Oil, Gas, And Fracking News Reads: 04July 2021 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles for the week ending 03 July 2021. Go here for Oil, Gas, And Fracking News Read 04July 2021 – Part 1.

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

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EIA estimates drilled but uncompleted wells for key oil and natural gas basins – EIA – We release an updated inventory of what we consider drilled but uncompleted wells (DUCs) each month in ourDrilling Productivity Report (DPR). We publish updates to DUC estimates by region in a publicly accessible spreadsheet. In May 2021, the most recent month available, we estimated that the United States has about 6,521 DUCs in seven major tight oil and shale natural gas basins, up from about 4,425 DUCs in 2013, the earliest year in the data series. Nearly 40% of DUCs (or 2,616 DUCs) are in the Permian Basin, located in western Texas and eastern New Mexico.We estimate that the U.S. DUC inventory peaked at 8,874 DUCs in June 2020. From June 2020 through May 2021, we estimate that DUCs declined by 27%, or by 2,353 DUCs. Since the COVID-19 pandemic began, exploration and production (E&P) companies have cut capital expenditures, deployed fewer rigs, and reduced oil and natural gas production in response to lower demand and lower prices. DUCs help operators produce oil and natural gas at a lower cost.We estimate DUCs by examining the difference between records of drilled wells and completed wells each month; the difference equals the net change in the DUC inventory, or well count. Our DUC inventory estimates depend on assumptions about the wells reported to FracFocus.We estimate that most DUC wells are completed and begin producing hydrocarbons within one year after they are drilled. However, the timeline for completing wells can vary based on a variety of factors, including the prices of crude oil, petroleum products, and natural gas. E&P companies maintain DUC well inventories to ensure the well completion rate remains flexible. For instance, E&P companies coordinate the drilling and completion of wells to minimize operational delays. Generally, E&P companies maintain a DUC backlog that can sustain oil or natural gas production for several months so that they always have wells they can complete quickly. Because new oil and natural gas wells have decline rates that can be as high as 60% – 70%, E&P operators need a constant supply of new wells that are ready to be completed to maintain steady production levels.

Officials: 2 killed in natural gas line explosion in Texas – Two people were killed and three injured in a natural gas pipeline explosion in Texas, officials said. The deadly blast happened around 4 p.m. Monday at an Atmos Energy facility in Collin County near Farmersville, about 35 miles (56 kilometers) northeast of Dallas. Collin County Sheriff Jim Skinner said the explosion appeared to be an accident but he invited the FBI to assist in the investigation. It was not immediately known what caused the blast. Those involved in the explosion were contractors for Atmos Energy, and the Collin County Sheriff’s Office said Monday night the contractors were employees of Bobcat Contracting and Fesco Petroleum Engineering. Two of the injured were taken to a hospital. The workers were servicing a gas line when the explosion happened, Farmersville police Chief Mike Sullivan told WFAA-TV. The Princeton and Farmersville fire departments, Collin County EMS and multiple other local law enforcement agencies responded to the blast. ‘Our prayers are with those who were affected by the events in Farmersville, Texas, today,’ Atmos Energy said in statement. ‘Out of respect for their privacy, we are not releasing any names or additional details at this stage,’ the statement added.

Collin County explosion: What we know – Officials have released the identities of the two men killed Monday in a gas line explosion. Three others were injured in the explosion that happened in an unincorporated area of Collin County near Farmersville, officials said. The men were identified as 22-year-old Ethan Knight of Mesquite and 35-year-old Deric Tarver of El Campo. Princeton and Farmersville fire departments, Collin County EMS and multiple other local law enforcement agencies responded to the explosion, which was reported around 4 p.m. in the area of Farm to Market Road 2756 near Highway 78. According to the Farmersville police chief, the people involved in the explosion were contractors for Atmos Energy, not actual Atmos employees, who were servicing a gas line in the area when the explosion happened. The Collin County Sheriff’s Office said Monday night the contractors were employees of Bobcat Contracting and Fesco Petroleum Engineering. Two of the people injured were taken to the hospital. Sheriff Jim Skinner said while the explosion appears to be an accident, he has invited the FBI to assist in the investigation. The National Transportation Safety Board is also investigating. It’s unclear at this time what caused the explosion.

Study: EPA underestimated methane emissions from oil and gas development – The Environmental Protection Agency (EPA) has underestimated methane emissions caused by oil and gas production by as much as 76 percent, according to research published Tuesday in the Journal of Geophysical Research: Atmospheres. Researchers from Pennsylvania State University collected data in the mid-Atlantic, mid-South and central Midwest of the U.S. from 2017 to 2019, tracking the movement of carbon dioxide, methane and ethane within weather systems. They then studied ethane-to-methane ratios from oil and gas production basins and compared to them an EPA inventory of those emissions. The assessment found emissions at levels between 48 percent and 76 percent higher than the EPA’s estimates. The researchers said they specifically analyzed ethane because it is only produced alongside certain methane emissions, whereas methane can be produced naturally and by landfills. Ethane also only lingers in the atmosphere for months at a time and offers a clearer picture of how recent the methane emissions occurred. In a statement to The Hill, the EPA said its greenhouse gas emissions inventory methods are continually updated based on stakeholder feedback. “Given the variability of practices and technologies across oil and gas systems and the occurrence of episodic events, it is possible that the EPA’s estimates do not include all methane emissions from abnormal events,” an agency spokesperson said. “For many equipment types and activities, the EPA’s emission estimates include the full range of conditions, including ‘super-emitters.’ For other situations, where data are available, emissions estimates for abnormal events are calculated separately and included in the GHG Inventory,” the spokesperson added. “The EPA continues to work through its stakeholder process to review new data from the EPA’s Greenhouse Gas Reporting Program (GHGRP) and research studies to assess how emissions estimates can be improved.”

INTERIOR: Watchdog: Agencies use outdated systems to track oil and gas — Monday, June 28, 2021 — The Interior Department’s use of outdated, aging data systems to track information like oil and gas permit approvals compromises its oversight responsibilities, according to a Government Accountability Office report released today.

Satellite images reveal where large amounts of methane are being released in Permian Basin – (videos) An international team of researchers has found a way to isolate individual methane contributors in the Permian Basin. In their paper published in the journal Science Advances, the group describes using satellite images to isolate sites that are releasing large amounts of methane into the atmosphere in the Permian Basin.The Permian Basin is a large sedimentary basin situated in the southwest United States. It includes parts of Texas and New Mexico, and has become a major source of shale oil and natural gas extraction. Prior research has shown that as part of shale oil and natural gas extraction, gases are released into the atmosphere. To prevent these releases, most extraction operations burn the gas as it is released. But, as the researchers with this new effort have found, these operations in the Permian Basin are missing a lot of themethane emissions, which are winding up in the atmosphere as a greenhouse gas. Prior research has suggested that as much as 20% of all methane emissions in the U.S. come from the Permian Basin.Prior efforts to measure and monitor gas emissions at individual shale oil and natural gas extraction and processing sites have involved the use of ground-based sensors. But these efforts have met with limited success due to the size of the areas being studied. In this new effort, the researchers turned to satellites equipped with hyperspectral capabilities, which image bands of the electromagnetic spectrum. Analysis of imagery from these sources allowed for measuring the amounts of gases emitted from relatively small sources on the ground.Compilation of infrared video footage for several large methane emission sources in the US Permian Basin. In some cases, simultaneous visible light footage is also shown. Credit: PermianMAP, Environmental Defense Fund, 2021 In studying the imagery from China’s Gaofen-5 and ZY1 satellites and Italy’s PRISMA mission, the researchers were able to isolate individual sources of methane emissions in the Permian Basin. They pinpointed 37 methane plumes from individual sources that had emissions higher than 500 kilograms per hour. They estimate that the sources they found contribute between 31 and 53% of all emissions in the parts of the basin they studied. They also suggest that current methods to prevent methane emissions in the shale oil and natural gas extraction industry in the Permian Basin are not sufficient – the actual emissions represent a major contributor to global warming.

