Here are some more selected news articles for the week ending 26 June 2021. Go here for Oil, Gas, And Fracking News Read 27June 2021 – Part 1.
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Haaland: No plan ‘right now’ for permanent drill leasing ban — Interior Secretary Deb Haaland told lawmakers on Wednesday that there is not currently a plan to permanently ban new drilling leases on public lands and waters. Haaland, during a House Natural Resources Committee hearing, also reiterated that the administration’s assessment of oil and gas drilling on public lands and oceans would be released in “early summer.” “Gas and oil production will continue well into the future,” Haaland said. “I don’t think there is a plan right now for a permanent ban … but, as I said, the review will come out early summer, and we will assess the fossil fuel programs at that time.” “We want to make sure that American taxpayers are getting a good return on, essentially, their investment,” she also told the committee. When he was running for office, President Biden pledged to ban new drilling permits, which are typically granted on land that’s already leased to drillers, as part of his climate plan. However, since taking office, his administration has not said whether that will be its ultimate goal as it reviews federal oil and gas drilling. While it conducts its review, the Biden administration temporarily paused new oil and gas leasing. However, a federal judge recently placed an injunction on that pause, meaning the administration can’t keep it in place while the judge evaluates its legality. Haaland was also pressed on the department’s implementation of that decision. “Has anything changed within the department from when that judge issued a decision today?” asked Rep. Garret Graves (R-La.), specifically asking if the department had moved forward with a certain lease sale or published a Federal Register notice on it. “We’re reviewing the judge’s decision,” Haaland said, adding that the department hadn’t published any notices in the Federal Register. “It’s 44 pages,” Graves replied. “You have a whole legal team. You have a solicitor’s office. You have some very talented people, and it’s 44 pages. … I’m just trying to understand how things have changed.” Haaland replied that she’d get him a detailed answer.
Boom in Native American oil complicates Biden climate push (AP) – On oil well pads carved from the wheat fields around Lake Sakakawea, hundreds of pump jacks slowly bob to extract 100 million barrels of crude annually from a reservation shared by three Native American tribes. About half their 16,000 members live on the Fort Berthold Indian Reservation atop one of the biggest U.S. oil discoveries in decades, North Dakota’s Bakken shale formation. The drilling rush has brought the tribes unimagined wealth — more than $1.5 billion and counting — and they hope it will last another 20 to 25 years. The boom also propelled an almost tenfold spike in oil production from Native American lands since 2009, federal data shows, complicating efforts by President Joe Biden to curb carbon emissions. Burning of oil from tribal lands overseen by the U.S. government now produces greenhouse gases equivalent to about 12 million vehicles a year, according to an Associated Press analysis. But Biden exempted Native American lands from a suspension of new oil and gas leases on government-managed land in deference to tribes’ sovereign status.With tribal lands now producing more than 3% of U.S. oil and huge reserves untapped, Interior Secretary Deb Haaland – the first Native American to lead a U.S. cabinet-level agency – faces competing pressures to help a small number of tribes develop their fossil fuels while also addressing climate change that affects all Native communities. “We’re one of the few tribes that have elected to develop our energy resources. That’s our right,” tribal Chairman Mark Fox told AP at the opening of a Fort Berthold museum and cultural center built with oil revenue. “We can develop those resources and do it responsibly so our children and grandchildren for the next 100 years have somewhere to live.”
PUBLIC LANDS: Report: 32K abandoned wells surround 162 national park sites — Thursday, June 24, 2021 —More than a third of all National Park Service units sit within 30 miles of an orphaned oil or gas well – with nearly a dozen sites surrounded by 1,000 or more abandoned facilities, according to a new analysis.
Biden’s Silence on Minnesota Oil Pipeline Frustrates Advocates | Audubon –Joe Biden wasted no time canceling the highly controversial Keystone XL oil pipeline once he became president. On inauguration day, he revoked one of the project’s key federal permits, leading Keystone’s developer to cancel the project earlier this month. The new administration’s opposition to the pipeline and its subsequent cancellation made headlines around the world. But deep in Minnesota’s northwoods lies another massive pipeline project that’s been called a “doppelganger” of Keystone XL: Enbridge Energy’s Line 3 oil pipeline. Like Keystone XL, Line 3 would carrytoxic, carbon-intensive tar sands crude from Canada into the U.S., crossing more than 300 bodies of water – including the ecologically rich Mississippi River headwaters and thousands of acres of wild rice watersthat are a critical lifeway to several Native tribes. The entities behind the pair of pipelines are multi-billion-dollar Canadian companies headquartered in Calgary, Alberta. Both lines have faced years of resistance and protests by Indigineous and environmental activists. But despite reports of behind-the-scenes pressure, Biden hasn’t taken a public stance on Line 3 the way he did with XL, much to the chagrin of environmental advocates. “The silence from the Biden administration on Line 3 is conspicuous and disappointing and really shocking,” says Brett Benson, spokesperson for MN350, a Minnesota climate advocacy group. “When you consider every rational reason the administration had for canceling Keystone XL on the first day in office, that applies to Line 3 as well.”As president, Biden said he had canceled the pipeline because the oil it would carry would further the climate crisis, and the project didn’t align with his administration’s goals of developing a clean-energy economy for the United States. “The world must be put on a sustainable climate pathway to protect Americans and the domestic economy from harmful climate impacts,” his order read. Protests on the Line 3 construction sites have been constant since the U.S. Army Corps of Engineers approved the project’s final federal permit in the waning days of the Trump Administration. Construction began shortly after, in early December last year, and was immediately met with resistance. Activists have been fighting the project for years, especially since Minnesota state regulators first approved Line 3 in 2018.
‘We will not stop’: pipeline opponents ready for America’s biggest environmental fight – As the sun set, more than a dozen young people carried a wooden bridge toward a narrow section of the Mississippi River. The bridge allowed the group to cross more easily from their camp to where the immense oil pipeline was being built on the other side. They were cited for trespassing – but they had symbolically laid claim to the marshy landscape. That same day, Dawn Goodwin’s voice was soft but forceful as she spoke into the camera: “I’m calling on you, Joe Biden, to uphold our treaties, because they are the supreme law of the land.” Goodwin, an Ojibwe woman and environmental activist, was recording a livestream from a picturesque camp site amid northern Minnesota’s natural beauty – where she and dozens of others had come together to protest the construction of the Line 3 pipeline. Across the state, along the pipeline’s planned route of construction, activists have traveled from all over the country to do the same: many have locked themselves to construction equipment, and hundreds have been arrested. Goodwin’s preferred method of protest is arguably less physical – she was in the middle of leading a four-day prayer ceremony – but she hoped it would be no less effective to draw attention to the potential harm the pipeline represents.”We’re done messing around with the process and trusting that the process is going to work, because in the end, it failed us,” she said. “What am I trusting instead? The power of the people, and the creator.” The proposed Line 3 pipeline – which, if expanded, would move crude oil from Alberta in Canada through Minnesota to Wisconsin – has quickly become the biggest target of US environmental advocates. In addition to attracting protesters from around the country, it’s bringing attention to Biden’s unfulfilled promises so far on the climate crisis, as advocates argue he could step in to stop an expansion of fossil fuel infrastructure but hasn’t. The US already produces more oil than it can use, and is increasing exports of oil and natural gas, despite vowing to cut its own climate pollution. The ramp-up in protests in Minnesota comes on the heels of a major environment win, with developers canceling the Keystone XL pipeline – something Indigenous activists fought for about a decade. Now, advocates are framing Line 3 as the latest frontier in environmental justice, in part because of the risks it poses to the waterways Indigenous Americans rely on. “For all of the reasons that Keystone XL was shuttered and more, Line 3 needs to be stopped as well,” said Collin Rees, a senior campaigner for Oil Change International. “There’s an increasing understanding that we can’t continue to expand fossil fuels.” If the pipeline moves forward, Rees said, the Biden administration will be undermining its own authority at international climate negotiations. Other countries – including Denmark, Ireland, and Spain – are moving to ban future licenses for oil and gas drilling. The 52-year-old pipeline, operated by the Canadian energy company Enbridge, is being replaced because it is deteriorating. Two other Enbridge pipelines have experienced major spills. But the replacement line is on an entirely new route, one that crosses rivers, lakes and wetlands. “Because if there’s a spill, we don’t know what’s going to happen. We don’t fully understand the underground. We want to think we do but we don’t,” Goodwin said.
