statement that it “will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.”Environmental activists cheered the move and used the moment to urge Mr. Biden to rescind the Trump-era permits granted to another pipeline, the Enbridge Line 3, which would carry Canadian oil across Minnesota. Hundreds of protesters were arrested earlier this week in protests against that project.”The termination of this zombie pipeline sets precedent for President Biden and polluters to stop Line 3, Dakota Access, and all fossil fuel projects,” said Kendall Mackey, a campaign manager with 350.org, a climate advocacy group. “This victory puts polluters and their financiers on notice: Terminate your fossil fuel projects now – or a relentless mass movement will stop them for you.”On Capitol Hill, Republicans slammed Mr. Biden. “President Biden killed the Keystone XL pipeline and with it, thousands of good-paying American jobs,” said Senator John Barrasso of Wyoming, the ranking Republican on the Senate Energy committee. “On Inauguration Day, the president signed an executive order that ended pipeline construction and handed one thousand workers pink slips. Now, ten times that number of jobs will never be created. At a time when gasoline prices are spiking, the White House is celebrating the death of a pipeline that would have helped bring Americans relief.”The 1,179-mile pipeline, which would have carried 800,000 barrels a day of petroleum from Canada to the Gulf Coast, had become a lightning rod in broader political battles over energy, the environment and climate change.

Keystone XL Developer Abandons Pipeline Project by Jerri-Lynn Scofield – TheCanadian developer of the Keystone XL oil pipeline, TC Energy and the government of the province of Alberta, has abandoned the project, which would have transported 800,000 barrels of petroleum per day from Canadian tar sands to Nebraska, and then onward through existing pipelines to to the Gulf Coast.Cancellation was expected after Biden on his first day in office revoked a construction permit for the pipeline. As the New York Times reported in The Keystone XL pipeline project has been terminated.:On the day he was inaugurated, Mr. Biden, who has vowed to make tackling climate change a centerpiece of his administration, rescinded the construction permit for the pipeline, which developers had sought to build for over a decade. That same day, TC Energy, the company behind the project, said it was suspending work on the line.On Wednesday, the company wrote in a statement that it “will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.”Keystone XL would have expanded the original Keystone pipeline. Planning for the extension commenced at a time when oil market conditions were very different from those that prevail today. According to the WSJ in What Is the Keystone XL Pipeline and Why Did President Biden Issue an Executive Order to Block It?:The expansion was originally conceived when oil prices were at historic highs – just before the 2008 financial crisis and American shale oil boom – as an artery that would pump 500,000 barrels of Canadian crude more than 1,700 miles from Alberta to the U.S. Gulf Coast. The line, which is now partially built but not operating, was eventually expected to transport 830,000 barrels of oil 1,210 miles from the Canadian oil sands to Steele City, Neb., where it would link to existing pipelines heading to Gulf Coast refineries. Solid opposition and protest from environmental groups has in recent years hindered construction of pipelines. In 2015, Trump’s predecessor declined to approve a construction permit for the Keystone XL pipeline. Trump made good on campaign promises to support the Keystone XL project and other fossil fuel pipelines, via executive orders and other policies, as I discussed inTrump Approves Keystone XL Pipeline, Making Good on Campaign Promise:

North Dakota industry leaders react to sponsor of Keystone pipeline terminating project – The Keystone XL pipeline was effectively shut down when President Joe Biden revoked the permit on his first day in office, but now the sponsor of the project, TC Energy, seems to have nailed the coffin shut by stepping away. Industry leaders worry the announcement may cost North Dakota. “It certainly just adds a cloud to all new pipeline projects, and certainly any international crossings between the US and Canada,” said Justin Kringstad, director of North Dakota Pipeline Authority. The Keystone XL pipeline was set to transport roughly 800,000 barrels of heavy crude oil a day through Canada to Nebraska but was not scheduled to pass through North Dakota. While industry leaders say they aren’t losing existing transportation capacity or planned capacity but say development in the future could be limited. “Your companies are going to lose that incentive or desire to invest or plan these projects just because they become so difficult to complete,” said Kristen Hamman, director of regulatory and public affairs for the North Dakota Petroleum Council. The other concern for industry leaders is what this means for the Dakota Access Pipeline. DAPL is still operating while the Army Corps of Engineers conduct an environmental review. Industry leaders say DAPL puts North Dakota in a good position, but in the long-term they may have to look to other options and rely more heavily on rail.

De Beers fine could exceed Pound Sterling100k for oil spill breaching environmental protection act — Global diamond mining company De Beers is facing a fine of at least CDN$100,000 (Pound Sterling58,000) for an oil spill that took place at its Snap Lake mine in Canada in 2017. The fine is under the Canadian Environmental Protection Act, and could total as much as CDN$200,000 (Pound Sterling116,000), depending on the outcome of a court hearing in Canada. Canada’s Cabin Radio reported that the case is the first instance of a company being charged under the act which was brought in late last year. De Beers published a spill report in December 2017 but initially underestimated the volume of the spillage, Cabin Radio revealed. While their initial report put the spillage at around 500 litres of diesel, the cleanup process put the number at almost 12 times that amount. The company will next appear in court in September.