Big Oil and Gas Kept a Dirty Secret for Decades. Now They May Pay the Price -After a century of wielding extraordinary economic and political power, America’s petroleum giants face a reckoning for driving the greatest existential threat of our lifetimes.An unprecedented wave of lawsuits, filed by cities and states across the US, aim to hold the oil and gas industry to account for the environmental devastation caused by fossil fuels – and covering up what they knew along the way.Coastal cities struggling to keep rising sea levels at bay, midwestern states watching “mega-rains” destroy crops and homes, and fishing communities losing catches to warming waters, are now demanding the oil conglomerates pay damages and take urgent action to reduce further harm from burning fossil fuels.But, even more strikingly, the nearly two dozen lawsuits are underpinned by accusations that the industry severely aggravated the environmental crisis with a decades-long campaign of lies and deceit to suppress warnings from their own scientists about the impact of fossil fuels on the climate and dupe the American public. The environmentalist Bill McKibben once characterized the fossil fuel industry’s behavior as “the most consequential cover-up in US history”. And now for the first time in decades, the lawsuits chart a path toward public accountability that climate activists say has the potential to rival big tobacco’s downfall after it concealed the real dangers of smoking..

How Last Century’s Oil Wells Are Messing With Texas –Ashley Watt is nothing if not a friend of fracking. She’s invested in mines that supply the sand frackers blast into the ground. Her family owns a ranch larger than Manhattan that’s home to hundreds of oil and natural gas wells. Her Twitter handle is “Frac Sand Baroness.”That’s what made it all the more jarring almost three weeks ago when Watt began publicly railing against one particular oil driller for leaks on her land. Noxious wastewater from oil drilling began leaching across the ground, endangering people and livestock. By her count, the pollution has killed four cows and two calves so far. Chevron Corp., which drilled the 1960s-era wells that polluted Watt’s land, brought in earth-moving equipment and a well-control crew, even though it had sold most of its interests there years ago. It took 10 days to halt the first leak. Given the hundreds of other aging wells dotting the land, it’s done little to put Watt’s mind at ease.”I am not anti-oil industry,” Watt said in an interview. “That is the economy here. It’s a good business.” At the same the same time, she said, “We have to be responsible stewards. If we can’t do it right here in the Permian Basin, then how can we do it right anywhere? Nobody should let us in if we’re going to act like this.”And just like that, Watt – whether she liked it or not – became an ally to scores of environmentalists and activists who’ve been warning for years that America is on the verge of an environmental disaster. Long before the advent of shale drilling techniques that fueled the greatest move toward energy independence the nation’s ever seen, conventional oil explorers left the country pierced with millions of defunct wells that are aging by the day and increasingly springing leaks.”There’s this enormous backlog” of abandoned wells, “and we don’t have financing in place to clean them up,” said Daniel Raimi, a fellow at the non-profit research group Resources for the Future. “We’ve seen very clearly that existing regulatory structures, particularly at the state level, have not properly incentivized companies to clean up their infrastructure.”

How California’s Drought Puts Pressure On Natural Gas Prices In Texas -A drought in California is stressing the power grid, forcing that state to use more natural gas. So, is this demand driving up natural gas prices in Texas?Matt Smith, director of commodity research at ClipperData told Texas Standard that the drought means hydropower generation in California is down significantly. Hoover Dam, which supplies hydroelectric power for California, Nevada and Arizona, has cut capacity by one-quarter, for example.”California is relying more on other sources, on fossil fuels, as summer heats up,” Smith said.The state imports more than 90% of the natural gas it uses from out of state, and the need to bring in more has affected prices.”The southwest gas is ultimately coming from Texas,” Smith said.Natural gas prices behave somewhat like oil prices, he says.”After all, a lot of natural gas production in Texas is from what’s known as ‘associated gas,’ which is essentially natural gas which is coming out of the ground as a byproduct as producers go after the more valuable product of crude oil,” he said.Even though commodity prices are up, Smith says production is down right now as drillers cut back on costs.

Far From Texas, Huge Gas Bills Stoke Anger After February Freeze – WSJ – An angry backlash is building across the middle of the U.S. as states step in to help their constituents pay billions of dollars in natural-gas bills racked up during February’s freeze.While most escaped the blackouts that occurred in Texas, states from Minnesota to Kansas are having to help local utilities, businesses and homeowners cover February bills after natural-gas prices surged from around $2 per million British thermal units to as much as $1,200 in parts of the country.Lawmakers and regulators in Minnesota, Oklahoma, Missouri, Arkansas and Kansas have called for investigations into market manipulation and are exploring regulatory changes. Republican and Democratic leaders in some of the states said it may be time to reconsider whether interstate gas markets, deregulated since the 1980s, need greater federal oversight to prevent a similar economic calamity from happening again. The February storm caused wellheads and pipelines to freeze in Texas and other gas-producing states, crimping supplies just as millions of customers cranked up the heat. The effects were felt far from the Lone Star State, leaving many homeowners and businesses with monthly bills hundreds or even thousands of times as large as usual.In Oklahoma City, the Villagio senior living center received a February gas bill of $44,527 – about 50 times more than the month before – from its gas marketer, Constellation, a subsidiary of Chicago-based Exelon Corp. EXC -0.69%“It was shocking, and it has an impact on residents, on things we were going to do,” said Tyler Gable, a representative of the assisted-living facility’s owner, Blackwood, which is contesting the bill. Oklahoma regulators said the weeklong freeze generated as much as $5 billion in gas bills there. That has left some lawmakers in the reliably Republican state to call for further regulation of natural-gas producers, one of the most influential industries in Oklahoma. “I cannot for the life of me understand how we saw it go from $2 to $1,200 and back down to $2 in the span of the week; that’s not real,” said Garry Mize, a Republican who is chairman of the utilities committee in Oklahoma’s House of Representatives. referring to natural-gas prices. “It’s hard on a political level because you’d like to believe that free markets work all the time.” Mr. Mize helped draft legislation signed into law in April that will allow utility companies to stretch the impact to customers over 10 years by securitizing rate payments and selling them as bonds. Without the measure, he estimated that ratepayers who normally pay an average bill of $100 a month would have seen bills for February reach around $1,900.

Wastewater Problem Could Cap U.S. Shale Growth – Hydraulic fracturing, the technology that made the United States the world’s top oil and gas producer, has earned a really bad rap. Much of this ill reputation has had to do with increased seismic activity in shale oil and gas regions. But research cited by the U.S. Geological Survey showed a few years ago that it’s not fracking itself that is the problem. The problem is the disposal of wastewater, and it is not going away.Earlier this month, Rystad Energy warned in a report that the number of seismic events in key oil-producing regions has been on the rise. Since 2017, quakes of a magnitude above 2.0 had quadrupled. Seismic activity will increase further this year, Rystad analysts added, if the U.S. oil and gas industry continued to produce hydrocarbons the same way.The amount of water that is used in the drilling and fracking of shale oil and gas wells varies widely. It can be anywhere from 1.5 million gallons to 16 million gallons, according to the U.S. Geological Survey. But that was several years ago. Since then, water use has only grown as fracking activity has increased. After drilling and fracking, the used water – typically called produced water – is disposed of in underground injection wells. The more water is injected, the more likely seismic events become because, put simply, millions upon millions of gallons of water injected into rock formation change the pressures in this formation, triggering increased seismic activity.Now, the USGS makes a point of noting that not all wastewater injection wells will lead to an increased likelihood of quakes. Still, the data cited by Rystad Energy indicates that even if some wells lead to more quakes, it’s bad enough. Since the start of this year, the consultancy noted, there have been 11 earthquakes in Oklahoma, Texas, Louisiana, and New Mexico with a magnitude of above 3.5. This compares with 14 such events for the whole of 2020 and six in 2018 and 2019 each. Now, someone with a grim sense of humor might say quakes are a good indication of the recovery of oil and gas drilling after the worst of the pandemic, but the 2020 number is worrying because it was recorded in a year when drilling activity was severely depressed because of the pandemic. Indeed, the Rystad data showed that last year oil and gas drillers disposed of 11.3 billion barrels of produced water, down from 12.4 billion barrels a year earlier and 11.5 billion barrels in 2018. Yet seismic activity increased even further last year.Drilling activity is also increasing now that oil prices have recovered faster than many expected. The increase is still cautious as upstream companies still remember the devastating blow their industry suffered last year. Yet demand is growing. This could lead to not only higher prices still but more drilling and, consequently, more wastewater disposal. Alternatively, it could lead to more water recycling and reuse.