Line 3 foes worry increased pumping could threaten Minn. water To build the new Line 3 pipeline across northern Minnesota, the Enbridge Energy company needs to dig a trench – and temporarily pump groundwater out of the construction area, in a process called dewatering. Enbridge originally asked for permission to pump about 510 million gallons of water from the pipeline corridor, as it builds the replacement to the current Line 3 pipeline along a new, 340-mile route across northern Minnesota. But as construction moves forward, the company encountered more groundwater than it anticipated and requested to significantly increase the amount it’s authorized to pump, according to the Minnesota Department of Natural Resources. On June 4, the DNR issued an amended permit that allows Enbridge to pump up to nearly 5 billion gallons – almost 10 times more than the original amount the company had requested – for the remaining 145 miles of pipeline it has left to build. Opponents of the project worry that the pumping could reduce the overall quantity of groundwater and potentially affect sensitive wetlands, lakes and streams along the route, which are already under stress due to current drought conditions statewide. But the DNR says it has determined that the increase in dewatering would not threaten groundwater sustainability or have other harmful impacts on natural resources. The agency’s permit only allows Enbridge to pump shallow groundwater from the construction area, not from lakes or wetlands, said Randall Doneen, a senior DNR administrator who oversees ecological and water resources. The water is temporarily stored and treated, then discharged nearby, where it infiltrates back into the ground, he said. “Our assessment is that the actual pumping of it will have limited impact to the wetlands, streams and lakes and the shallow aquifer,” Doneen said. Dewatering to dig a trench Dewatering is required for construction projects like new roads, buildings or sewer lines that require digging a hole or trench, which tend to fill with water if they’re below a certain depth. “Everywhere that you go down into the ground, you eventually run into the water table,” explains Kelton Barr, a consulting hydrogeologist who’s worked on other dewatering projects in Minnesota, but is not involved in Line 3. “Below that point, the ground and all the pores in it are saturated with water,” Barr said. “And so, if your construction project needs to be doing things below that water table, then you have to do dewatering.”
Biden administration stands behind federal permits for Line 3 – President Joe Biden’s administration has signaled it has no intention of yanking federal permits for Enbridge’s controversial Line 3 pipeline – despite pleas to do so by environmental groups and two Indian bands.The U.S. Army Corps of Engineers continued defending the water permit it granted Enbridge in November in a federal court filing late Wednesday night. The permit was the last major approval the company needed to begin construction on its 340-mile pipeline across northern Minnesota.The filing marks the first time President Joe Biden’s administration has taken a positionon the $3 billion-plus Line 3, which will transport particularly thick oil from western Canada to Enbridge’s terminal in Superior, Wis. Several environmental organizations voiced their displeasure Thursday.”Allowing Line 3 to move forward is, at best, inconsistent with the bold promises on climate and environmental justice President Biden campaigned and was elected on,” said Michael Brune, executive director of the Sierra Club, in a press statement.Calgary-based Enbridge said in a statement that the Corps’ filing “is an expected next step in the court appeal process,” laying out the agency’s “very thorough review” of Line 3’s federal permits.Two Ojibwe bands and three environmental groups sued the Corps in U.S. District Court in Washington, D.C., late last year. They claimed the Corps did not properly evaluate the pipeline’s impact on climate change and that the agency should have conducted its own environmental impact statement (EIS) on the pipeline.Their lawsuit also alleges that the Corps failed to fully assess Line 3’s impacts on tribal treaty rights. While the new Line 3 would cross only one of seven Ojibwe reservations – Fond du Lac – it goes through lands where Native Americans have treaty rights to hunt, gather and fish.Earlier this year, the plaintiffs asked the court for a summary judgment, which would mean that all factual issues are decided and that the case need not be tried.On Wednesday, the Corps also asked for a summary judgment – but in its favor – countering plaintiffs’ allegations and saying it met all Line 3 permitting requirements under federal environmental law.The Corps permit allows Enbridge to drill beneath certain rivers during construction and to discharge dredged material into U.S. waters.”The Corps found that the large majority of wetland impacts from the construction of [the new] Line 3 will be temporary, and mitigation will be performed to compensate for the small amount of loss of aquatic resource function,” the filing said.
‘Horrible and Unconscionable Betrayal’: Biden DOJ Backs Trump Tar Sands Pipeline Approval –Indigenous and environmental activists fighting against the Line 3 tar sands pipeline were outraged Thursday after the Biden administration filed a legal brief backing the federal government’s 2020 approval of the project under former President Donald Trump.Critics of the project – which Canadian energy giant Enbridge has undertaken to replace an aging oil pipeline – blasted the U.S. Department of Justice’s late Wednesday filing as a betrayal of President Joe Biden’s pledges to address the climate emergency and respect tribal rights.”A White House that is serious about protecting communities needs to start by listening to communities when they say they don’t want an oil pipeline threatening their water and land,” said Janet Redman, Greenpeace USA climate campaign director. “Backing Enbridge’s Line 3 tar sands oil pipeline is a massive failure for a president that campaigned on tackling the climate crisis. And it’s a betrayal of what he promised the American people.” Benjamin Goloff, a campaigner at the Center for Biological Diversity, accused Biden of “siding with a handful of corrupt corporate elites over honoring treaty rights, climate, water, and the future of life on Earth.” “This is a racist pipeline project forced down the throats of our people, an ecological time bomb and a giveaway to a Canadian multinational oil interest,” said Winona LaDuke, executive director of the Indigenous environmental group Honor the Earth, in a statement Thursday.”If the president is genuine in his pledge to take climate justice and tribal rights seriously, his administration must stop defending the Trump administration’s decision and undertake a genuine analysis of Line 3’s environmental and human impacts,” she asserted. The route of Enbridge’s new, larger pipeline crosses Anishinaabe treaty lands. Native American and climate groups have challenged it with actions on the ground – which have sometimes halted construction – and lawsuits at the state and federal level.Those groups challenged the U.S. Army Corps of Engineers’ November 2020 decision to grant a key water permit and permission for specific work related to Line 3. They argue that the corps violated several federal laws – the National Environmental Policy Act (NEPA), Clean Water Act (CWA), the Rivers and Harbors Act (RHA), and Administrative Procedure Act (APA).
Line 3 contractor cited for serious safety lapse, fined $25,000 in worker’s death – The employer of a man who died in December working on Enbridge’s new Line 3 oil pipeline has been cited for a serious safety violation and fined $25,000. Construction worker Jorge Villafuerte III was killed when he was run over by a large forklift near Hill City on Dec. 18, a few weeks after Enbridge began building the $3 billion-plus pipeline across northern Minnesota. In May, the Minnesota Occupational Safety and Health Administration (MnOSHA) cited Eau Claire-based Precision Pipeline, a general contractor on the Line 3 project. Precision, which did not return requests for comment Tuesday, is contesting the citation. Under Minnesota law, companies with over 50 workers are hit with a minimum fine of $25,000 for a serious safety violation involving a fatality. MnOSHA contends Precision violated a rule calling for employers to ensure that industrial truck operators are “competent” to run their vehicles – “as demonstrated by the successful completion” of certain training and evaluations, records show. The day of his death, the 45-year-old Villafuerte was at a construction yard in the predawn hours, checking a list of materials while standing behind a “telehandler,” which is an industrial forklift, according to the Aitkin County Sheriff’s Office. As the forklift started backing up, Villafuerte was struck almost immediately by the rear passenger tire. Before the operator stopped the vehicle, “the machine’s tire had backed over the full length of his body,” the sheriff’s report said. The forklift driver told deputies that Villafuerte, who had been wearing a reflective vest, was in “a blind spot while he was operating the machine and that he never saw him.” Villafuerte, of Utah, was dead by the time emergency responders arrived. He left behind nine children.