Keystone XL is dead, but oil sands are waking up — Friday, June 11, 2021 —Climate activists celebrating the death of the Keystone XL pipeline might be in for a disappointment. While the high-profile project is not moving forward, the outlook for Canadian oil sands production is improving. Output of crude bitumen surged to record levels in December. Production has since tapered off slightly, but energy forecasters expect oil sands to scale new heights in 2021 and 2022. At the same time, two other pipeline projects with the potential to ship nearly 1 million barrels a day of oil are moving forward. The result is a split screen. Climate activists are celebrating a major political victory on one side, and companies are gradually scaling up production of Alberta’s emissions-intensive brand of oil are on the other. “Keystone is almost larger than life, and I don’t think it’s fair to say that level of attention or political heat and light can be sustained on enough projects to meaningfully move the needle on climate change,” said Andrew Leach, an environmental economist who tracks the oil sands at the University of Alberta. The dynamic illustrates the pipeline’s complex legacy. On the one hand, opposition to the pipeline and the type of oil it would ship reflects the growing climate consciousness of investors, governments and even oil companies. Majors like Royal Dutch Shell PLC, TotalEnergies SE and Equinor ASA have all divested their oil sands assets in recent years, partially to green their production portfolios and partially in an attempt to demonstrate a new commitment to financial discipline. The latter represents a response to investors’ growing calls for capital discipline, which has pushed companies away from expensive ventures like the oil sands, and toward less capital-intensive projects in America’s shale basins. But the oil sands are hardly dead. While the COVID-19 pandemic pummeled Canadian companies and drove capital expenditures on oil sands development to their lowest level since 2005, production has risen steadily since May of 2020. Balance sheets are improving. Shares in Suncor Energy Inc. and Canadian Natural Resources Ltd., two of the largest oil sands producers, have doubled since October. Two other pipeline projects, meanwhile, still hold the potential to carry more oil sands crude to market, though both face opposition. Construction began last year on the Trans Mountain pipeline, which would carry an additional 535,000 barrels a day from Alberta to the coast of British Columbia. Upgrades to Enbridge Inc.’s Line 3 would add another 390,000 barrels a day of capacity to a pipeline terminating in the U.S. Midwest. TPH estimates oil sands production will hit a record 3.2 million barrels a day this year, and rise to 3.25 million barrels a day in 2022. When Canadian regulators modeled the country’s evolving energy future last year, they concluded that oil sands production will peak in 2039.

Biden Admin Official Calls Nord Stream 2 Done Deal— Secretary of State Antony Blinken called completion of the Nord Stream 2 pipeline from Russia to Germany a “fait accompli” and said the U.S. is now working with Germany to limit how dependent Europe’s energy system will be on Russia after it is finished. “The physical completion of the pipeline was, I think, a fait accompli,” Blinken told the House Foreign Affairs Committee on Monday, saying that about 90% of the pipeline was completed during the Trump administration. “I think we have an opportunity to make something positive out of a bad hand that we inherited when we came into office.” Blinken said that sanctioning the chief executive officer of the project’s parent company, as opponents of the pipeline urged, would have led to a deterioration in U.S.-German relations. Now, he said, Germany has “come to the table” to try to prevent Russian President Vladimir Putin from using the pipeline to threaten Europe’s energy security. Representative Michael McCaul of Texas, the committee’s top Republican, said in a tweet as Blinken testified that “it’s unacceptable that our strategic partner #Ukraine found out about the shameful decision to waive critical #NordStream2 sanctions through the press & not the Biden Admin directly.” He said President Joe Biden should use “the mandatory authorities Congress provided to stop the pipeline” and that Biden should meet with Ukraine’s President Volodymyr Zelenskiy before his coming summit with Putin because allowing the pipeline to become operational “will render Ukraine more vulnerable to Russian aggression.” Jake Sullivan, Biden’s national security adviser, announced that the president had spoken with Zelenskiy on Monday and invited him to visit the White House this summer. Biden assured Zelenskiy during the call that in his meeting with Putin, “he will stand up firmly for Ukraine’s sovereignty, territorial integrity and aspirations.” More than 60 House Republicans sent a letter to Biden on Monday saying that completion of Nord Stream 2 “will be a gift to Putin and his efforts to increase geopolitical influence in Europe.” “Waiving sanctions for Nord Stream 2 ‘because it’s almost completely finished’ is the wrong message to our allies and partners and undermines our credibility and global leadership,” they said.

North Sea Oil Floating Off Europe Could Signal Weak Asian Demand -Around 6 million barrels of crude of North Sea’s key grades have been kept in tankers offshore Europe for up to three weeks, which could be a sign that demand in the world’s top oil importing region, Asia, could be softer than the paper market suggests, Bloomberg reported on Monday, citing ship tracking data it had compiled. Five oil tankers with 6 million barrels of North Sea crude are sitting off the shores of Europe, including two supertankers chartered by the world’s largest independent crude oil trader, Vitol Group, according to the data compiled by Bloomberg. Considering that the current crude oil futures structure is in backwardation, the state where the prices of the nearer futures contracts are higher than those further out in time, this sure isn’t an incentive for traders to keep oil in floating storage. Therefore, Bloomberg notes, the possible reason for tankers sitting loaded with North Sea crude off Europe could be a sign of weaker demand from Asia. Independent Chinese refiners, the so-called “teapots” and typically eager buyers of the Forties crude grade, have scaled down purchases in recent weeks, waiting for the government to issue its second batch of allowed crude oil import quotas for this year, according to Bloomberg. Another reason for potentially weaker demand for North Sea crude in Asia could be the low refining margins in the region amid a fuel glut, as the COVID resurgence have resulted in restrictions not only in India, but also in Malaysia. Rallying oil prices could also be a reason for price-sensitive buyers to stay away from purchases. In March this year, traders and market sources told Bloomberg that the rising premium of North Sea’s benchmark Brent over Dubai crude was making shipment of Brent-linked oil to Asia more expensive and likely to reduce in the coming months.

Sri Lanka sued over ship disaster as oil spill looms – Environmentalists yesterday sued the Sri Lankan government and operators of a container ship loaded with chemicals and plastic that burned offshore for almost two weeks, as international experts prepared to deal with a possible oil spill. The private Centre for Environment Justice (CEJ) petitioned the Supreme Court alleging that local authorities should have been able to prevent what they called the ”worst marine disaster” in Sri Lanka’s history. The Singapore-registered MV X-Press Pearl has been slowly sinking into the Indian Ocean since Wednesday after a fire that raged for 13 days within sight of the coast. Tonnes of microplastic granules from the ship have swamped an 80-km stretch of beach which has been declared off limits for residents. Fishing in the area was also banned. The CEJ said government inaction was ”against the concepts and principles of environmental law”. A hearing is yet to be fixed. It said the crew knew of an acid leak on May 11, long before entering Sri Lankan waters, and local authorities should not have allowed the vessel in. The legal challenge seeking unspecified damages came as foreign experts were deployed to help Sri Lanka contain a potential oil leak from the burnt-out wreckage. Representatives from the International Tankers Owners Pollution Federation (ITOPF) and Oil Spill Response (OSR) were onshore monitoring the ship, the operators of the vessel, X-Press Feeders, said. ”They continue to co-ordinate with MEPA (the Marine Environment Protection Authority) and the Sri Lankan navy on an established plan to deal with any possible spill of oil and other pollutants,” the Singaporean company said. Choppy seas and poor visibility prevented navy divers from checking the hull for a second day Friday, Sri Lanka navy spokesperson Indika de Silva told AFP. He said a team reached the sinking vessel and made a cursory inspection on Thursday, but could not carry out their mission because of poor visibility.