House passes resolution that would repeal a Trump-era EPA rule on methane emissions – The House voted Friday to repeal a Trump-era rule that rolled back regulations of methane emissions from oil and gas industries, sending a resolution to President Joe Biden’s desk for his signature as his administration looks to combat climate change. The final vote was 229-191. All Democrats supported the resolution, and 12 Republicans broke ranks and supported it as well. The resolution would restore an Obama-era rule that controlled leaks of methane from oil and gas operations. In September, the Trump administration rolled back the 2016 regulation limiting methane leaks by requiring companies to monitor and repair new natural gas equipment. The Senate passed the resolution at the end of April under the Congressional Review Act, which allows Congress to roll back regulations imposed by the executive branch. The CRA allows Congress to rescind within 60 legislative days a regulation put in place by an administration without having to clear the 60-vote threshold in the Senate that is necessary for most legislation. The Republicans who voted for the resolution were Reps. Fred Upton of Michigan, Jeff Van Drew of New Jersey, Peter Meijer of Michigan, Pete Sessions of Texas, Brian Mast of Florida, Andrew Garbarino of New York, Brian Fitzpatrick of Pennsylvania, John Katko of New York, Young Kim of California, Nancy Mace of South Carolina, Tom Reed of New York and Maria Elvira Salazar of Florida. A spokesperson for the Environmental Protection Agency called Friday’s vote “an important step” for protecting public health and combating the climate crisis. “Today’s Congressional action is an important step toward restoring crucial measures to protect public health from methane and other harmful air pollutants from new and modified oil and gas facilities, a critical move in tackling the climate crisis and protecting our communities,” the EPA spokesperson said in a statement.

U.S. crude inventories depleting at record pace on surging oil demand –Crude inventories in the U.S. are falling at the fastest rate in decades as demand continues to rebound, prompting a rally in the oil futures market. Over the last four weeks total stockpiles, including the Strategic Petroleum Reserve, have fallen at a rate of 1.15 million barrels a day, marking the largest four-week decline on a rolling basis in Energy Information Administration Data going back to 1982. Meanwhile, Nymex calendar spreads rallied Wednesday, with the September West Texas Intermediate futures contract rising to $1 a barrel premium over October for the second time this month, pointing to expectations for ongoing supply tightness through the summer. The record rate of drawdowns underscore the strength of the U.S. oil demand recovery just ahead of a critical meeting between OPEC and its allies on Thursday to debate a potential output increase. Americans are taking to the roads and skies at increasing numbers as the country emerges from months of lockdowns. To meet demand, oil refiners boosted crude processing to levels only seen before the pandemic. At the same time U.S. drillers have been slow to respond to the oil prices, which are up more than 50% so far this year. Domestic crude production is holding at roughly 15% below peak levels seen early last year. Further supporting the so-called timespreads are stockpile levels in Cushing, Oklahoma, the delivery point for WTI futures. Inventories in the hub are at the lowest levels in over a year. Analysts are estimating and traders are betting that supplies will drop to multi-year lows by the end of the summer. Prior to this month, the spread between the second month and third month WTI contracts hadn’t exceeded $1 a barrel since 2018. Overseas interest in American crude has also been climbing despite a bumpy recovery from the health crisis in Asia and Europe. Exports of U.S. crude remain strong even as rallies in WTI have narrowed its spread to less than $2 a barrel relative to global benchmark Brent. The global supply situation looks set to remain tight as OPEC and its allies have yet to come to a consensus on how much shut-in oil to return to the market at a time when there is much demand uncertainty. That has delayed preliminary talks between ministers by a day to allow more time for a compromise before Thursday’s discussion. The International Energy Agency has warned of supply deficits in the second half of this year unless the group acts fast to add more crude.

Fish, propane, cash: Not everyone loves Enbridge generosity in the Straits – Barbara Brown was visiting a friend when she heard about Enbridge’s latest act of generosity in town. “She asked me if I had gotten my whitefish,” Brown said, and showed a bag of “beautiful, big fillets” bearing the company’s logo. The Canadian petroleum giant, whose Line 5 pipeline crosses the Straits of Mackinac just outside town, had co-sponsored a giveaway at the local community action agency, working with St. Ignace-based Massey Fish Company to distribute 2,000 pounds of whitefish to 400 seniors. The friend, like Brown, is not a fan of Enbridge. But for the friend, about 40 bucks worth of free whitefish was reason enough to set differences aside, if only momentarily. Brown felt differently, viewing the whitefish as an effort to woo residents to Enbridge’s side. “I thought it was an aggressive influence campaign,” said Brown, a former state judge who serves on the board of For Love of Water, a northern Michigan nonprofit that opposes Line 5. Since the company’s oil pipelines became a hot-button political topic in Michigan, Enbridge has steadily ramped up its physical and philanthropic presence in the Straits, hiring staff, installing surveillance infrastructure, buying land and donating to all manner of local causes. But as the company continues to defy a state order to shut down Line 5, its opponents view the largesse as part of an effort to curry favor with local residents and public officials who could influence debates about the pipeline’s fate. Others welcome the donations as further evidence that Enbridge cares about the community – stewardship that they say is also evident in the company’s efforts to better monitor its 68-year-old pipeline after a series of anchor strikes since 2018 heightened concern about a potential oil spill. The company’s growing local presence begs a question: Where does one draw the line between being a good corporate citizen and political lobbying?

Minnesota Sheriff Blockades Anti-Pipeline Camp -A Minnesota sheriff’s office blocked access Monday morning to one of the protest encampments set up to resist the Enbridge Line 3 tar sands pipeline. In a notice delivered at 6 a.m. to pipeline opponents, who own the property, the Hubbard County Sheriff’s Office stated that it would no longer be allowing vehicular traffic on the small strip of county-owned land between the driveway and the road. Sheriff’s deputies arrived with trucks carrying building materials, a witness said. Join Our Newsletter Original reporting.Fearless journalism.Delivered to you. “I was handed a notice that states the sheriff will be installing a physical barricade across the driveway to our private property,” said Tara Houska, an Anishinaabe co-founder of the anti-pipeline Giniw Collective, which organized the camp. “He’s saying that we have no right of access to our private property by vehicle.” The pipeline opponents, also known as water protectors, plan to take legal action. “This is quite simply nothing less than an overt political blockade,” said Mara VerheydenHilliard, an attorney for the pipeline opponents and director of the Partnership for Civil Justice Fund’s Center for Protest Law and Litigation. “This is an outrageous and unlawful effort to blockade people who are engaged in protected First Amendment activity and to punish them for their opposition to the Enbridge pipeline, where Enbridge is serving as the paymaster for Hubbard County sheriff.” Verheyden-Hilliard was referring to an Enbridge-funded escrow account set up by the Minnesota Public Utilities Commission to reimburse public safety agencies for activity related to Line 3. So far Enbridge has reimbursed Hubbard County $2,660 for riot helmet face shields and chest protectors as well as equipment related to removing pipeline opponents locked to construction infrastructure. The Hubbard County Sheriff’s Office did not respond to a request for comment

Pipeline workers arrested in northern Minn. sex trafficking sting – – Two Enbridge Line 3 pipeline workers from Bemidji were among six men arrested in a northern Minnesota sex trafficking sting this weekend.Enbridge said Monday both were immediately fired.”Enbridge and our contractors have zero tolerance for illegal and exploitative actions,” the company said in a statement. “That is why we are joining with our contractors and unions to denounce the … actions of those who participate in sex trafficking.”The sting took place on Friday and Saturday in Beltrami County, authorities said.”During the operation, suspects responded to an ad on a sex advertisement website,” according to a Minnesota Bureau of Criminal Apprehension (BCA) news release. “Investigators arrested the suspects as they arrived at an arranged meeting place for a commercial sex crime.” The BCA’s Human Trafficking Investigators Task Force worked with the Tribes United Against Sex Trafficking Task Force, the Beltrami County Sheriff’s Office and the Bemidji Police Department.