Judge closes out Dakota Access lawsuit; future legal challenges still possible –e judge who for five years has presided over the Standing Rock Sioux Tribe’s fight against the Dakota Access Pipeline dismissed the case Tuesday but outlined a path for a future legal challenge to an ongoing environmental review, should the tribe seek to make one.U.S. District Judge James Boasberg issued a brief order indicating that if the tribe plans to challenge the outcome of the study, expected to conclude in March 2022, it must do so in the form of a new lawsuit that would be assigned to his court. He left open the possibility of reopening the case should any previous orders he made concerning the pipeline be violated.Boasberg answered the major lingering issues in the litigation in May when he ruled that the pipeline could keep operating. Standing Rock had asked him to issue an injunction forcing the line to stop pumping oil, but he concluded the tribe had failed to demonstrate a “likelihood of irreparable injury” from the line’s continued operation.That was a significant setback for the tribe, which last year secured a separate shutdown order from Boasberg only to have it overturned on appeal. The ruling eased the anxiety of many Bakken producers who send their oil to market through the 1,200-mile line, and it came as a relief to state officials who feared a decline in oil tax revenue and jobs if the pipeline were forced to shut down during the environmental review.Boasberg’s rulings over the years offered a mixed bag for both Standing Rock and pipeline supporters, including operator Energy Transfer and the U.S. Army Corps of Engineers, the agency tasked with permitting the line’s Missouri River crossing.In the end, an appeals court upheld significant parts of his more recent rulings requiring that the Corps complete a new study of the line, a process known as an Environmental Impact Statement. The court also affirmed that he was right to have revoked the pipeline’s easement for the line’s Missouri River crossing just upstream from the Standing Rock Reservation, where tribal members are concerned about a potential oil leak. Energy Transfer has said it plans to appeal those decisions to the U.S. Supreme Court, but it has not yet done so.
Coast Guard yet to acknowledge video of ‘giant’ oily slick off San Clemente Island – U.S. Coast Guard officials in San Diego have yet to acknowledge a potentially large fuel spill off San Clemente Island reported Saturday by the captain of a whale-watching boat.Domenic Biagini, owner of Gone Whale Watching San Diego, said he’d taken half a dozen passengers out near the island on Saturday when they spotted an oily sheen covering the ocean. He said they found the slick about 12 nautical miles south of the island, tracking the pollution all the way past an area known as Butterfly Bank.”When I say giant, it was a minimum of 50 miles,” Biagini said. “We had 90 minutes of having to wrap our faces in sweatshirts because it was so toxic to breathe the air around us.”Coast Guard Sector San Diego did not respond on Tuesday to questions about the reported slick near San Clemente Island, located about 70 miles offshore.Biagini said he was surprised to find no immediate reports of the pollution. So, on Sunday, he posted to social media drone footage of dolphins swimming through the oily slick. “I went home thinking I was going to find a ton of information on this, and I was just flabbergasted to see nothing,” he said.
Coast Guard: Diesel fuel slick at least 3 miles long off San Diego coast – Video shows dolphins swimming through fuel slick in what might be a second spill further off the coast – A spill of at least 100 gallons of diesel fuel discovered Saturday about 10 nautical miles southwest of Point Loma is unrecoverable and will dissipate, the U.S. Coast Guard said Sunday. The spilled fuel created a slick about three miles long, said Petty Officer 3rd Class Alex Gray, a spokesman for the Coast Guard Sector San Diego. The Coast Guard on Sunday was not aware of who was responsible for the spill or when the fuel was spilled into the ocean. A Coast Guard helicopter flew over the area between noon and 1 p.m. Saturday after getting reports that a slick had been seen, Gray said. Two Navy officials told the Union-Tribune Sunday the service was unaware of any spills involving U.S. Navy vessels. On Saturday, a San Diego-based whale sightseeing tour operator shared on his popular Instagram account a video of dolphins swimming through what he described as an oil slick. According to the post on Dominic Biagini’s “dolphindronedom” account, a whale watching ship encountered a 50-mile-long oil slick near San Clemente Island, some 70 miles from San Diego – a significant distance from where the Coast Guard said it spotted fuel in the water.
Coast Guard, Navy pointing fingers over reported fuel spill near San Clemente Island – – Both the U.S. Coast Guard and U.S. Navy said Tuesday they were not responsible for investigating reports of a fuel spill off the coast of San Clemente Island.Domenic Biagini is the captain and owner of Gone Whale Watching. In video recorded on his phone, you can hear the disgust in Biagini’s voice as he and his crew discover dolphins swimming through diesel.”They were just, you know, stuck swimming through fuel and it was really hard to watch. They were not acting normal,” Biagini said.Biagini tells Eyewitness News they spotted it Saturday, 65 miles off the coast of San Diego, near San Clemente Island, which is owned and operated by the Navy.Biagini pulled his drone out to record, in hopes of finding the end. He estimates the slick was about 50 miles long. “We could not see the end of this slick for the life of us once we got into it,” Biagini said. “So, we immediately called the Coast Guard on the VHF channel 16 which is what we’re supposed to do.”The Coast Guard tells Eyewitness News the Navy is responsible for investigating and that the Navy reported to the USCG they were in the area and did not see a sheen.After the story aired on Eyewitness News Tuesday afternoon, two Navy spokespeople answered our questions – one over the phone, the other via email.The Navy told Eyewitness News the USCG is responsible for investigating spills and that the Navy is not investigating this matter. When asked whether the Navy was behind this spill, we were told the Navy has no reports of a spill.Biagini said he saw Navy boats out there and doesn’t see how anyone could have missed it.”I mean, we couldn’t breathe. It was like the fumes were so toxic. It was such a dense area,” Biagini said.Veterinarian Dr. Michael Ziccardi said staff with the Oiled Wildlife Care Network, managed by UC Davis, saw Biagini’s video on social media and was monitoring in case any wildlife were in need of help.According to Ziccardi, those dolphins seen in the video swimming through fuel could have medical issues as a result. Can have effect on the eyes or some of the sensitive tissues and then also respirator damage at least we’ve seen that in birds,” Ziccardi said.
AVTEC receives $40,000 grant from Marathon Petroleum – Alaska Vocational Technical Center received a $40,000 grant from the Marathon Petroleum Foundation to purchase an oil spill response module. The simulation will be incorporated at the Kongsberg Full Mission Bridge Simulator at AVTEC’s First Lake Campus. “We couldn’t be more excited about this new training opportunity for mariners across Alaska,” said Steve Fink, AVTEC’s lead simulation technician and operator. “Marathon Petroleum has been a great partner for many years, and we are truly appreciative of their continued investment in our facility, marine pilot training and water safety.” The oil spill response module allows small fleets of oil response vessels to plan and execute oil cleanup on the scene of a simulated oil spill. Highly detailed virtual pools of oil on the water’s surface can be contained with booms and then recovered with skimmers attached to virtual response vessels. All equipment is modeled from real-world equipment and simulated in a 3D environment using AVTEC’s state-of-the-art bridge simulation system. The oil response module is in the process of configuration and should be available to students for the upcoming fall semester. Alaska Maritime Training Center is a department at AVTEC and funded by The Alaska Department of Labor. AMTC is leading school in Alaska for mariners to be trained at any level of their profession including able seaman, deck officers, and engineering department crew.