Data recovered as a ship sunk by chemicals off the coast of Sri Lanka. (AP)-Experts have recovered a data recorder for a ship carrying fire-damaged chemicals. Singapore-registered MV X-Press Pearl began to sink on Wednesday, the day after authorities extinguished the burning fire on board for 12 days. Attempts to tow the ship into the deep sea away from Colombo’s port failed after the stern was submerged and sank to the seabed. The Sri Lankan Port Authority said on Saturday that experts with the Navy had recovered the ship’s voyage data recorder (VDR, commonly known as a black box). Authorities said on their website that the VDR, which contains important information related to the operation of the vessel, will be handed over to local law enforcement agencies investigating the fire. Both authorities and ship operators say that the rear of the ship remains on the seabed at a depth of about 21 meters (70 feet), and the front continues to sink slowly. Operator X-Press Feeders said rescuers remained on the scene to address the potential spill. We apologize for the disaster. Port officials and operators said there were no signs of oil or chemical spills. They said the Sri Lankan Navy, Indian Coast Guard, rescue teams and local governments were able to respond to signs of oil pollution and debris and are monitoring the situation 24 hours a day. The fire destroyed most of the ship’s cargo, which contained 25 tons of nitric acid and other chemicals. However, chemicals left over from the fuel tank and hundreds of tons of oil can leak into the sea. Such disasters can devastate marine life and further pollute the island’s famous beaches. The disaster has already washed away debris containing tons of plastic pellets used to make plastic bags to the shore. The government has banned fishing on the coastline for about 80 kilometers (50 miles). According to officials, the ship is loaded with about 300 tonnes of oil, and experts believe it may have burned out in a fire. The Associated Press’s inventory of ships explains that X-Press Pearls carry just under 1,500 containers, 81 of which are described as “dangerous goods.” Environmentalists warn that dangerous goods, plastics, chemicals and oil can be released into the water and destroy marine ecosystems, which could be a “terrible environmental disaster.”

Sri Lanka still waiting for compensation over last year’s oil slick from MT New Diamond – Sri Lanka is yet to receive compensation amounting to over Rs 3.7 billion owed due to environmental damage caused by an oil slick that occurred due to the fire aboard the container vessel MT New Diamond, which caught fire off the Eastern coast of Sri Lanka in September last year. A final report on a technical assessment regarding the environmental damage caused by the disaster was handed over to the local insurer of MT New Diamond’s shipping company in April. The exhaustive report compiled by a team of experts took four months to complete and the damage was calculated at USD 19 million (Over Rs 3.76 billion), Marine Environment Protection Authority (MEPA) Chairperson Dharshani Lahandapura told the Sunday Times. The insurer has told MEPA that it needs time to study the report, Ms Lahandapura noted, adding that they were hopeful of a positive response soon. The Greek owners of the Panama flagged New Diamond was given a bill of Rs 442 million in costs incurred by various Government agencies when fighting the fire aboard the vessel. Legal action was also instituted against the ship’s captain after investigators found that his actions contributed to the incident. He was fined Rs 12 million after pleading guilty to the charges. The vessel was allowed to leave Sri Lankan waters only after both the Rs 442 million damage costs and the Rs 12 million fine were deposited, authorities stressed.

Container ship fire produces ecological catastrophe in Sri Lanka – In the second major container ship accident in Sri Lankan waters in the past year, the X-Press Pearl, which was awaiting entry to Colombo port, caught fire on May 20 after a chemical leak. All attempts to douse the fire failed and the ship sank about 10 nautical miles off the west coast of Sri Lanka, creating major problems for the environment, fisheries and the health of coastal communities. Fire damaged X-Press Pearl just before it sank (Credit: Sri Lankan Air Force) Last September, a super tanker – the MV Diamond – caught fire off Sri Lanka’s southeast coast. The blaze raged for days, discharging contaminated water and oil into the sea, before the ship was towed away. The two incidents demonstrate major safety failures in the global shipping industry and the criminal disregard of the corporations that dominate it, and national governments, for people’s lives and the marine environment. According to reports, the crew of X-Press Pearl, a Singapore-flagged ship, discovered nitric acid leaking from a container while the vessel was still in the Arabian Sea. They sought permission from Hamad Port in Qatar and Hariza Port in India to offload the problematic container. Both ports rejected the request, saying they lacked the capacity to handle the problem. The ship’s captain, now in Sri Lankan police custody, claims that Colombo port authorities were informed about the leaking container. Colombo Harbour Master Nirmal Silva said he did not receive any such information, until after the vessel caught fire. The leaking container had within it 25 tons of nitric acid and other flammable material. It is apparent that the port authorities and the Sri Lankan government were either unable to assess the risk on board or recklessly underestimated it. Port authorities and the Sri Lankan Navy spent two days trying to douse the fire with sea water and chemical powder during which 23 X-Press Pearl crew members, including two suffering injuries, were rescued. It was clear from the beginning, however, that Sri Lankan authorities had no capacity to deal with the disaster and international assistance took days to arrive. Several containers of small plastic pellets, called nurdles, broke open during the fire, spilling tons of nurdles into the sea and washing up along five kilometres of beaches and tidal areas along the country’s western coast. Thousands of dead fish, disfigured turtle and seabird carcases have been washed ashore, some with visible acid burn marks and nurdles in their respiratory and digestive tracts. The ship, which had over 1,400 containers on board, has now sunk, along with more than 6,000 tons of nurdles, 500 tons of fuel and lubricant and 6,000 tons of miscellaneous cargo. While photographs show murky plumes leaking from the sinking vessel, it is impossible to determine the exact chemical composition without thoroughgoing analysis.