Nearly 800 Line 3 pipeline workers tested positive for COVID-19 – A total of 788 workers building Enbridge’s Line 3 pipeline through the US state of Minnesota have tested positive for COVID-19, according to data obtained by Al Jazeera from the Minnesota Department of Health (MDH). The project, the largest in Enbridge history, would replace a 1,700-kilometre (1,000-mile) oil pipeline that runs from Edmonton, Alberta in Canada to Superior, Wisconsin in the US. Construction is on track to continue until the end of the year, amid protests andIndigenous resistance to the project.In late November, amid the worst wave of the pandemic in the state, thousands of out-of-state workers arrived to build the pipeline through rural communities in northern Minnesota.The data shows that shortly after construction began on December 1, 2020, a wave of pipeline workers contracted the virus. The winter surge in cases has subsided, but Line 3 workers are still contracting COVID, as the highly contagious Delta variant is now taking hold in the US.Three workers were hospitalized, and none have died, according to MDH.Healthcare workers tell Al Jazeera they believe the bulk of cases could have been prevented.In November, more than 200 healthcare workers and Indigenous tribal leaders petitioned Governor Tim Walz to issue an emergency stay on construction until after vaccines were widely available. But Walz allowed the project to go ahead.

Minnesota’s OK for Enbridge to temporarily move 5B gallons of water sows tension – Some environmentalists and Ojibwe tribes are angered at the state’s decision to allow Enbridge to move 5 billion gallons of water as it builds a replacement for its Line 3 pipeline – up from 510 million in the company’s original permit.The water involved is in shallow aquifers, and it is temporarily being moved so that it doesn’t drain into the pipeline’s trench during construction.It’s pumped from wells 10 to 15 feet deep and moved nearby to seep back into the soil to restore groundwater balance.Earlier this month, the Department of Natural Resources (DNR) approved Enbridge’s request to move 10 times as much water as originally planned, amending a permit it originally granted in November. The company started construction late last year, and the 340-mile oil pipeline is now more than 60% built.White Earth and Red Lake – the state’s two largest Ojibwe bands – say they weren’t adequately consulted about the DNR’s decision.And critics say the sheer volume of water transferred could endanger the ecosystem near the pipeline, including wild rice beds, and even more so during the current drought.”The surface water and shallow groundwater is more sensitive to drying out in these conditions,” said Christine Dolph, a research scientist at the University of Minnesota’s ecology department. “The huge increase in volume is really concerning, and it is unclear why [Enbridge] would have been off by so much. It indicates they don’t understand the system they are working in.”Enbridge requested the increase in “construction dewatering” early this year, saying winter conditions were much wetter than expected. Also, the company said at the time that it was switching from sump pumps to move water to “well point” water extraction.The latter, which state agencies recommended to Enbridge, decreases turbidity – a good thing – but requires the transfer of more water.In its amended permit issued June 4, the DNR concluded that Enbridge’s increase in dewatering was necessary for the safety of workers in the pipeline’s trench.”Our evaluation of nearby wetlands is [also] that the temporary dewatering of trenches is not expected to have any significant impact on nearby wetlands or other surface waters, even in drought conditions,” the DNR said in an e-mail to the Star Tribune.”The current drought conditions may actually reduce the need for dewatering in some areas because less water may be seeping into trenches in drought-affected areas,” the agency said.Enbridge, in a statement to the Star Tribune, said it expects soggy conditions to remain, giving no indication it would reduce dewatering.

Bitcoin fracking turns waste gas to gold in Montana | Energy News Network –Houston-based Kraken Oil & Gas has dug in here for the oil released by hydraulic fracturing, or fracking, the technology that, along with horizontal drilling, spurred the Bakken oil boom in North Dakota and this stretch of eastern Montana in the late 2000s and early 2010s. Even as the boom has cooled from its peak over the last decade, production has continued on pads like this one, where the liquid oil pulled from the earth is piped away, headed toward refineries that convert it to gasoline or plastic. On sites without a pipeline connection, producers truck liquid oil away in tanks instead.Bakken oil, though, commonly comes to the surface with a not-necessarily-welcome companion: natural gas that is both harder to transport from remote well pads and less profitable to sell. In part because one component of that gas, methane, is a potent greenhouse gas – an estimated 25 times as effective at trapping planet-warming heat in the atmosphere as carbon dioxide – companies like Kraken routinely burn off unwanted waste gas in well pad flares, converting as much of the methane as they can to the comparatively benign CO2.The inherent wastefulness of flaring, as well as its climate implications, have attracted the attention of government regulators and environmentalists. North Dakota, for example, has had flaring reduction targets as far back as 2014 in an effort to encourage the oil industry to invest in the infrastructure it needs to capture byproduct gas and do something useful with it.More recently, as Bitcoin and other cryptocurrencies have emerged as major investment options, the cheap energy going up in smoke on well pads has also caught the attention of tech-savvy entrepreneurs.Unlike traditional currencies like the American dollar, which are regulated by central banks, Bitcoin and its peers are managed by digital exchanges that use decentralized databases and cryptography to keep track of ownership. New units of Bitcoin are created by digital mining, essentially performing computational gymnastics to unlock new bitcoins. Bitcoin mining, however, has become an increasingly difficult endeavor as the digital currency’s popularity has grown, requiring special-purpose hardware and tremendous amounts of electricity to power it. That power consumption has, in turn, seen the cryptocurrency industry criticized for its own impact on the climate. A Bitcoin mine operating out of an old mill building near Missoula, for example, attracted criticism after county officials said it was using as much power as a third of the households in the county. Additionally, researchers at the University of Cambridge estimate that Bitcoin currently consumes nearly 94 terawatt-hours of power a year globally, more than the combined consumption of the 108 million people who live in the Philippines.

The Keystone XL Pipeline Is Dead, but TC Energy Still Owns Hundreds of Miles of Rights of Way – When Richard Johnson heard that the Keystone XL pipeline had been canceled earlier this month, he felt a surge of relief. Johnson’s ranch lies directly on the pipeline’s planned route through the sandy plains of eastern Nebraska, and he had been tangling in court with the developer ever since the corporation used eminent domain to condemn a strip of his property in 2019.But relief quickly gave way to confusion and uncertainty when he learned that the condemnation would not necessarily be reversed, even if the pipeline is never built.As it prepared to construct Keystone XL, the Canada-based TC Energy secured hundreds of easements across farms and ranches up and down the 1,210 mile route through the Great Plains. For those landowners like Johnson who refused to sign easements, the company generally condemned the land through eminent domain proceedings. But now, even though it has canceled the project, TC Energy can retain the easements it secured indefinitely and use them for another purpose, or even sell them to other companies.”We’re still not sure where we’re at,” Johnson said. “If they secure an easement, they could sell it or assign it. To what it could be used for, I’m not real sure. But it’s that unknown that concerns me.” Even though the Keystone XL pipeline is dead, the more than decade-long fight over the controversial project is not. Pipeline opponents said the case highlights an emerging problem as the nation pivots away from fossil fuels. In Nebraska and many other states, they said, there are no laws or regulations that require pipeline developers to return easements to landowners if their projects are canceled or rejected, or after older pipelines are retired.”This has always been one of the concerns right from the beginning of fighting the pipeline,” said Jane Kleeb, founding director of Bold Nebraska, an advocacy group that helped lead opposition to Keystone XL. Kleeb worries that the route could now be used for a different pipeline. Even if the route is not used, she said, the lingering easements could hang over landowners, preventing them from developing parts of their property, diminishing its value and complicating future sales or transfers.”Those landowners, every single day, have this looming over them,” Kleeb said. “That tomorrow, a company could sell those easements to China, to Russia, to whoever, and they would have no say over that.”