St. Croix Refinery That Rained Oil on Homes Shuts Down ‘Indefinitely’ – The Limetree Bay refinery that rained oil on St. Croix neighborhoods will remain shut down “indefinitely,” its private equity owners said Monday. The U.S. Environmental Protection Agency (EPA) shut down the refinery in May for 60 days after it spewed oil onto nearby predominantly Black and Latino neighborhoods twice since reopening in February. The noxious pollution sent residents to emergency rooms and locals worry their drinking water is now laced with the oil that fell from the sky. The Virgin Islands Good Food Coalition is conducting a survey of the refinery’s health and environmental impacts along with two Bennington College professors (one of whom is a former EPA official who monitored the plant). VIGFC Executive Director Sommer Sibilly-Brown said she worried for those who will lose their jobs, as well as those harmed by the pollution. “We are a community of black and brown people who have been historically burdened by the effects of the refinery and left with the aging facility, undocumented health impacts, and no remediation to environmental impacts caused by refining,” she told The Washington Post. As reported by CNN: In preparation for the extended shutdown, the refinery said it will start “safely purging gases from all of the units and removing any residual oil and products in the lines.”Dyline Thomas, a 58-year-old resident on the island, said she discovered oil in her yard in mid-May. And just two days earlier, a flare incident occurred at the Limetree Bay refinery upwind of her home. As flames and smoke billowed out of the flare stack, oil droplets were launched into the sky and carried by the wind, raining down on nearby homes.
Limetree Bay refinery in St. Croix says it will stay shut indefinitely due to ‘extreme financial constraints’ – The Washington Post –Limetree Bay, a massive oil refinery in the Caribbean, announced Monday that it is ceasing operations following a number of catastrophic errors that rained oil droplets on St. Croix, sent residents to emergency rooms after noxious gas releases and raised fears among homeowners that their drinking water was laced with toxic chemicals.The plant, which had closed a decade ago under a previous owner after toxic spills helped push it into bankruptcy, was plagued with problems from the start after the Trump administration granted it permission to reopen in February.”Limetree had a very high rate of environmental violations over a very short period of time,” said Judith Enck, a former Environmental Protection Agency official who monitored the plant under the Obama administration. “It was an environmental catastrophe unfolding in real time.”The refinery’s pollution impacts on Black and Brown people in communities that surround it quickly emerged as a priority under President Biden, who made environmental justice a major focus of his climate agenda. In May, the EPA ordered the refinery to suspend operations for 60 days as it weighed whether it had become “an imminent threat” to people’s health.Now the island stands as a critical test for the president, who has promised to devote 40 percent of federal spending on the environment to disadvantaged communities. Even as many residents welcomed the plant’s closure Monday, they questioned how the territory would recover from the harm it has already caused.Monday’s announcement suggests that the refinery, which now owes tens of millions of dollars to contractors and faces multiple class-action lawsuits from residents, might never restart. The company, which will continue to operate an adjoining oil export terminal, told all 271 refinery employees that they will be terminated as of Sept. 19. On Friday, many of the remaining contractors were sent home. On Monday, contractors moved some of their equipment outside of the plant’s fence line.
Insurance Giants Under Fire from First Nations for Backing Trans Mountain Tar Sands Pipeline -Indigenous peoples in Canada and a coalition of environmental groups launched a “Global Week of Action” for June 14-21, aimed at pressuring an array of insurance companies to cut ties with a long-distance tar sands pipeline under construction in Canada.On Wednesday, the Braided Warriors, an Indigenous youth group in British Columbia, held a rallyin front of Chubb Insurance Canada in Vancouver, B.C. On Friday, activists in London are set toprotest outside Lloyd’s of London – one of the world’s largest insurers of fossil fuels. Other acts of solidarity are planned as far away as the Pacific Islands and Sierra Leone. The Indigenous and environmental groups are targeting the handful of global insurance companies that provide coverage for the Trans Mountain pipeline system, a long-distance pipeline running from Alberta’s tar sands to the Pacific Coast near Vancouver.The original pipeline has been operating for decades, but Canada is building what has been termed a “twin” pipeline that would nearly triple the capacity of the existing system to 890,000 barrels of oil per day. For years the Trans Mountain Expansion struggled to get off the ground. It met intense resistance from multiple First Nations in British Columbia, and as it became ensnared in legal limbo, it grew into a financial boondoggle.The former owner Kinder Morgan sought to bail on the project, and instead of letting it die, Prime Minister Justin Trudeau bought the system in 2018 for C$4.5 billion, effectively nationalizing it to keep it alive and push it forward.Since then, the Trans Mountain Expansion has broken ground, felling trees and digging trenches along part of its 700-mile route. At the start of 2021, the project was roughly 22 percentcompleted, and despite the ballooning cost, is scheduled to come online at the end of 2022. “The Trans Mountain pipeline and tanker project is an existential threat to Tsleil-Waututh Nation. It also fuels the climate crisis, which is a threat to us all. This is why Tsleil-Waututh Nation does not grant our Free, Prior, Informed Consent, and why we are calling on all insurance companies to drop Trans Mountain and recognize the violation of Indigenous rights as a material risk,” Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative, said in a statement. The Tsleil-Waututh Nation has lived on the Burrard Inlet in what is now Vancouver for millennia. The expanded pipeline system is estimated to result in a sevenfold increase in oil tanker traffic in the inlet. That would boost the number of tankers navigating the island-studded waters leading to the pipeline’s terminal from 60 per year currently to over 400 per year. A technical assessmentconducted by the Tsleil-Waututh Nation found that there is a 79 to 87 percent likelihood of an oil spill in the inlet over a 50-year period. But completion is not inevitable, and First Nations and environmental groups opposed to the project see the insurance industry as a key point of leverage. Without insurance, the pipeline cannot proceed. DeSmog previously reported on the effort by First Nations and environmental groups to pressure global insurance companies to sever their ties with Trans Mountain, among other acts of resistance.
Gas Shortfall Sets Up Desperate Scenario — Natural gas markets around the globe are rallying as the world’s importers have come to a stark realization: there isn’t enough supply to go around. A long, frigid winter drained gas stockpiles from Louisiana to Germany, and utilities are struggling to build them back up. But unforeseen supply disruptions and a rebounding global economy are making it impossible to keep up. That’s setting up a desperate scenario as hot summer temperatures approach, and it’s bound to get even worse when demand peaks this winter. Higher gas prices will make it more costly to keep the lights on in Madrid or cool apartments in Tokyo, after scorching heat waves in some regions are already making it more expensive to run air conditioners. The cleaner-burning fuel is the latest commodity to add to the global inflation scare as the price of everything from crude oil to corn and copper surge. If a gas deficit does develop during the winter months, it could spur European utilities to burn more coal, which has already started happening, and cause China’s power producers to curtail supplies to industries and cause blackouts like it did last winter. Households are set to pay sky-high utility bills and the worst-case scenario — albeit unlikely — is they won’t have heating or electricity when freezing temperatures hit. “Supplies are already very tight, and that could get much worse if there is a cold winter,” said James Whistler, the global head of energy derivatives at Simpson Spence Young, an international commodity and ship broker. “We are seeing strong competition between Europe and Asia, and that is manifesting in the continuous rally.” European gas inventories are the lowest in more than a decade for this time of year, with the region’s benchmark surging to the highest in almost 13 years, while rates in the U.S. and Asia have jumped to the highest seasonal level in years. The gas sector had long been segmented between geographical regions, but the ramp-up in new supply of liquefied natural gas and growing liquidity in spot trading over the past several years has helped transform it into a genuinely global market. That evolution comes at a price, as Europe and North Asia now compete for a finite supply of LNG, which results in bidding wars that catapult spot rates. At the center of the action is China, which in a surprise move is set to overtake Japan as the world’s top LNG importer for the first time this year. China is stockpiling supplies of the super-chilled fuel in order to power its booming economy and help it shift away from dirtier fossil fuels. “China’s LNG demand in the past years keeps outperforming even the most bullish analysts,” The mad dash is putting Europe at a major disadvantage, as Asian end-users increase prices to attract supplies away from the Atlantic. Europe — where spot prices have rallied by more than 65% this year — is facing thin gas inventories amid lower flows from pipeline suppliers and near record carbon prices. Europe’s end-users have been forced to depend more on Russian pipeline supplies. Yet Gazprom PJSC’s unwillingness to ship extra gas via Ukraine has been one of the key factors that has catapulted prices at the Dutch Title Transfer Facility, the spot benchmark for Europe, to the highest level since 2008. “I don’t see a catalyst in the short term that would bring down prices.” Indeed, the situation is made worse by the energy demands caused by extreme weather — from last winter’s bitter cold in Asia to the current heat waves in the Western U.S. and severe droughts across the globe that have curbed hydro output. With fresh memories of record-high Asian spot LNG prices last winter, the world’s top importers in China, Japan, South Korea and Taiwan have been busy buying shipments for delivery between November and February, well ahead of normal, according to traders surveyed by Bloomberg. China’s importers were scolded by the government for not being well prepared last winter and they don’t want to make the same mistake twice, traders said.