International oil spill response team on standby in Sri Lanka – An international oil spill response team is remaining on standby in Sri Lanka in the event of an oil spill from the ship, MV X-Press Pearl. Oil Spill Response Limited (OSRL) said that it has been mobilised in Sri Lanka in response to the incident relating to the container ship, the MV X-Press Pearl. Meanwhile, the Voyage Data Recorder of the ship has been recovered by the Navy. The vessel is currently 10km offshore, approximately 12 km north of the capital city, Colombo. OSRL said that it is working closely with the International Tanker Owners Pollution Federation Ltd (ITOPF), and a team of response specialists. ITOPF has been mobilised to Sri Lanka to provide technical advice on the loss of chemicals, plastics and other cargo from the containership X-Press Pear. X-Press Pearl caught fire on Thursday 20th May whilst at Colombo anchorage, Sri Lanka, approximately 10km offshore. The vessel had travelled from the port of Hazira, India and was carrying 1,486 containers, including dangerous goods (nitric acid, methanol, sodium hydroxide and other chemicals) and nurdles (small plastic pellets). It is understood that approximately 320 m2 of low sulphur heavy fuel oil was also on board as bunkers. Despite the best efforts of salvors supported by the Sri Lankan Navy and Indian Coast Guard, attempts to control the fire were unsuccessful. All crew members were evacuated from the vessel. As the fire took hold and spread, the container stacks collapsed and multiple containers, as well as burning liquids and debris, had fallen overboard. Four containers had washed ashore, and many more had sunk. As at 2nd June, an estimated 150 km of shoreline is reported to have been impacted to varying degrees by assorted debris from the vessel.

Rig Remains Submerged After Incident – The Naga 7 rig remains submerged off the coast of Sarawak after an incident that took place on May 3, Velesto Energy revealed in its latest quarterly report, which was published last week. In the report, the company noted that the incident area was secured while the group works with insurance underwriters and the Protection & Indemnity (P&I) Club on “the way forward”. Velesto Energy said the rig and other related liabilities are adequately covered under the Hull & Machinery (H&M) insurance and the P&I Club, respectively. Progressing on the insurance claims, on May 31, Velesto Drilling Sdn. Bhd, as the insured under the H&M policy, issued a notice of abandonment of the submerged rig to the H&M insurers, pursuant to the H&M policy, Velesto Energy outlined. The company said it was currently awaiting its response. Velesto Energy did not immediately respond to an email from Rigzone asking when it expected to receive a response. In its latest quarterly report, Velesto Energy confirmed that the incident involving the Naga 7 rig occurred due to the penetration of one of its legs into a soil formation while jacking up at the Salam-3 well off the coast of Sarawak for ConocoPhillips Sarawak. The rig is said to have tilted and subsequently submerged at the location on May 4. All 101 personnel on board were safely transferred to shore and all the relevant authorities were duly informed, Velesto Energy confirmed. In its annual report posted on May 28, Velesto Energy highlighted that the Naga 7 incident location was being monitored for security and any potential adverse impact. The company’s president, Rohaizad Darus, referenced the incident in the annual filing. “While I am proud of the achievements in 2020, I wish to reference the unfortunate incident involving Naga 7 on 3 May 2021 causing the rig to be fully submerged,” he stated in the report. “We believe our HSE drills and preparation have contributed to the safety of our crew … The group is investigating the incident and evaluating recovery options,” he added.

Shocking ship collision in China produced a huge oil spill in the Yellow Sea – A tanker that transported around one million barrels of bitumen mixture collided with another boat while traversing a thick fog upon arriving at Qingdao port, in China. The incident led to a massive oil spill in the Yellow Sea, Chinese maritime officials and representatives of the vessels involved confirmed. The ship crash involving the tanker A Symphony with the Liberian flag and the bulk carrier Sea Justice occurred at 08.50. “The force of the impact on the forward port side caused a breach in the cargo tanks and ballast tanks, with an amount of oil being lost to the ocean,” said A Symphony executive Goodwood Ship Management, adding that the entire crew was counted and there were no injuries. // The story behind the man who saved 412 people on the bridge that holds the world record for suicides The extent of the spill was unclear so far, as operations to contain it were hampered by fog. “The oil spill occurred after a collision between two vessels,” said an official with China’s Shandong Maritime Security Administration, on condition of anonymity, confirming that no one was injured. “The dense fog, which has hampered navigation off the coast of Qingdao since yesterday, it caused low visibility at the time of the collision, “Goodwood said. In turn, he maintained that emergency procedures were put in place on board the vessel to limit any spill and the vessel’s oil spill response team was mobilized.

China Ban on Aussie LNG Should Have Limited Impact – Beijing in May verbally ordered several of its smaller liquefied natural gas (LNG) importers to no longer buy the super-cooled fuel from Australia for at least the rest of the year. The unofficial ban only extends to so-called second-tier LNG importers, not the country’s three state run oil and gas majors that account for nearly 90% of China’s LNG imports, according to a Bloomberg news report. These secondary buyers make up the remaining 10% of China’s LNG procurement and include both state-run and private companies that usually import cargoes utilizing terminals owned and operated by China’s three majors, or PipeChina. China’s unofficial LNG ban came just a week after the National Development and Reform Commission, its top economic planning agency, suspended all activities under the China-Australia Strategic Economic Dialogue. Beijing’s decision to pull out of the forum appears to be a tit-for-tat response to Canberra’s decision in April to end infrastructure agreements between the state government in Victoria and Beijing. These developments come amid a more than year-long diplomatic stand-off between the two sides that has seen Beijing increasingly target numerous Aussie imports, with both official and unofficial bans, including coal, barley, copper, wine, lobster, several meat products, and timber. Beijing initiated the import bans last year after Canberra’s insistence that a formal investigation be launched over the origins of the coronavirus, an implication that still angers Beijing. Until earlier this month, most analysts thought that Aussie LNG imports would remain untouched – and with good reason. Australian producers make up as much as 40% of China’s LNG imports, with the remainder of that supply divided between Qatar, the U.S., Russia, Malaysia, and others, according to China’s General Administration of Customs. In addition, China is in the midst of a major LNG infrastructure build-out that will help propel it to the top global LNG importer slot ahead of Japan as early as next year. Beijing also mandated that gas make up at least 10% of the country’s energy mix by 2020, 15% by 2030, with further earmarks after that. In light of its recent net-zero carbon emissions 2060 goal, gas as a percentage of its energy mix could increase even more. Moreover, it’s unlikely China will directly target Aussie LNG any further since it would involve violating long-term offtake agreements. To do so on a large scale would be unprecedented in global LNG markets, while also forcing Chinese buyers to scramble to replace that supply – at least over the mid-term.