SoCal spot gas prices soar as California ramps up thermal generation to keep cool | S&P Global Platts – Spot gas prices in Southern California climbed above $7/MMBtu in June 29 trading as the region turned to gas-fired generation to cope with an ongoing heat wave while power imports dropped. Cash SoCal city-gate gained 52 cents to reach $7.07/MMBtu in June 29 trading for next-day flows, according to preliminary settlement data. Spot gas price locations that represent entry points for gas flowing toward the SoCalGas system saw similar movement: SoCal Gas spiked $1.63 at $6.97/MMBtu. Thermal power demand in the California Independent System Operator footprint has exploded over the last several days since the West Coast heat wave began in earnest. CAISO data showed that thermal power generation increased 58% to 331 GWh on June 28, up from 210 GWh on June 26. While thermal power, the category used by the California system operator, include both gas- and coal-fired generation, there is only one remaining coal-fired power facility in California and the term largely refers to gas-fired generation. Lower power imports Even as California’s total power demand rose, power imports into California dropped 36% to 85 GWh on June 28 from 133 GWh on June 26. Month-to-date daily power imports have averaged 125 GWh/d. The geographically expansive nature of the heat wave has meant that the Pacific Northwest’s power and gas demand increased at the same time as Southern California. Portland and Seattle saw record-breaking temperatures over three consecutive days, beginning June 26 and peaking June 28 at 116 Fahrenheit and 108 F, respectively, according to the US National Weather Service. The “historic” and “unprecedented” heat wave, the US National Weather Service said June 29, resulted in excessive heat warnings, watches and advisories throughout most of the Northwest, Great Basin and California.

Nearly 400 gallons of oil spilled near Discovery Bay Yacht Harbor – The Coast Guard, California Department of Fish and Wildlife and Contra Costa County Fire Department responded to a diesel spill at Discovery Bay, near Stockton, on Monday morning. The Coast Guard Sector San Francisco watchstanders received notification around 10 a.m. from the National Response Center that approximately 400 gallons of gasoline spilled near the Discovery Bay Yacht Harbor. According to the Coast Guard, the leak came from a fuel line in the marina, and the fuel line was shut off after hundreds of gallons spilled. The Discovery Bay Yacht Harbor crew used oil absorbent tools for the area affected by the spill. The Coast Guard said it is currently investigating the cause of the spill. University of California Davis, Oiled Wildlife Care Network responded as well to care for the two Canada geese exposed to the oil spill. The Coast Guard said the geese were recovered and taken to a rehabilitation facility. The Oiled Wildlife Care Network asks that anyone with information regarding more wildlife affected by this oil exposure contact the network at 1-800-823-6926. No people were reported to be harmed by the oil spill.

Container vessel detained over oil spill -Container vessel detained over oil spill Container ship CSS Wind has been detained pending the payment of costs incurred for the cleanup of an oil spill from one of its containers on Wednesday. An estimated 2,000 litres of heavy crude oil had flowed into the sea at Gordon Cay. The ship should have left the Port of Kingston on Friday but has been prevented from doing so. Director of the Environmental Management and Conservation Division at National Environment and Planning Agency, Anthony McKenzie, told The Gleaner on Sunday that the agency took out an enforcement order against the ship and its local agent Perez y Cia Jamaica, barring the vessel from leaving port until the full cleanup costs have been determined. “We haven’t concluded on that yet, we will conclude earlier in the week. So the ship is not able to move at this time.” Captain Steven Spence of the Maritime Authority of Jamaica (MAJ) said the agency’s investigation found that the hazardous liquid was stored in flexi bags, as against the conventional method of storage tankers, and that the bags fell victim to Jamaica’s high tropical temperature. “I think that due to the high temperature there was some sort of explosion because I can see other containers bulging and there was a spill of about 2,000 litres of the liquid.” Spence further explained that instead of being placed in the cargo hold, the container was being transported on the ship’s deck and expressed concern about the fact that there were at least 21 more flexi bags on board. He said the bags would not be allowed to continue the journey in this way. “I understand that the cleanup went very well but there are still more containers on board the vessel and those containers need to be discharged. They have to be discharged because it wouldn’t be safe for the vessel to travel because there are other containers which are bulging,” said Spence. The incident reportedly occurred while crew members were conducting what should have been routine bunkering operations, which involves either taking on or discharging fuel, and that during the exercise, the liquid coated the starboard hull, plating it and entered the sea. The ship, which has a gross tonnage capacity of 9,978, was also served with a detention order by the MAJ under the Port State Control Regime, which empowers it to hold the vessel in port pending the completion of investigations or if it has any doubts that the vessel may be a danger to navigation. “The decision to detain a vessel is not something that we do lightly because the cost to the shipping company can be very high and you have to make sure it is not a spurious detention. You have to really have good cause and in this case, they spilled hazardous material, heavy oil into the sea,” said Brady.

Panic grips residents as oil pipeline leaks in Lagos–Fear gripped the residents of Ijeododo Road, Igando, Alimosho, Local Government Area, Lagos, on Saturday, following a Premium Motor Spirit, PMS, popularly, called petrol, pipeline leakage in the area.The incident which occurred in the afternoon when some of the residents noticed the leakage at Igando enroute Ijeododo road and raised the alarm.Eyewitnesses account said as soon as the leakage was noticed after the heavy downpour, some of the residents on apparent fear started running helter-skelter.The Director-General, Lagos State Emergency Management Agency, LASEMA, Dr. Femi Oke-Osanyintolu, confirmed the development.Oke-Osanyintolu, at press time, 4pm, however, said the situation has been brought under control as emergency responders comprising of Lagos Fire and Rescue Services,LASEMA, and men of the Nigeria Police are at the sight of the leakage to prevent possible explosions in the area as people were advised to stay away from the area.”The agency has activated its response plan to the above. Members of the public are to exercise caution. All stakeholders are on ground to prevent a secondary incident,” Oke-Osanyintolu stated.

ONGC’s crude oil pipeline leaks into agricultural field near Mannargudi, paddy cultivation affected – Paddy seeds sown on a field at Melapanaiyur near Mannargudi were affected due to a leak in the crude oil pipeline of the Oil and Natural Gas Corporation (ONGC). The oil spill was noticed by the land owner, Sivakumar on Wednesday morning when he arrived at the field to irrigate the kuruvai crop cultivated by him through the direct sowing method. Immediately, ONGC officials were informed about the development and they started necessary work to plug the leak. Meanwhile, Mr.Sivakumar told reporters that only a compensation of ₹10 lakh would help negate the loss he had suffered now and in view of the contamination of the soil due to the oil leak, since it would take years to revive soil health. He said he had spent several thousands of rupees in sowing the kuruvai paddy seeds on his eight acres of land at Melapanaiyur. Talking to reporters, the village panchayat president, Jeevanandam demanded that the oil pipelines laid through the agriculture fields in the village be removed since they were laid two decades ago. Further, removal of the oil pipeline network would alone justify the declaration of the Delta districts as a protected agriculture zone, he maintained.

Kaohsiung oil spill drifts farther south – An oil spill in waters near Kaohsiung has expanded farther south, with the spill covering 290km2 of ocean as of Saturday. The spill occurred after a pipe cracked while it was connected to a tanker delivering oil to CPC Corp, Taiwan’s (CPC) Dalin refinery in Kaohsiung on Tuesday, the state-owned utility said. The pipe was split by large waves, the utility said, apologizing and taking responsibility for the spill. The oil slick stretches from the waters off Siaoliouciou (å°ç‰çƒ) to Pingtung County’s Checheng Township (車城), residents said. They said they were worried that the oil would drift farther south and affect waters near Kenting National Park in Pingtung County’s Hengchun Township (æ†æ˜¥), which contains valuable coral ecosystems. Hengchun Township Mayor Chen Wen-hung (陳文弘) and local fishers, as well as the offices of Democratic Progressive Party legislators Chou Chun-mi (周春米) and Chuang Jui-hsiung (莊瑞雄), have urged the CPC to clear the spill quickly. While the oil slick is not as severe as one caused by the Greek cargo ship Amorgos in 2001, it has affected a wider sea area, Kenting National Park Administration deputy director Hsu Shu-kuo (許書國) said, adding that the oil might affect coral reefs near the coastline. After the spill is cleaned up, the agency plans to commission researchers to examine underwater ecosystems, he said. The spill contains liquefied petroleum gas, gasoline, kerosene, diesel and other fuels – 10 to 15 percent is lighter substances that can evaporate in a couple of days, the Ocean Conservation Administration said.