It’s Too Late To Avoid A Major Oil Supply Crisis | OilPrice.com – There are a number of observable trends in oil supplies and by extension prices, presently. I am going to discuss one of them in this article. A lack of capital investment in finding new supplies of oil and gas. A favorite analogy of mine comes to mind, the ship is nearing the dock. In nautical parlance that means the time for course corrections is at an end. So we shall see if that is the case for oil. The massive “ship” that is world oil demand is on an unalterable collision with supplies that will have profound implications for consumers. This key metric reveals what the future is likely to hold for our energy security as the world continues to recover from the virus to those who will listen. The level of drilling and by extension capital investment is insufficient and has been for a number of years to sustain oil production at current levels. It’s no secret that even with the lower break-even costs for new projects thanks to cost-cutting by the industry the last few years, oil extraction is a capital-intensive business. The chart below from WoodMac, an energy consultancy, shows just how severe the decline in capex has been. The message to oil and gas companies has been pretty clear from the market, investment funds like Blackrock seeking green “purity” in the allocation of financing of new energy sources, and government edicts mandating carbon intensity reduction across the entire swath of society, and a transformation to renewable energy, that new supplies of oil and gas are not wanted. These companies seem to have gotten the message, loud and clear. The super-major cohort formed by Shell, ExxonMobil, BP, TotalEnergies, all prime targets of the anti-oil movement, have reduced their capital allocation toward petroleum, exited businesses or converted petroleum assets like refineries to renewables, and sold assets that a few years ago might have contributed to oil and gas inventories. Just a couple of weeks ago, Shell was told to speed up its decarbonization by a Dutch court, and just this week the company took steps in that direction. Shell’s decision to exit its Permian shale position is monumental and will change the character of the company over time. We will have further discussion on this in the future. There is going to be less oil produced in the future. That comment might not seem too prophetic given the points we’ve covered so far. The fact is there is kind of a disconnect in people’s minds about the easy availability of energy and the factors that produce it. Soon the result of this key factor, a lack of new drilling will become apparent, and people will wonder where all the easy and cheap energy went.
Vessel Owners Scoping Out Technology to Cut CO2 Emissions as Decarbonization Rules Loom – An international regulatory body is set to finalize decarbonization guidelines for about 50,000 commercial vessels across the world later this month, but liquefied natural gas (LNG) ship owners are not waiting to upgrade their fleets. LNG carrier owners are already searching for ways to comply with the coming International Maritime Organization (IMO) decarbonization rules, which take effect in 2023. The IMO’s decarbonization strategy requires a 40% reduction over 2008 levels in carbon dioxide (CO2) emissions from the shipping industry by 2030 and a 70% reduction in 2050. Finnish technology group Wartsilla Corp., a major supplier of equipment for LNG carriers, has seen an “exponential increase” in customer inquiries about compliance with the rules, said the company’s Stefano Mori, general manager of marine power. IMO’s rules being finalized would establish two indexes. The Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Index (CII) would provide shipowners with a baseline to reduce their emissions levels. “The first issue and concern is compliance,” Mori said. “Since IMO targets can be reached in many different ways, we are often consulted to run tailor-made specific analyses to identify the most optimal and cost effective solution.” In particular, Wartsilla’s greenhouse gas (GHG) emissions reductions package, which includes software upgrading and engine tuning, has gained “major market traction” for retrofits and newbuilds since its introduction last year. Wartsilla said the package can cut GHG emissions from individual vessels by 20%.
German containership leaks oil off India after fuel tank cracks – A German-owned containership has leaked oil off India after developing a crack in a fuel tank. The 1,118-teu Devon (built 2008), operated by TB Marine Shipmanagement of Hamburg, was en route from Colombo in Sri Lanka to Haldia in north-eastern India. The Indian Coast Guard (ICG) said 10 kilolitres of oil, equivalent to 8.5 tonnes, were spilled into the Bay of Bengal. According to the coast guard, the Portugal-flag ship developed an underwater crack in the port fuel tank, which contained about 120 kilolitres of very low-sulphur fuel oil. “The crack resulted in spillage of about 10 kilolitres of oil into sea before preventive action was taken and remaining oil in tank was transferred to another tank by ship’s crew,” it added. The ship was continuing its voyage to Haldia, where it was likely to dock on Friday evening. “The ICG is in continuous contact with Devon and master has reported that the vessel is stable,” the ICG said. The coast guard pollution response team at Chennai was alerted and kept on stand-by. ICG ships and aircraft at sea were also put on alert in a pollution response configuration, and the situation is being monitored by the Ministry of Defence. TB Marine has been contacted for further information. The last AIS update for the Devon shows it at Colombo on 15 June. It has a clean port control record going back to its delivery. The ship, one of five container vessels in the TB Marine fleet, has insurance through the Swedish Club. The German operator also controls nine product tankers.
Indian coast guard on alert after oil spill from Haldia-bound Portuguese ship – Indian Coast Guard is on alert as an oil spill from the Haldia-bound Portuguese flag container ship was reported on June 16 about 450 km southeast of Chennai, the Ministry of Defence reported on Friday. The investigation has revealed that a Portuguese flag container ship MV Devon, on passage from Colombo to Haldia, West Bengal, developed an underwater crack in the fuel tank containing about 120 KL of very low sulphur fuel oil, resulting in spillage of about 10 KL, before any preventive action was taken, the ministry added. The remaining oil in the tank was transferred to another tank by the ship’s crew, the ministry reported. Manned by a crew of 17, the vessel is carrying 10,795 tonnes of general cargo in 382 containers. The ship continued its voyage to Haldia and is likely to reach today. “The ICG is in continuous contact with MV Devon and the master has reported that the vessel is stable. ICG pollution response team at Chennai has been alerted and kept on standby. In addition, ICG ships and aircraft deployed at sea are also put on alert in pollution response configuration,” the ministry said.
Taiwans CPC cleaning up oil leak near Talin refinery (Reuters) – Taiwan’s state-owned refiner CPC Corp has started cleaning up an offshore oil spill caused by a pipeline that cracked during the discharging of oil from a vessel at its Talin refinery, the company’s spokesman said on Wednesday. The oil leak occurred on Tuesday at 2:18 a.m. (1818 GMT) and was likely caused by bad weather, the company said in a statement. CPC immediately halted oil discharge following the incident, it added. The incident will not affect the refinery’s operations and fuel supply as inventories were high while domestic consumption fell 20% to 30% over the recent months from usual levels, CPC spokesman Chang Ray-chung told Reuters by phone. “Due to the coronavirus, people stay indoors,” Chang said, adding that sales at CPC’s fuel stations are lower compared with the same period last year. “We will stick to our existing production plans and there will be no issue with the supply,” he said. The Talin refinery can process 400,000 barrels per day of crude oil. While waiting for weather to improve before carrying out repairs at the crude pipeline, CPC will rely on other discharge points for crude which are still functioning, Chang said. The oil spill clean-up is expected to finish by Wednesday night, he said.