IEA Says Oil Demand to Hit Pre-Virus Level in 2022– — Global oil demand will recover to pre-pandemic levels late next year, the International Energy Agency predicted, urging OPEC and its allies to keep markets balanced by tapping their plentiful spare production capacity. World consumption will once again reach 100 million barrels a day in the second half of 2022 as developed economies bring the virus under control, the agency said, in its first detailed outlook for the year ahead. At some point before the end of the year, demand will surpass pre-Covid levels, it said. The forecast counters speculation that oil use — and the resulting planet-warming emissions — may have already peaked as a result of social changes in the wake of the pandemic. The IEA itself sees consumption reaching a plateau in the 2030s, but hasn’t predicted a peak in demand. Oil prices have rebounded to a two-year high above $70 a barrel as motorists take to the roads and economic activity picks up with the easing of lockdowns. The report — which paints a slightly more bullish picture than the agency’s last outlook — underscores that the market’s next move is in the hands of Russia and Saudi Arabia. The Paris-based IEA made a direct plea to the OPEC+ alliance, which is led by those two countries, to continue restoring the output it cut when demand collapsed last year. “OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” said the agency, which advises most major economies. Satisfying demand growth is “unlikely to be a problem” if the 23-nation coalition acts because only a fifth of its spare capacity is needed to keep the market in balance, it said. IEA Executive Director Fatih Birol has warned of a further price surge if extra supplies aren’t forthcoming. However, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman has said he’ll wait until consumption is tangible before responding. Goal Achieved The Organization of Petroleum Exporting Countries and its partners have already achieved their primary market goal, having cleared the enormous inventory glut that amassed during the pandemic, the report showed. The group’s next step ought to be straightforward, according to the IEA. OPEC+ will need to add about 1.4 million barrels a day — or less if fellow member Iran clinches a deal to remove U.S. sanctions — leaving it with another 5.5 million a day off-line, according to IEA estimates. Bloomberg calculations suggest the buffer isn’t quite as generous. Tehran could add 1.4 million barrels of exports if it concludes a nuclear agreement with Washington that removes U.S. barriers on its oil trade, the IEA estimates — equivalent to the amount the entire OPEC+ coalition needs to add. The group will meet on July 1 to consider its next move.

Oil prices retreat as investors await Iran nuclear talks this week (Reuters) -Oil pulled back after hitting fresh multi-year highs on Monday, as investors awaited the outcome of this week’s talks between Iran and world powers over a nuclear deal that is expected to boost crude supplies. Brent crude futures for August fell 38 cents, or 0.5%, to $71.51 a barrel by 0519 GMT, after earlier hitting $72.27, their highest since May 2019. U.S. West Texas Intermediate crude for July touched $70 for the first time since October 2018 but reversed course to be at $69.32 a barrel, down 30 cents, or 0.4%. Investors may have sold off some contracts to take profit when WTI hit $70, “The primary concern is about Iranian barrels coming back into the market but I don’t think there will be a deal before the Iranian presidential election,” Data showing a 14.6% year-on-year drop in China’s crude oil imports in May also weighed on prices. Both contracts have risen for the past two weeks as fuel demand is rebounding in the United States and Europe after governments loosened COVID-19 restrictions ahead of summer travel. Global oil demand is expected to exceed supplies in the second half despite a gradual easing of supply cuts by OPEC+ producers, analysts say. A slowdown in talks between Iran and global powers in reviving a 2015 nuclear deal and a drop in U.S. rig count also supported oil prices. Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports. While the European Union envoy coordinating the negotiations had said he believed a deal would be struck at this week’s talks, other senior diplomats have said the most difficult decisions still lie ahead. Analysts expect Iran, which is having its presidential election on June 18, to increase its production by 500,000 to 1 million barrels per day once sanctions are lifted. In the United States, the number of oil and natural gas rigs operating fell for the first time in six weeks as growth in drilling slowed. This “suggests that U.S. oil drillers are less enthusiastic in adding more U.S. oil production and hence reduces the risk of a supply glut in the global oil market in H2 2021,”

Oil futures pulled back from two-year highs on Monday – Oil futures pulled back from two-year highs on Monday, pressured by the prospect of higher Iranian exports and lower Chinese demand. However, increased demand expectations for both Europe and the U.S. placed a floor under the market, as these locations commence the reopening process after COVID-19 lockdowns. While the demand side continues to drive this market, the Chinese trade data cooled things off a bit. July WTI slipped 39 cents, or 0.6%, to settle at $69.23 a barrel, while August Brent lost 40 cents, or 0.6%, to settle at $71.49 a barrel. July RBOB fell 1.84 cents, or 0.83%, to settle at $2.1931 a gallon, the largest one day dollar and percentage decline since Thursday, May 20, 2021 and the end to a four session winning streak. July heating oil shed 0.2%, to nearly $2.12 a gallon. Technical Analysis: WTI retreated from the psychological resistance level of $70, putting a temporary stop on the uptrend of this market. OPEC’s Secretary General, Mohammad Barkindo, said OPEC and its allies expect oil inventories to fall further in the coming months, suggesting efforts by the producers to support the market are succeeding. He said oil stocks in the developed world nations fell by 6.9 million barrels in April, 160 million barrels lower than the same time one year ago. He said OPEC+ compliance was 114% in April. According to BP’s Chief Executive Officer, Bernard Looney, the company sees a strong recovery in global crude demand and expects it to last for some time, with U.S. shale production being kept in check. Bank of America analysts said refining margins are expected to increase as oil demand recovers but added that abundant processing capacity will continue to weigh on the market, with more than 3 million bpd of planned additions during 2021-22. They stated that while they are bullish on refined product cracks from here, the upside is seen limited.

WTI crude closes above $70 for the first time since Oct. 2018 –Oil broke through a months-long trading range as expectations of tightening supplies in the U.S. compounded signs the world’s largest oil-consuming country is in the midst of a robust recovery. West Texas Intermediate futures surpassed the $70 mark to close at its highest since Oct. 2018 after briefly touching the key psychological level earlier this week. Investors focused on the health of the U.S. market ahead of inventory data on Wednesday. Confidence in the outlook for oil demand continues to grow as accelerating vaccinations allow people to travel more. The Middle Eastern Dubai benchmark is trading in its steepest backwardation — a market structure that indicates supply tightness — in almost a year after the region’s physical market had a strong start to the month. “We’re looking for a pretty sizable drawdown in U.S. crude oil inventories, while the demand thesis keeps improving,” said John Kilduff, a partner at Again Capital LLC. “This atmosphere remains bullish, as we’re heading into a structural deficit in terms of supply versus demand.” Crude’s advance from 2020’s collapse has stalled a handful of times this year, but prices have usually returned to an upward track as overall global demand keeps improving. The Covid-19 comeback in part of Asia and Latin America, however, is a reminder that the rebound will be bumpy. WTI for July delivery gained 82 cents to $70.05 a barrel in New York. Brent for August settlement rose 80 cents to $72.29 a barrel at 2:51 p.m. in New York. WTI’s discount against Brent is on the move again after surging to the narrowest since November last month. With the narrowness in the spread persisting, U.S. exports may see a dip as WTI loses competitiveness.