Why Did Iraq Pull The Plug On Its $2 Billion Oil Deal With China? –Just when it looked like Iraq was becoming a regional leader it decided to halt a $2 billion pre-paid oil supply deal with China’s state-owned Zhenhua Oil Co. despite aims to strengthen ties with China. Iraq decided to end a deal with Zhenhua and sell its crude supply to other customers as oil prices continue to rise. The deal with the Chinese company, that was agreed upon earlier this year, would have seen 4 billion bpd of oil supplied each month. The oil was expected to be ‘destination free’, meaning Zhenhua could sell it to other companies.However, government officials in Iraq are making the country’s budget priority clear as the State Organization for Marketing of Oil (SOMO) deputy director-general Ali al-Shatari stated, “For the time being we may say it is not applicable at this stage because of oil prices, which are high and we are in a better position and we are even generating additional profits in excess of what the Iraqi budget needs.”The end of the Zhenhua deal follows recent announcements of big oil backing away from Iraq. Earlier this month, oil super-major, BP (-3.15%), said it wanted to change its operations in Iraq’s supergiant Rumaila oil field, to create a stand-alone company. U.S. super-major ExxonMobil (-2.55%) announced its intention to withdraw from Iraq’s West Qurna 1 oil field. And Royal Dutch Shell (-3.68%) got out long ago, ceasing operations in Iraq’s supergiant Majnoon oil field in 2017 and West Qurna 1 in 2018. There are several reasons for the Western supermajors’ exit from Iraq, including the movement away from traditional oil and gas towards low-carbon projects, persistent corruption in Iraq’s oil industry, and China’s dominance of Iraqi oil. However, we mustn’t overlook the fact that oil prices in Iraq have been steadily increasing since the beginning of the year, as the government promises higher export levels. SOMO’s crude was going for $65.842 a barrel in May, up 23.5% from January. And now Iraq is expecting as much as $80 a barrel, although no timeframe has been given for this confident prediction.

Oil prices could skyrocket if OPEC+ fails in pledge to deliver more supply – OPEC heads into Thursday’s meeting with Russia and other allies with a better command of world oil prices than it has had in years, analysts said. OPEC+, the organization of oil-producing countries and its allies, is expected to consider adding between 500,000 and 1 million barrels per day, but analysts said there is some talk it may consider no increase. Reuters reported that an internal OPEC report points out that the market could fall back into an oil glut after the group reverses its 6 million barrels a day of production cuts by April 2022. The report gave a boost to oil prices Wednesday. Brent crude futures, the international benchmark, were trading just over $75 a barrel Wednesday. West Texas Intermediate crude futures for August were just under $74 a barrel, around their highest level since the fall of 2018. Oil prices rose Wednesday on a report of lower U.S. inventories. “This is their most important meeting in over year. They were staring down a grave situation with negative pricing last year, and they came together,” Again Capital partner John Kilduff said. “The plan has been to return 500,000 barrels a month, and I think they’ll stick to that. It’s working for them because prices keep going higher and higher.” OPEC is expected to consider extending its current production accord beyond the existing April 2022 end date, and analysts widely expect it to return 500,000 barrels to the market in August. “To me, the interesting story is if they roll over current cuts, how high do [prices] go. It’s being discussed in terms of the potential options,” RBC head of global commodities strategy Helima Croft said. She said the market has already priced in 500,000 barrels a day of additional production, and if it was higher than expected, prices would fall slightly. Croft said OPEC+ has become more flexible since Covid, and it can quickly adjust when it sees how big factors will affect the market. For instance, the U.S. and Iran have been discussing a new nuclear accord. If that happens, Iran could return at least 1 million barrels a day to the market. The timing of that is unclear, and that oil would have to be absorbed alongside OPEC’s current production later this year if a deal is struck. “OPEC used to move like a battle ship. We had these biannual meetings. It was so hard to convene OPEC” during Covid, Croft said. She noted that OPEC operates now more like the U.S. Federal Reserve, with regular policy-setting meetings. “It means they really have directional control of the market,” she said. The Organization of the Petroleum Exporting Countries, led by Saudi Arabia initiated monthly meetings this year, with the oil market in a state of flux as demand returns. OPEC Secretary General Mohammed Barkindo said Tuesday that OPEC expects demand to rise by 6 million barrels per day this year, with 5 million of that coming back in the second half of the year. “Now with the monthly meeting structure, they’re more like a speedboat as opposed to a battleship. If the Delta variant is really demand-destructive in key geographies, they can reverse course,” Croft said. “To me, this monthly meeting structure has given them flexibility to adjust quickly. And for market participants, everybody has to tune in. They are the story. … This is how things have changed from 2015 when they were written off as irrelevant.” Big changes in the market also changed OPEC, which had to cut production sharply last year as demand cratered and oil prices collapsed. Of less concern has been pressure from U.S. shale producers, who had previously moved aggressively to add new wells every time prices rose.

Oil Falls 2% on Rising COVID-19 Cases, Ahead of OPEC+ Talks –(Reuters) -Oil prices fell 2% to a one-week low on Monday after hitting their highest since 2018 earlier in the session, as a spike in COVID-19 cases in Asia and Europe put a brake on the rally before this week’s OPEC+ meeting. Brent futures fell $1.50, or 2.0%, to settle at $74.68 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.14, or 1.5%, to settle at $72.91. Those declines pushed both contracts out of overbought territory and were their lowest closes since June 18. Earlier in the volatile session, both benchmarks rose to their highest levels since October 2018. “The forecast for oil demand recovery over the summer may be a bit overestimated, and traders are facing a reality check this week as the (COVID-19) Delta variant reached Europe and as an infections surge in Southeast Asia and Australia is bringing back lockdowns,” said Louise Dickson, oil markets analyst at Rystad Energy. Indonesia is battling record-high cases, Malaysia is set to extend a lockdown and Thailand has announced new restrictions. Australia also reported on Sunday one of the highest numbers of locally acquired coronavirus cases this year, triggering lockdowns in some cities. All eyes this week will be on the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, to see what happens at their meeting on Thursday. OPEC+ has increased supply by 2.1 million barrels per day (bpd) of oil from May to July after cutting supplies during the pandemic, and could decide to add more barrels in August after crude prices last week rose for a fifth week in a row. OPEC’s forecasts point to an oil supply deficit in August and the rest of 2021 as economies recover from the pandemic, suggesting OPEC+ has room to raise output. Analysts at Australian bank ANZ and Dutch bank ING said they expect OPEC+ to increase output by about 500,000 bpd in August.

Oil Steadies as OPEC Fuels Demand Hopes Amid New COVID-19 Worries (Reuters) – Oil prices steadied on Tuesday as broad hopes for a demand recovery persisted, fueled by comments from OPEC’s secretary general, slightly overshadowing travel curbs due to new outbreaks of the highly contagious Delta variant of the coronavirus. Brent crude futures settled up 8 cents, or 0.1%, at$74.76 a barrel, having slumped by 2% on Monday. U.S. West Texas Intermediate (WTI) crude futures settled up 7 cents, or 0.1%, at $72.98 a barrel, after a 1.5% retreat on Monday. Demand in 2021 was expected to grow by 6 million barrels per day (bpd), with 5 million bpd of that in the second half, OPEC Secretary General Mohammad Barkindo told Tuesday’s meeting of the Joint Technical Committee of OPEC+, an alliance made up of OPEC states, Russia and their allies. “The current ‘wild card’ factor is the ‘Delta Variant’ of the pandemic that is resulting in rising cases and renewed restrictions in many regions,” he said in a speech, a copy of which was seen by Reuters. The producer group is expected to gradually ramp up production in response to demand. “Barkindo’s comments suggest that OPEC is not going to raise production quickly enough to keep up with demand,” OPEC’s demand forecasts show that in the fourth quarter global oil supply will fall short of demand by 2.2 million bpd, giving the producers some room to agree to add output. The market expects the rollout of vaccination programmes to brighten the demand outlook, even as the new variant rises, analysts said. “The narrative of the past few months has not changed: the war against the virus is being gradually won, the global economy and oil demand are recovering,”