Inpex dealing with domestic oilfield spill into local river — Japanese oil and gas company Inpex has reported an oil leak from a flowline at its domestic Akita oilfield in Akita prefecture. Inpex said the leak started on 20 June at 5:40 am local time. All production wells using the flowline were shut down by 6:05 am and the leak was confirmed to be contained at 7:45 am on the same day. The presence of leaked oil was confirmed in the vicinity of the flowline as well as in the Kusouzu River, a Class A river. Measures including retrieving the leaked oil and setting up an oil fence in the river are being implemented, while the source of the leak has been determined and remedy measures are being put in place. Inpex said it has set up a crisis response team locally and is gathering information while engaging with stakeholders under the guidance of local authorities. “The company conveys its profound regret for the inconvenience caused by this incident to all stakeholders.”
BP Gas Project Threatens Unique African Biodiversity Hotspot – A BP fossil-fuel project could threaten a unique biodiversity hotspot and worsen the climate crisis, a new investigation from Unearthed and SourceMaterial has found.Despite pledges to improve its environmental record, the company behind the Deepwater Horizon oil spilldisaster is planning to dig the deepest natural gas field to date in Africa, right beside what experts believe is the largest coldwater coral reef in the world.”We can’t excuse a company like BP, at a time when it seems to be taking climate change more seriously, simultaneously bankrolling a project that may end up having a big impact on Africa’s carbon footprint and future,” Mohamed Adow, director of the think tank Power Shift Africa, told The Independent of the project.The project, officially called the Greater Tortue Ahmeyim (GTA), will be a natural gas field 2.7 kilometers (approximately 1.7 miles) beneath the ocean surface, according to Unearthed. It will be located off the coast of Senegal and Mauritania, and BP has promoted it as an opportunity for growth in the region, calling it “the first step in establishing the basin as a world-class gas province,” according to Unearthed.Construction has already begun, and it has been approved through 20 years by the governments of Senegal and Mauritania. The first gas from the field is expected within two years.However, BP’s promises for the future of gas in the region stand in contrast to its stated goals for limiting carbon pollution. The company has pledged to achieve net zero emissions by 2050. But a major study from the International Energy Agency said there could be no new investments in fossil fuel projects if the world wanted to meet a 2050 net-zero emissions target.The GTA project, though, would be just the beginning of a plan to produce around 40 trillion cubic feet of gas from the region in the next 30 years, according to Rystad Energy figures reported by The Independent. This would burn the equivalent of 2.2 billion tonnes (approximately 2.4 billion U.S. tons) of carbon dioxide. This is almost double the current yearly emissions for all of Africa and about 0.3 to one percent of the carbon that can still be burned if we want to limit warming to 1.5 degrees Celsius above pre-industrial levels.
South Sudan heads for mediation over oil spills -The East African Court of Justice has backed mediation as a first step in a legal fight between South Sudan and oil-producing communities.The First Instance Division will allow South Sudan and Hope for Humanity Africa (HHA) to attempt to find a resolution through talks. Mediation is due to begin early in July.HHA took South Sudan to court for alleged oil spills, caused by leaking oil pipelines.A lawyer representing South Sudan’s Minister of Justice asked the court to attempt settlement through mediation. A judge will preside over the mediation attempt. Should this process fail, the full court process will resume.In turn, the applicant withdrew two suits. The first attempts to stop South Sudan from carrying out oil exploration while the hearing is ongoing, the second attempts to provide safety for the lawyers involved.South Sudan launched a licence round this week, offering five blocks. The government has stakes in production through Nilepet.Justin Semuyaba and Wani Santino Jada represented the applicant. Bong Pieng Kuol acted for South Sudan.The case was filed in the East African court in April 2020. This aimed to halt production and secure compensation for communities that had suffered from pollution.Speaking to Energy Voice last year, Jada said Greater Pioneer Operating Co. (GPOC) and Dar Petroleum should carry out environmental remediation. Furthermore, the lawyer said the companies should replace the export pipeline as it was the cause of a number of spills. Jada had put the claim for damages at $720 million.
Decade Of Chaos Could Send Oil To $130 Per Barrel – From $35 per barrel to $130 per barrel – this is the range for oil prices in the next few years that we could see, according to a commodity trading group. And it will all depend on what peaks first: demand or investment in new production.”You could see spikes to even higher than $100 a barrel, even $130, and you could also see it go down to $35 a barrel for periods of time going forward,” William Reed II, chief executive of Castleton Commodities International, said at the FT Global Commodities Summit this week, asquotedby Reuters. “The question is what happens first. Peak demand or peak investment?”This is a fascinating question that will likely remain open for quite some time; it seems as if forecasts are even more unreliable than usual in the post-pandemic world. For instance, last year, energy authorities and the industry itself predicted oil demand growth was over thanks to the pandemic that encouraged a doubling down on an energy shift away from fossil fuels. Now, these same forecasters, including the International Energy Agency and BP(3.22%), are talking about growing oil demand.One thing that can hardly be disputed is that lower spending on exploration would inevitably lead to lower production. This is what we have seen: the pandemic forced virtually everyone in the oil industry to slash their spending plans. This is what normally happens during the trough phase of an industry cycle. What doesn’t normally happen in a usual cycle is long-term planning for smaller output. Yet this is the response of Big Oil to the push to go green. Most supermajors are planning changes that would effectively reduce their production of oil and gas. In Shell’s(3.58%)case, it has been literally ordered by a Dutch court to shrink its production of oil and gas.So, it’s pretty clear that supply is tightening, and oil prices are reflecting this. In fact, supply has lately shrunk so much that even the International Energy Agency, which earlier this yearcalledfor a suspension of all new oil and gas exploration, is nowcallingfor more supply. This is the perfect illustration of how difficult it has become to predict where oil prices would go even in the short term, let alone a period of several years.According to Castleton’s Reed, the recovery in oil prices was only to be expected. In that, he is the latest in the growing choir of voices predicting higher prices, even north of $100 per barrel, before too long. Yet, according to some, they might only stay there for a short while and then never reach the same levels.
Oil rallies on weaker U.S. dollar and Iranian supply uncertainty – Oil prices soared on Monday, gaining on a pause in talks to end U.S. sanctions on Iranian crude, and as the dollar retreated from two-month highs. Brent crude for August gained $1.39, or 1.9% to settle at $74.90 a barrel. U.S. West Texas Intermediate (WTI) crude for July gained $2.02, or 2.8%, to end at $73.66. Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel. The rebound has pushed up spot premiums for crude in Asia and Europe to multi-month highs. Bank of America said that Brent crude was likely to average $68 a barrel this year but could hit $100 next year on unleashed pent-up demand and more private car usage. Oil was boosted by a weaker U.S. dollar, which can send speculative investors into greenback-denominated assets like commodities. Negotiations to revive the Iran nuclear deal took a pause on Sunday after hard line judge Ebrahim Raisi won the country’s presidential election. “The election of a hard-liner in Iran is weighing on market (supply) as sanctions look less likely to be lifted,” said Bob Yawger, director of Energy Futures at Mizuho in New York. A deal could lead to Iran exporting an extra 1 million barrels per day, or 1% of global supply, for more than six months from its storage facilities. Iranian and Western officials say Raisi’s rise is unlikely to alter Iran’s negotiating position. Two diplomats said they expected a break of about 10 days.