Light Crude Settles Above $70 a Barrel— Oil broke through a months-long trading range as expectations of tightening supplies in the U.S. compounded signs the world’s largest oil-consuming country is in the midst of a robust recovery. West Texas Intermediate futures surpassed the $70 mark to close at its highest since Oct. 2018 after briefly touching the key psychological level earlier this week. Investors focused on the health of the U.S. market ahead of inventory data on Wednesday. Confidence in the outlook for oil demand continues to grow as accelerating vaccinations allow people to travel more. The Middle Eastern Dubai benchmark is trading in its steepest backwardation — a market structure that indicates supply tightness — in almost a year after the region’s physical market had a strong start to the month. “There’s all sorts of technical models that work off closing prices,” “Any time you have a close above a number divisible by 5, it tends to be pretty significant” i Crude’s advance from 2020’s collapse has stalled a handful of times this year, but prices have usually returned to an upward track as overall global demand keeps improving. The Covid-19 comeback in part of Asia and Latin America, however, is a reminder that the rebound will be bumpy. “We’re looking for a pretty sizable drawdown in U.S. crude oil inventories, while the demand thesis keeps improving,” “This atmosphere remains bullish, as we’re heading into a structural deficit in terms of supply versus demand.” WTI for July delivery gained 82 cents to settle at $70.05 a barrel in New York. Brent for August settlement rose 73 cents to end the session at $72.22 a barrel. WTI’s discount against Brent is on the move again after surging to the narrowest since November last month. With the narrowness in the spread persisting, U.S. exports may see a dip as WTI loses competitiveness.

Oil Climbs As Blinken Says “Hundreds Of Sanctions” On Iran To Remain After earlier this week US Secretary of State Antony Blinken somewhat pessimistically portrayed that it remains “unclear” whether Iran is actually willing to restore the nuclear deal, prompting angry words from Foreign Minister Javad Zarif who again pointed out that it’s only Washington not in compliance due to Trump-era sanctions which the Biden White House refused to “bury” in order to make a renewed deal possible, Blinken’s newest statements are pouring more cold water on all the recent speculation that prematurely hailed a Vienna agreement as imminent. During a Tuesday hearing before a US Senate committee the US top diplomat was asked about his assessment of progress at Vienna, to which he frankly replied that hundreds of sanctions targeting Iran are likely to remain in place even if Iran and the United States return to compliance. “He said he would anticipate some sanctions would remain in place, including ones imposed by the Trump administration,” according to his words in RFE/RL.”If they are not inconsistent with the JCPOA, they will remain unless and until Iran’s behavior changes,” Blinken testified before the Senate Appropriations Committee.Lately the more enthusiastic and optimistic accounts of how things are going in Vienna have tended to come only from the Iranian side, as well as in some instances Russia. For example Iranian chief negotiator Abbas Araqchi indicated last week that this current round of talks could be “conclusive” and lead to a final agreement. Yet at the same time State Department spokesman Ned Price had said, “There are some hurdles that remain that we haven’t been able to overcome in those five rounds.” At sixth round is expected to start Thursday.Upon Blinken’s Tuesday comments, and with the Iran deal now looking more elusive, oil prices have continued to climb this week, after at the start of the month US crude futures had reached their highest in over two-and-a-half years after the OPEC+ alliance forecast a tightening global market, coupled with the increasingly cautious statements out of US negotiators in Vienna over reaching a deal.

WTI Dips After Big Builds In Gasoline, Distillates Inventories- Oil prices are holding yesterday’s gains this morning after US Secretary of State said that Iran will remain under significant sanctions, lowering traders’ odds of a sudden rush of supply back into the markets, although we note thatLibya’s oil output is picking up again after a pipeline leak that caused a brief reduction was fixed.“The widespread faith that oil demand growth will trend significantly higher in the second half of the year is paving the way forward for the price rally,” PVM analysts said.For now, the next leg may depend on if US production can remain disciplined as stocks of crude continue to slide. API

• Crude -2.108mm (-3.5mm exp)
• Cushing -420k
• Gasoline +2.405mm
• Distillates +3.752mm

DOE

• Crude -5.241mm (-2.9mm exp)
• Cushing +165k
• Gasoline +7.046mm
• Distillates +4.412mm

Crude stocks fell more than expected last week but product inventories rose significantly… Overall crude stocks are now below their 5-year average…The four-week rolling average on gasoline demand ticked lower for the first time in four weeks. That’s not a great sign for a week that included the U.S. Memorial Day holiday.US crude production remains rather notably flat (rebounding from the prior week’s maintenance drop) in the face of higher prices and rising rig counts…

Oil steadies amid weak summer kickoff for U.S. fuel demand — Oil prices were steady on Wednesday after U.S. inventory data showed a surge in gasoline inventories due to weak fuel demand following U.S. Memorial Day weekend, traditionally the beginning of the peak summer driving season. Brent crude futures remained unchanged to settle at $72.22 a barrel, having earlier touched $72.83, their highest since May 20, 2019. U.S. West Texas Intermediate (WTI) crude closed 9 cents, or 0.1%, lower at $69.96 a barrel, after reaching $70.62, its highest since Oct. 17, 2018. Despite a 5 million-barrel draw in crude oil last week, stocks of gasoline and other fuels rose sharply due to weak demand, according to Energy Information Administration data for the week that included the long Memorial Day holiday weekend. Product supplied fell to 17.7 million barrels per day, versus 19.1 million the week before. Other analysts noted, however, that the poor weather up and down the U.S. East Coast may have reduced consumption, following a period of gasoline hoarding that artificially boosted demand during the Colonial Pipeline outage last month from a ransomware attack. On Tuesday, the EIA forecast U.S. fuel consumption would grow by 1.48 million bpd this year, up from a previous forecast of 1.39 million bpd. Oil rallied earlier in the session on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded after the U.S. Secretary of State said sanctions against Tehran were unlikely to be lifted. Investors had assumed that sanctions against Iranian exports would be lifted and oil supply would increase this year as Iran’s talks with western powers on a nuclear deal progressed. However, U.S. Secretary of State Antony Blinken said on Tuesday that even if Iran and the United States returned to compliance with a nuclear deal, hundreds of U.S. sanctions on Tehran would remain in place.