Crude oil futures higher on bullish API crude draw, market awaits OPEC+ meeting — Crude oil futures rose during the mid-morning trade in Asia June 30, as data from the American Petroleum Institute showed a large draw in US crude inventories, and as the market eagerly awaited the July 1 OPEC+ meeting. At 11:13 am Singapore time (0311 GMT), the ICE August Brent futures contract was up 43 cents/b (0.58%) from the previous close at $75.19/b while the NYMEX August light sweet crude contract was up 49 cents/b (0.67%) at $72.98/b. The data released by the American Petroleum Institute led to some bullishness in the market, as it showed a draw of 8.15 million barrels in the US crude inventories for the week ended June 25. The data was less positive with regards to downstream products inventories, showing gasoline and distillate inventories rising by 2.42 million barrels and 428,000 barrels, respectively. The market, however, was not swayed by the product builds, as they could be attributed to rising refinery utilization, which S&P Global Platts Analytics expects to have averaged 16.35 million b/d in the week ended June 25, up from an EIA-reported 16.11 million b/d during the week prior. The market remains optimistic about US products demand, and especially gasoline demand, with Apple Mobility data showing the US driving activity staying near record levels at 162% of the January 2020 baseline in the week ended June 25. The market will now be awaiting more comprehensive data from the Energy Information Administration, due to be released later June 30, for more pricing cues. Meanwhile, the market has its eyes set on the July 1 OPEC+ meeting, after the July 29 Joint Technical Committee provided little definite guidance into the producer group’s production plans for August. Despite calls for higher production, analysts generally expect the coalition to raise production moderately by 500,000 b/d in August, especially as the resurgence in COVID-19 infections due to the delta variant of the coronavirus threatens demand, and as the threat of additional barrels from Iran following a possible Joint Comprehensive Plan of Action deal hangs over the market. “Russia apparently is leading a group of countries that want to [increase] output. Saudi Arabia is taking a more cautious approach, with Energy Minister, Prince Abdulaziz bin Salman, cautioning [that] it’s not clear whether oil prices were rising due to real supply and demand or because of expectations and trajectories that are excessively optimistic,” ANZ analysts said in a June 30 note.

Oil Jumps Ahead Of OPEC+ On Speculation Oil Supply Deal May Be Extended –Brent jumped back over $75 this morning – cementing a stellar first half for oil which saw oil prices rise by 50% for its best half since 2009 – pushed higher by a Reuters report that OPEC+ is expected to discuss the extension of the oil supply deal beyond April 2022 following earlier reports that some minsters are concerned about an oversupplied market in 2022. The jump reversed however following unconfirmed reports that ahead of tomorrow’s OPEC+ meeting, Russia had expressed its favor for an increase in OPEC+ oil production starting form August, with an increase between 500k-1mln BPD suggested. As OPEC journalist Reza Zandi added, some members disagree with such suggestions out of the fear that COVID might surge again. The market continues to be dominated by what OPEC and its allies will do next with policy makers weighing pressure to increase supply and the medium-term demand effects from the pandemic. The difficulty in coming to a decision can be seen in the delay of preliminary talks until tomorrow morning to allow more time for compromise ahead of the ministerial meeting, also Thursday. Earlier in the session, WTI and Brent hit session lows of $72.82/bbl and $73.93 respectively, in a move that coincided with declines across equities, even as a base emerged thanks to reports that Iranian nuclear talks have been postponed to an unspecified date – suggesting a smaller likelihood of Iranian oil returning to the market in the initially expected time frame. Elsewhere, Tuesday’s OPEC JTC did not provide a recommendation for ministers to consider. The JTC signaled uncertainty about the spread of COVID variants and the speed of vaccine rollouts. It also said that it is monitoring sovereign debt levels, inflation rates, and central bank actions. All*in-all, the technical committee reviewed a range of scenarios and aligned their base case with the June MOMR. Sources suggested Moscow and Riyadh have different views regarding the pace at which oil should be brought back to the market, with the latter favouring a more gradual approach. The Kuwaiti oil minister suggested the group is cautious about raising output amid challenges. The OPEC, JMMC, and OPEC+ meetings are all slated for Thursday at 12:00BST, 15:30BST and 17:00BEST respectively. The JMMC meeting was pushed back with some citing Russian Deputy PM Novak’s calendar, although sources suggested it is to allow for more time to negotiate a compromise (we have included a primer from Newsquawk at the bottom of this post).

WTI Pumps’n’Dumps After 6th Straight Weekly Crude Draw -Oil prices dumped and pumped overnight, testing below $73 and above $74, amid API inventory data, and OPEC+ headlines.“OPEC countries are cautious with regard to output-increase strategy amid oil market challenges,” Kuwait’s Oil Ministry said in a statement on Wednesday.“Any decision the organization will take will be in the interests of producers and consumers.”Bloomberg Intelligence Energy Analyst Fernando Valle notes that despite last week’s massive draws in crude-oil and gasoline inventories, crude prices have stayed relatively flat, signaling some skepticism with the breadth of the recovery. Inventories in China and the Middle East remain elevated, which may contribute to concerns for North American markets. Without a rebound in refined product exports, we believe that refiners are unlikely to increase output in the short term. API:

• Crude -8.153mm (-4.7mm exp)
• Cushing -1.318mm
• Gasoline +2.418mm (-700k exp)
• Distillates +428k (+100k exp)

DOE

• Crude -6.718mm (-4.7mm exp)
• Cushing -1.46mm
• Gasoline +1.522mm (-700k exp)
• Distillates -869k (+100k exp)

Analysts correctly predicted a 6th straight week of crude draws (but the official data was smaller than API) and gasoline stocks unexpectedly rose.,.. WTI hovered between $73 and $74 ahead of the print and barely budged after… Update: That didn’t last long…

Oil rises on lower U.S. stockpiles, demand recovery – – Oil prices rose on Wednesday, heading for monthly and quarterly gains, after U.S. crude stockpiles fell for a sixth straight week and an OPEC report foresaw an undersupplied market this year. The Brent crude contract for August, which expired on Wednesday, ended the session up 37 cents, or 0.5% at $75.13 a barrel. The September contract rose 34 cents to settle at $74.62 a barrel. U.S. West Texas Intermediate crude (WTI) settled up 49 cents, or 0.7% at $73.47 a barrel. Both benchmarks are just below highs last reached in 2018, and are set to record their seventh monthly gain in the past eight months. WTI rose more than 10% in June while Brent rose over 8%. A Reuters poll showed that Brent was seen averaging $67.48 a barrel this year and WTI $64.54, both up from May’s poll. U.S. crude stockpiles fell last week for the sixth straight week as refiners ramped up output in response to rising demand, the Energy Information Administration said. [EIA/S] Inventories at Cushing, Oklahoma, the delivery point for WTI, slid to their lowest since March 2020, EIA data showed. “With continued decline of Cushing crude oil inventories and an upcoming OPEC+ meeting tomorrow, I expect crude oil prices will rise as the market has been crying out for more supplies,” The Organization of the Petroleum Exporting Countries and its allies, an alliance known as OPEC+, meet on Thursday. The group is expected to discuss extending its deal on cutting oil supply beyond April 2022. An internal OPEC report seen by Reuters said the oil market would be in deficit in the short term but a glut was on the horizon once the OPEC+ supply cuts ended. Hopes for a broad recovery received a boost from OPEC Secretary General Mohammad Barkindo, who said on Tuesday that demand is expected to rise by 6 million barrels per day (bpd) in 2021, with 5 million bpd of that coming in the second half of the year. (GRAPHIC: Global oil supply deficit in 2021 – https://fingfx.thomsonreuters.com/gfx/mkt/xegpbzydapq/Pasted%20image%201624878145906.png) Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd by the end of 2021, leaving a 5 million bpd supply shortfall. “But the real fly in the ointment for the bull case is the UK.” Britain recorded a further 26,068 cases of COVID-19 on Wednesday, the highest daily figure since Jan. 29 and sending the seven-day tally up 70% from the week before, official data showed.