Oil Slips After Hitting $75 — Oil retreated after hitting $75 a barrel in London for the first time in over two years, as traders waited to see how OPEC+ will handle a rapidly tightening market. Brent crude edged above $75 in Asian trading hours as price indicators and inventory data showed that demand continues to outstrip supply. The gains faltered as Russia — which jointly leads the OPEC+ coalition with Saudi Arabia — was said to consider proposing that the group increase production when it meets next week. The market continues to firm in a bullish structure, with one timespread for West Texas Intermediate expanding to the widest backwardation in seven years. Genscape Inc. reported stockpiles at the key American storage hub of Cushing fell again last week from the lowest level since March 2020, according to people familiar. Brent is also the most expensive against Middle Eastern oil in 21 months. That’s likely to boost the appetite of Asian refiners for barrels from the Persian Gulf linked to Dubai crude at the expense of Atlantic Basin grades. The global crude benchmark has rallied more than 40% this year as a strong rebound from the pandemic in the U.S., China and Europe underpins increasing fuel consumption, although a virus comeback in parts of Asia is a reminder that the recovery will be uneven. Brent may even advance to $100 a barrel next year as travel demand rebounds, according to Bank of America Corp. “Demand optimism is now well established and a tightening of the market is very much in the spotlight,” said Vandana Hari, the founder of Vanda Insights. “If there is a pause in this rally, it will likely come from the supply side.” One bit of bearish news amid all the optimism is China’s crackdown on the nation’s private refiners. A second batch of 2021 crude import quotas allocated to the independents was about 35% less than last year, which will crimp flows into a sector that accounts for around a quarter of Chinese processing capacity. Brent for August settlement fell 34 cents $74.56 on the ICE Futures Europe exchange at 10:00 a.m. local time after the highest intraday level since April 2019. The prompt timespread for Brent was 81 cents in backwardation, compared with 57 cents at the start of last week. WTI for July delivery, which expires Tuesday, was 55 cents lower at $73.11 a barrel on the New York Mercantile Exchange. The more-active August contract fell 49 cents to $72.63.
Oil settles lower as OPEC+ reportedly weighs an August increase in crude output – Oil futures settled lower Tuesday, with global benchmark Brent crude retreating from highs above $75 a barrel, on expectations that OPEC+ may decide to further boost crude production starting in August. Reports from both Reuters and Bloomberg said the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, had discussed a further relaxation of production curbs beginning in August. The OPEC+ report, ahead of the group’s scheduled meeting on July 1, “indicates that the demand-supply gap is already becoming an issue, and that the alliance is working on a plan to tap that deficit,” said Louise Dickson, oil markets analyst at Rystad Energy, in a daily note. “The OPEC+ chatter to raise supply is the most bearish risk for the recent oil price rally, which has been propelled on strong summer demand and an overall conservative supply environment,” she said. The most-active U.S. benchmark West Texas Intermediate crude for August delivery, which became the front-month contract at the end of the session, fell 27 cents, or 0.4%, to settle at $72.85 a barrel on the New York Mercantile Exchange. July WTI crude CLN21, which expired at the end of Tuesday’s session, lost 60 cents, or 0.8%, at $73.06 a barrel. August Brent crude fell 9 cents, or 0.1%, at $74.81 a barrel after hitting an intraday high at $75.30. Brent last traded above $75 in April 2019 on an intraday basis, according to FactSet. It hasn’t settled at a level that high since October 2018. “OPEC+ will likely loosen supply, either officially with a higher production target from August or unofficially with compliance slippage even earlier,” said Dickson. The group of producers already has an agreement in place to gradually increase oil production from May through July. Still, strong physical demand continued to underpin crude, analysts said. The backwardation of the Brent futures curve – with nearby futures prices trading at a premium to later dated contracts – underscores the near-term demand for barrels and is also generating additional speculative interest, said Eugen Weinberg, commodity analyst at Commerzbank, in a note. Among the petroleum products traded on Nymex Tuesday, July gasoline added nearly 1.3% to $2.22 a gallon, with prices based on the most-active contract marking their highest finish since May 24, 2018, according to Dow Jones Market Data. July heating oil rose 1.1% to $2.15 a gallon – the highest settlement since Nov. 12, 2018.
WTI Rebounds Back Above $73 After Bigger Than Expected Crude Draw –Oil retreated on the day after Brent topped $75/bbl in London for the first time in over two years, as Russia and other OPEC+ nations were said to consider increasing production.“Just the rumors that OPEC+ will consider adding additional production is enough to pull us back from the $75 mark,” On the positive side – for crude – negotiations to revive the Iran nuclear deal remain on pause after hardline judge Ebrahim Raisi won the country’s presidential election.Crude stocks were expected to fall for the 5th week in a row (and gasoline stocks to rise for the 4th straight week). API
- Crude -7.199mm (-6.3mm exp)
- Cushing -2.55mm
- Gasoline +959k (+1.3mm exp)
- Distillates +992k (+1mm exp)
Crude stocks fell more than expected (down 7.199mm barrels) for the 5th straight week…
WTI Fails to Extend Overnight OPEC+ Gains Despite Big Crude Draw Oil prices are up overnight, with WTI topping $74 (and Brent topping $75 – a fresh two year high), after a bigger than expected crude draw reported by API. Prices were also buoyed by reports that OPEC+ is considering raising production by 500k barrels a day (which is less than the widely expected 1mm b/d).In another supportive voice for oil prices, OPEC Secretary General Mohammad Barkindo said on Wednesday at the meeting of the organization’s economic think-tank, the Economic Commission Board (ECB), that “the latest market developments point to much better conditions and improved outlooks” of the oil market and global economy.U.S. Oil inventories were expected to drop by 6.3 million barrels for the week ended June 18, aided by the lifting of domestic restrictions amid vaccinations, and by exports. However, the emergence of a new variants in regions where vaccinations are slower may pressure the global economic recovery, and with it demand, according to Vince Piazza, senior energy analyst at Bloomberg Intelligence. DOE:
- Crude -7.614mm (-6.3mm exp)
- Cushing -1.833mm
- Gasoline -2.93mm (+1.3mm exp)
- Distillates +1.754mm (+1mm exp)
Crude inventories dropped for the 5th straight week…
Oil Prices Finish Higher Amid Overbought Signs — Oil pared gains with technical indicators showing the commodity is overbought, while traders assessed depleting U.S. stockpiles. Futures in New York closed 0.3% higher on Wednesday with West Texas Intermediate’s 14-day Relative Strength Index clinging near 70, a level that signals oil is due for a pullback. Meanwhile, a U.S. government report earlier showed crude supplies, gasoline inventories and stockpiles at the nation’s largest storage hub at Cushing, Oklahoma, all tumbled last week, reinforcing the expectation of limited supply during the summer driving season. Supply declines in the U.S. are the latest sign of a tightening global crude market as fuel demand bounces back from the pandemic. Stalled nuclear talks have also deferred the prospect of renewed Iranian supplies, keeping benchmark crude prices supported. However, OPEC+ is scheduled to meet next week to discuss its production policy for August and beyond, and some nations, most notably Russia, are considering backing an increase in output. “We’re at lofty levels and priced for bullish perfection,” said John Kilduff, a partner at Again Capital LLC. “Chatter about increasing output are going to tear away some of the gains.” Saudi Arabia’s Energy Minister said the OPEC+ alliance has a role in “taming and containing” inflationary pressures. Prince Abdulaziz said the group should remain cautious because the oil market wasn’t out of the “doldrums” created by the coronavirus pandemic. West Texas Intermediate crude futures for August delivery added 23 cents to settle at $73.08 a barrel in New York. Brent for August settlement climbed 38 cents to end the session at $75.19 a barrel on the London-based ICE Futures Europe exchange, the highest since 2018. Investors are also watching the spread of the delta variant in the U.S. and Europe, which could hamper a further recovery. The growing threat of the variant prompted a fresh warning on Wednesday from Europe’s disease prevention agency to speed up vaccinations and not rush reopening.