Oil Prices Get Boost from Inflation Data — Oil rose to the highest settle in over two years, drawing support from higher-than-forecast U.S. inflation data and a strong demand outlook. Futures in New York rebounded from a plunge of as much as 1.8% earlier on Thursday that followed reporting of U.S. removing sanctions on a former Iranian oil official. Crude found support with U.S. consumer prices in May topping forecasts, extending a months-long buildup in inflation that is seen helping spur more interest in alternative assets like commodities to find yield. At the same time, oil’s market structure strengthened amid recovering demand and signs global supplies may be less than expected. “The outlook for oil demand is staying strong and getting stronger,” said John Kilduff, a partner at Again Capital LLC. Meanwhile, “there’s an inflation pulse rippling through the commodity sector, and crude oil is a big participant as a base hedge element against inflation.” Prices remain over 40% higher this year. Even as the Organization of Petroleum Exporting Countries expects the global demand recovery to gather steam in the second half of the year, the spare capacity buffer of the group and its allies have is seen being less than 80% than what it is on paper. OilX analysts also flagged “several signs” in their data that oil supplies worldwide are surprising to the downside, reflecting a combination of mature field declines and maintenance that was delayed into this year. The U.S. announced it deleted sanctions on a number of people, including former managing director of the National Iranian Oil Company. “I would not read too much into Treasury’s action today to remove sanctions against an Iranian oil official,” said Hagar Chemali, a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center. “The fact that no statement was made in connection with this de-listing is Treasury’s way of saying there isn’t much there there.” West Texas Intermediate for July delivery rose 33 cents to settle at $70.29 a barrel, the highest since October 2018. Brent for August settlement rose 30 cents to $72.52 a barrel, the highest since May 2019.

Traders eye $100 oil as EIA sees inventory drop – Investors have set their sights on $100 a barrel for oil as the US Energy Information Administration (EIA) forecast a decline in global oil inventories in the second half of 2021 in its June Short-Term Energy Outlook (STEO). Traders have scooped up call options tied to Brent and West Texas Intermediate crude-oil prices reaching $100 by the end of next year. Oil prices haven’t topped that milestone since 2014, when a gush of US crude depressed energy markets. The EIA now sees Brent spot prices averaging $65.19 per barrel this year, which marks a notable rise from the $62.26 per barrel average forecasted in the organisation’s previous STEO released in May. Looking at 2022, the EIA now projects that Brent spot prices will average $60.49, which is a slight decrease compared to the $60.74 per barrel forecast made in its May STEO. The EIA highlighted in its June STEO that Brent crude spot prices averaged $68 in May, which it noted was $4 up from April. Brent prices were said to be higher in May as global oil inventories continued to decline. “In the coming months, we expect that global oil production will increase to match rising levels of global oil consumption,” the EIA said in its latest STEO. Owners of $100 options are making a leveraged bet that oil prices will hurtle higher after already surging more than 40 per cent this year. The roaring rally, on the back of easing worldwide pandemic restrictions, has lifted WTI prices to their highest level since 2018 at almost $70, according to oil market analysts. “In the coming months, we expect that global oil production will increase to match rising levels of global oil consumption,” the EIA said. Both contracts touched multi-year highs on June 4 before settling lower. The ICE Brent contract last settled higher at $71.97 on May 20, 2019, while the NYMEX light sweet crude contract was last higher at $69.49 on July 19, 2018, S&P Global Platts data showed. Prices regained their upward momentum as the EIA’s STEO reinforced expectations of a demand-led recovery in the oil markets that would result in a drawdown of global oil inventories. “Brent crude has once again hit its two-year high, with sentiments potentially supported by the EIA’s June forecasts which reinforces the narrative of declining global oil inventories and a continued recovery in global oil consumption demand,” said Yeap Jun Rong, market strategist at IG, in a note. Global oil production is expected to match the rising levels of global oil consumption, with oil production increasing largely as a result of easing Opec+ production cuts, according to the STEO. “We expect rising production will end the persistent global oil inventory draws that have occurred for much of the past year and lead to relatively balanced global oil markets in the second half of 2021,” the EIA said in the report.

Oil Rises Yet Again As Bullish Demand Sentiment Skyrockets – Demand recovery due to the global success of the Covid vaccines was yet again the reason for oil price gains on Friday and the commodity reaching new multi-year highs. The trigger for Friday’s trading performance was the International Energy Agency in its monthly report stating that the Organization of the Petroleum Exporting Countries (OPEC) and allies would need to boost output to meet demand by the end of 2022, as all indications were the world would recover to pre-pandemic levels far sooner than expected. The Paris-based agency stated, “OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” adding that “In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target.” Also bolstering bullish sentiment was ANZ Research stating in a note that not only was road traffic returning to pre-Covid levels in North America and most of Europe, but “Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17 percent over the past two weeks, according to Eurocontrol,” Accordingly, Brent on Friday settled up 17 cents at $72.69 per barrel (for the week it was up 1 percent); West Texas Intermediate settled up 62 cents at $70.91 per barrel (it was up 1.9 percent on the week). Goldman Sachs contributed to the bullish mood on Friday by saying in a note, “Rising vaccination rates are leading to higher mobility in the U.S. and Europe, with global demand estimated up 1.5 million bpd in the last month to 96.5 million bpd.” K Yet another sign of a robust market: five sources with knowledge of the matter told media on Friday that Saudi Arabia will supply full volumes of July-loading crude to its Asia customers. And while it may be inevitable that the world is headed towards clean energy generation, Norway’s petroleum and energy minister on Friday presented the government a white paper outlining how the country will meet its energy needs and reach climate goals; but instead of following the IEA’s insistence that new oil, gas and coal fields need to be scrapped, the paper held firm on fossil fuels, noting that it will “facilitate a future-oriented Norwegian oil and gas industry capable of delivering production with low emissions within the framework of our climate policy.” Ship & Bunker N