Crude Oil Ends up After US Infrastructure Deal; Eyes Next on OPEC — Crude oil prices rose slightly Thursday as positive sentiment over an infrastructure deal announced by the Biden administration helped overcome concerns about additional supply being announced at next week’s meeting of top producers.U.S. crude settled up 22 cents, or 0.5% at $73.30 a barrel. On Wednesday, WTI rose as high as $74.25, a peak not seen since October 2018. Brent crude finished the session at $75.56, up 37 cents, or 0.5%, after scaling $76.02 in the previous session, also a peak since October 2018.Crude settled higher after President Joe Biden said his Democratic Party managed to strike a contentious infrastructure deal with rival Republicans, without any tax hikes involved.Earlier on Thursday, oil was weighed down by expectations that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, was considering increasing supply at its meeting next week to curb the rapid rise in crude prices.Saudi Energy Minister, Prince Abdulaziz bin Salman, the de facto leader of the group, was reported Thursday saying that “we have a role in taming and containing inflation, by making sure that this market doesn’t get out of hand.” This follows reports out of Russia earlier this week suggesting it, one of the most influential members of the group, was considering proposing an increase in oil output at next week’s meeting.Oil markets have soared this year, with both benchmarks more than 40% higher year-to-date, on hopes of a quick return to peak demand as Covid-19 passes as well as OPEC+’s cautious husbandry of global supply.Evidence of the increased demand in the U.S., the globe’s largest consumer, came from the Energy Information Administration reporting a drop in U.S. stockpiles of 7.6 million barrels for the week ended June 18, the fifth consecutive week that stocks have fallen, the longest run since January 2021.This group is scheduled to meet toward the end of next week to discuss production quotas for August, and possibly beyond. OPEC+ has been steadily increasing output as the global economy recovers from the ravages caused by the Covid-19 pandemic, but is still withholding more than 5 million barrels a day of production from the market. Earlier Thursday, in annual talks with OPEC+, India’s oil minister called for “affordable” energy, warning about the impact of rising oil prices on consumers. India is the third largest consuming country in the world, and these comments will add pressure on the producers ahead of the meeting.
Oil prices rise to highest since Oct 2018, Brent reaches $76.18 per barrel – Oil prices climbed to their highest since October 2018 on Friday, putting both benchmarks up for a fifth week in a row on expectations demand growth will outstrip supply and OPEC+ will be cautious in returning more crude to the market from August. Brent futures rose 62 cents, or 0.8%, to settle at $76.18 a barrel, while US West Texas Intermediate (WTI) crude rose 75 cents, or 1.0%, to $74.05. Those were the highest closes for both benchmarks since October 2018 and put both contracts up over 3% for the week. “Crude prices rallied on an improving demand outlook and over expectations the market will remain tight as OPEC+ is likely to only deliver a small boost to output at the July 1st ministerial meeting,” said Edward Moya, senior market analyst at OANDA. All eyes are on the Organization of the Petroleum Exporting Countries, Russia and allies – together called OPEC+ – who are due to meet on July 1 to discuss further easing of their output cuts from August. “The producer group has ample space to boost supply without derailing the drawdown in oil stocks, given the rosier demand outlook,” said Stephen Brennock of oil broker PVM. On the demand side, the key factors OPEC+ will have to consider are strong growth in the United States, Europe and China, bolstered by vaccine rollouts and economies reopening, according to analysts who said this was countered by rising COVID-19 cases and outbreaks in other places. The prospect of sanctions on Iran being lifted and more of its oil hitting the market anytime soon has dimmed, with a US official saying serious differences remain over a range of issues over Tehran’s compliance with the 2015 nuclear deal. The lack of an interim agreement between the U.N. nuclear watchdog and Iran on the monitoring of atomic activities is a serious concern that has been communicated to Tehran, US Secretary of State Antony Blinken said on Friday. Iran has not responded to the U.N. nuclear watchdog on extending a monitoring agreement that expired overnight, the agency said on Friday, hours after Washington warned that not prolonging it would harm efforts to revive the 2015 Iran nuclear deal. “If an Iran agreement is not reached by July 1, we anticipate OPEC+ returning to month-by-month quota setting and announcing a modest production increase for August at its meetings next week,” Meanwhile, the number of US oil rigs, an early indicator of future output, fell one to 372 this week, according to energy services firm Baker Hughes Co. Despite that small decline, the rig count gained 13 in June, its 10th monthly rise and increased 48 in the second quarter, its third consecutive quarterly rise.
Light Crude Settles Above $74 | Rigzone — Oil posted its fifth straight weekly gain, the longest winning streak since December, as demand recovers and supplies continue tighten in the U.S. and China. Futures in New York rose 3.4% this week to the highest level since October 2018. Demand continues to rebound while the market expects output will only get a modest increase from the OPEC+ alliance, which meets next week to discuss supply policy. “It’s very unlikely, at least from my perspective, that they are going to go flood the market with crude, open up all the spigots and collapse the price,” said Bart Melek, head of commodity strategy at TD Securities. Stockpiles are draining rapidly as fuel consumption rebounds in key regions including the U.S. and Europe. At the same time, the prospect of an imminent surge of Iranian oil is diminishing as talks to revive a nuclear deal drag on. The increasingly bullish picture is helping to fan speculation that Brent may eventually return to $100 a barrel. JPMorgan Chase & Co. increased an estimate for 2021 global demand for crude by 200,000 barrels per day, with the majority of that gain coming from China. U.S. demand would stay strong until September, the report said. Gasoline futures fell Friday after the Supreme Court announced Friday that the Environmental Protection Agency has wide latitude to exempt refineries from federal mandates that they mix renewable fuels into gasoline and diesel. The decision marks a victory for oil companies that have sought a break from the requirements, arguing that costs have skyrocketed in the recent months. “It’s the same theme that we’ve been showing the past several weeks: no real relief on the supply front and strong demand,” said John Kilduff, a partner at Again Capital LLC. West Texas Intermediate for August delivery rose 75 cents to settle at $74.05 a barrel on the New York Mercantile Exchange. Brent for August settlement rose 62 cents to end session at $76.18 on the ICE Futures Europe exchange. The world’s third-biggest oil consumer India has called for an increase in output from OPEC and its allies, saying high crude prices are adding to inflationary pressure. India’s transport fuel demand is expected to grow in double digits next year, according to Icra Ltd.
Watch: US Patrol In Syria Blocked By Line Of Russian Commandos –Over the weekend, a US military patrol in northeastern Syria was blocked by the Russian military and forced to turn backto where they came from. The US reportedly violated existing security deals with Russia.Video of the brief encounter published by the Russian side shows the tense moment that Russian troops physically blocked the road while clutching their rifles:The US and Russia both have troops in reasonably close proximity in Syria, and the US tends to hype confrontations heavily. To try to reduce the number of issues, they’ve made several deals to coordinate their patrols and avoid running into one another.That works well, as far as it goes, but in this case the US didn’t inform Russia ahead of time, so when the Russian forces ran into them, they complained about the US ignoring protocol on prior notice. The US has not commented on why they ignored the protocol, but it’s not clear why they bother to patrol anyhow, since the US presence is very limited, a hold-over from President Trump’s plan to take Syria’s oil.Patrolling into adjoining Kurdish areas means the US retains some ties to the Kurds, but with Russia and Turkey also in the area, it’s a potentially complicated matter, especially if the US considers previous deals to be optional.
Russian Warships Practice Sinking Aircraft Carrier 35 Miles Off Hawaii Coast As US Places F22s On Standby – For weeks Russia has mustered a large fleet and aerial assets in the Pacific Ocean near Hawaii in what’s been widely recognized as Russia’s largest Pacific military drills since the end of the Cold War. The Pentagon has closely monitored the somewhat unprecedented exercises which have seen at least 20 warships, submarines, fighter jets, and long-range bombers operating a mere 300 miles off Hawaii’s coast. But in a new alarming statement the US Navy is confirming that at one point Russian vessels and aircraft came a mere 35 miles off Hawaii’s coast as the massive war games were underway. While stressing that the foreign military assets stayed within international waters, spokesman for US Indo-Pacific Command Navy Capt. Mike Kafka, said, “At the closest point, some ships operated approximately 20 to 30 nautical miles (23 to 34 statute miles) off the coast of Hawaii,” he said. “We closely tracked all vessels.”New details of Russian maneuvers during the course of the exercises suggest there were multiple “close calls” – also as days ago the Pentagon scrambled F-22 stealth fighters, which remain on standby.The Russian side is now divulging that its military undertook mock attacks on a simulated aircraft carrier strike group.