Oil Prices Post Gains for the Week — Oil posted its third straight weekly rise on improving demand, with the International Energy Agency warning the market will need extra supply next year. Futures in New York rose 1.9% this week, extending its rally to the highest settle since October 2018. The IEA said that OPEC and its allies will need to lift output to keep the market adequately supplied, though the agency predicted demand won’t reach pre-virus levels until late 2022. Meanwhile, road traffic in the U.S. and much of Europe is largely back to levels seen before the pandemic. “With nothing budging on U.S. supply and OPEC+ keeping production restrained,” prices should continue to move higher.” Underlining the market’s strength, West Texas Intermediate’s nearest contract closed at its highest premium against the subsequent month since February. Firming in the so-called prompt spread reflects tightening supplies. While U.S. crude futures have held above the key $70-a-barrel level, traders are grappling with the prospects of Iranian supply returning to the market. Talks between the Persian Gulf nation and world powers about a 2015 nuclear deal are set to resume over the weekend. Meanwhile, there are also risks to the demand outlook in parts of Asia and Latin America as many nations continue to grapple with Covid-19 cases. Among the more prominent moves in the oil market this week, the discount of U.S. benchmark crude futures against its global counterpart rallied to the narrowest since November. That’s driven some buyers from abroad to start shying away from Permian crudes with the narrow arbitrage making West Texas oil cargoes less attractive. West Texas Intermediate for July delivery rose 62 cents to settle at $70.91 a barrel. Brent for August settlement advanced 17 cents to $72.69 a barrel, posting a 1.1% weekly gain. The IEA said OPEC+ will need to add about 1.4 million barrels a day — less if Iran clinches a deal to remove U.S. sanctions. That would leave the group with another 5.5 million barrels a day of capacity offline, it said, though Bloomberg calculations suggest the buffer isn’t quite as high. Separately, gasoline cracks in New York fell to the lowest since March on Friday. U.S. President Joe Biden’s administration is weighing options to give relief to U.S. oil refiners from biofuel blending mandates, Reuters reported.

IEA Tells OPEC To “Open The Taps” – Oil prices climbed on Friday as the IEA boosted optimism about global oil demand recovery. The U.S. Department of the Treasury said on Thursday it is removing several Iranian officials from its list of designated persons, including three directors of the National Iranian Oil Company (NIOC). Oil prices declined on the news. In early trading Friday, oil was back up, on positive economic news in the U.S. and accelerating global vaccination campaigns, according to Rystad Energy. But the firm warned that there is going to be rising pressure on OPEC+ to loosen production constraints in order to avoid the oil market overheating. The IEA said that global oil demand will rebound past pre-pandemic levels by the end of 2022. After declining by 8.6 mb/d in 2020, oil demand will rebound by 5.4 mb/d this year, and by another 3.1 mb/d next year. The agency reiterated that OPEC and its allies needed to “open the taps” to boost oil production and keep the world well supplied. Lordstown Motors, a SPAC aimed at manufacturing EV pickups out of an old GE plant in Ohio,disclosed that it does not have sufficient cash to start commercial production and issued a going concern warning through the end of the year. Lordstown was one of several EV SPACs that went public in the last year. The Interior Departmentsaid on Tuesday that it will examine potential areas of the Gulf of Mexico that are suitable for offshore wind. Rising costs for labor, freight, steel, and aluminum are pushing up the cost of solar power, ending more than a decade of steady cost declines, at least temporarily. Contract prices for solar were already up 15% in the United States in the first quarter compared with last year due to higher interconnection and permitting costs. There is uncertainty over how long the cost increase will last.

Fire And Explosion Hit Iran Steel Mill In Third Such Incident In Five Days -Saturday evening a large fire and a strong explosion rocked an Iranian steel mill in Zarand, Kerman Province, in the third such incident in less than a week. Officials said that after hours of battling the fire they were able to extinguish it without loss of human life. Local officials in Zarand reported late Saturday that a blaze and an explosion engulfed one of the furnaces. The director of Zarand Steel Mill said several people were injured but no was was killed. Three days earlier, an explosion and a fire in a refinery ten miles south of the capital Tehran became a spectacle to 9 million residents as it burned for 20 hours. No evacuations took place, and the government did not mention possible health hazards. Reports said that 20 storage tanks where waste fuel was kept completely burned. Another explosion followed by a fire sank Iran’s largest naval vessel in the Sea of Oman, near it shores, on June 2. The government has not issued any official report on the cause of any of the three incidents, as the Islamic Republic is gearing up to choose a president in 12 days. In all three incidents suspicion of sabotage, evident in social-media speculation, was inevitable with continuing Israeli threats against the Islamic Republic, following a series of spectacular attacks against high-value targets since July 2020 that are widely believed to have been the work of Israeli intelligence. Iran’s main uranium enrichment facility in Natanz experienced two catastrophic attacks in less than10 months, with explosions and fires destroying crucial enrichment machines and inflicting serious damage in July 2020 and April 2021. An interesting twist in the Zarand incident is a report by a local media outlet that said personnel were evacuated as the possibility of an explosion “was predicted hours earlier” and no one was present where the fire broke out. While this cannot be verified, an official of the steel mill said the reason for the incident will be investigated once the fire is completely extinguished. According to local sources the explosion was so strong that people in villages and surrounding regions of Zarand were jolted.

Zaid Jilani: Push to oust Netanyahu won’t intice change -Journalist Zaid Jilani says even if Israeli Prime Minister Benjamin Netanyahu is ousted from power, it is unlikely to spark meaningful change in the country. “I think in the United States based on the interests of people here [whoever is in charge] it does not really matter, they’ll want to maintain an ironclad relationship with the United States and basically the same policy visa vie Palestinians,” Jilani said. Last week, opposition parties in Israel confirmed they had reached an agreement that would establish a ruling coalition that would seek to replace Netanyahu, who has been in power in Israel for over a decade. “Its notable that [Naftali] Bennett who is expected to be the next prime minister, is very vocal that he doesn’t agree with the Palestinian state, he does not think its worth it for Israel,” Jilani said. “Whereas Netanyahu at least in the past suggested he would be open to it.”

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