U.S. crude oil prices top $75 a barrel, the highest since 2018 – Oil prices broke above $75 a barrel on Thursday to a near three-year-high ahead of a decision from key producers on production policy for the second half of 2021. U.S. West Texas Intermediate crude for August settled up 2.4%, or $1.76, at $75.23 a barrel, hitting its highest level since October 2018. The international benchmark Brent crude for September climbed 2%, or $1.49, to $76.10 per barrel. The WTI has climbed more than 50% on the year after starting 2021 at around $48.5 per barrel. Demand has increased as people take to the roads amid the economic reopening, and a rebound in goods transportation and air travel also have supported prices. Gasoline prices are jumping on the back of a post-pandemic driving spree and $75 crude prices could mean even higher prices at the pump. The current average price for a gallon of unleaded gasoline is at $3.123 per gallon, compared to $2.179 per gallon a year ago, according to AAA. The advance came ahead of a meeting among OPEC and non-OPEC partners, an energy alliance often referred to as OPEC+, who have been positive about improved market conditions and the outlook for fuel demand growth following a sharp rebound in oil prices this year. OPEC+ meeting has been postponed to Friday. Jeff Currie, global head of commodities research at Goldman Sachs, said on CNBC’s “Worldwide Exchange” that the expected OPEC production hike of 500,000 barrels per day might not be enough to keep prices down. “During the month of June, we estimate that the market was in a 2.3 million barrel per day deficit… The bottom line, demand is surging as we head into the summer travel season, and that is against a nearly inelastic supply curve,” Currie said. Just over a year ago, WTI futures plunged into negative territory for the first time on record as the coronavirus pandemic took hold, shutting down economies worldwide. Bank of America recently said oil can climb all the way to $100 per barrel amid accelerating demand.

Oil Prices End Trading Day Above $75 – — Oil advanced, closing above $75 a barrel for the first time since 2018, with an OPEC+ deal left in limbo after producers earlier signaled a tentative agreement to only gradually increase supplies through the end of the year. Futures in New York jumped 2.4% on Thursday, the biggest gain in more than a week. Talks among the OPEC+ alliance ended Thursday with no final agreement on production policy, with the United Arab Emirates raising a last-minute objection to the deal. However, the group earlier appeared to have an agreement in principle to boost output by 400,000 barrels a day each month from August to December. Ministers will reconvene on Friday. “These are cat-herding exercises to a certain extent with getting a couple dozen ministers to agree on pretty much a single number,” said Peter McNally, global head of industrials, materials and energy at Third Bridge. “These things always take time.” Oil posted the best half since 2009 as prices grind higher, aided by a global recovery taking place from the U.S. to Europe and China. Crude inventories in the U.S. are falling at the fastest rate in decades with shale producers and the OPEC+ alliance remaining disciplined. Citigroup Inc. expects the oil market to remain in a deep deficit even after accounting for higher OPEC+ output through the summer. The OPEC+ preliminary agreement was upended by the United Arab Emirates, which said it would only give its support if the baseline for its own cuts was raised considerably, delegates said, asking not to be named because the talks were private. The UAE’s cuts are measured from a starting point in 2018, which set the country’s maximum capacity at 3.168 million barrels a day. But expansion projects have since raised that number to about 4 million barrels a day. Reflecting that new capacity in its baseline could allow it to pump hundreds of thousands of barrels a day of extra crude while technically remaining in compliance with its obligation to cut. West Texas Intermediate for August delivery climbed $1.76 to settle at $75.23 a barrel. Brent for September settlement rose $1.22 to end the session at $75.84 a barrel. Brent’s prompt timespread is 88 cents a barrel in backwardation compared with 75 cents a week ago. Along the oil futures curve, the market structure strengthened and timespreads moved deeper into backwardation, a sign of supply tightness. West Texas Intermediate crude for September delivery closed at a $1.27 premium to its October contract, the strongest in about three years. The sharp gains at the front end of the futures curves for Brent and WTI are a sign that traders are banking on extreme market tightness in the coming weeks.

Oil Steady While Traders on Sidelines as OPEC+ Talks Drag On – Oil prices steadied on Friday as OPEC+ ministers resumed talks on raising oil output the day after the United Arab Emirates blocked a deal, which could delay plans to pump more oil through the end of the year. Brent crude futures rose 33 cents to settle at $76.17 a barrel, after rising 1.6% on Thursday, while U.S. West Texas Intermediate (WTI) crude futures fell 7 cents to settle at $75.16 a barrel, having jumped 2.4% on Thursday to close at their highest since October 2018. On Thursday, both benchmark contracts rose after OPEC+ sources said the group aimed to hike output by less than expected. OPEC+ are set to meet again on Monday after UAE opposed the proposals, which also included extending the pact on output to the end of 2022. The long rally in prices could be undermined if OPEC+ nations go their separate ways and add to supply as they see fit. WTI was on track for a 1.5% rise for the week, with the U.S. crude market expected to tighten as refinery runs pick up to meet recovering gasoline demand. Brent was largely steady on the week, as the market assessed fuel demand concerns in parts of Asia where cases of the highly contagious COVID-19 Delta variant are surging. Also, the rise in oil prices is contributing to global inflation, slowing the economic recovery from the coronavirus crisis. Citi analysts said they do not expect WTI to climb to a premium to Brent as they project U.S. oil output to pick up at the end of 2021 and grow further in 2022. Meanwhile, the number of U.S. oil rigs, an early indicator of future output, rose by four, to 376 in the week to July 2, its highest since April 2020, according to energy services firm Baker Hughes Co.

OPEC+ ends Friday’s meeting without a deal, to seek agreement Monday on oil output policy – OPEC and non-OPEC ministers finished Friday’s meeting without a resolution and they will meet again on Monday on oil output policy, CNBC’s Brian Sullivan reported. The energy alliance, often referred to as OPEC+, met via videoconference on Friday afternoon to decide on whether to keep output policy unchanged or to ramp up supply further. OPEC+ except for the United Arab Emirates agreed to an easing of cuts and their extension to the end of next year, according to Reuters citing an OPEC+ source. The UAE said the extension is conditional to revising its baseline production, Reuters reported. Oil prices moved on the news, rising slightly Thursday before losing momentum Friday as traders digested the implications. International Brent crude futures traded at $76.03 a barrel, up 0.2% for the session, while U.S. West Texas Intermediate futures settled 7 cents lower at $75.16 a barrel Friday. The OPEC alliance had agreed in principle to increase supply by 400,000 barrels per day from August to December 2021 in order to meet rising demand, Reuters reported, citing unnamed OPEC+ sources. OPEC kingpin Saudi Arabia and non-OPEC leader Russia had also proposed extending the duration of cuts until the end of 2022, according to Reuters. However, Reuters reported that the UAE opposed these plans on the grounds that OPEC+ should change the baseline for cuts, effectively raising its production quota. Neil Atkinson, an independent oil analyst, told CNBC’s “Squawk Box Europe” on Friday that tensions between the UAE and other OPEC+ members had been “bubbling under for quite some time now.” “The Abu Dhabi National Oil Company has been investing in new capacity, it’s been taking a more active role in trading,” he said, adding that it has perhaps started operating more like an international oil company than a national oil company. Unlike international oil companies, decisions taken by national oil companies tend to be influenced by the state. “They look to the future, they see demand for oil continuing to grow in the medium term, they’ve installed more capacity and they want a greater share of that market as we move through the 2020s,” he added. Analysts at risk consultancy Eurasia Group said they believe the oil producer group is still likely to reach a deal. “The UAE might be negotiating but it is unlikely to muster courage to risk it all till the very end. It will want to avoid sabotaging an OPEC+ agreement and potentially being blamed for a rise in oil prices that increases global inflation,” the analysts said Friday, noting that the UAE’s own relationship with Asian energy clients could suffer if prices continue to increase. “While a UAE withdrawal from OPEC+ should definitely not be dismissed, such a decision would be surprising. Such a move would compromise Abu Dhabi’s relationship with Riyadh, its broad positioning in the region, and its ability to build alliances over the long-term. Therefore, compromise appears to be the most likely outcome.” OPEC+, which is dominated by Middle East crude producers, agreed to implement massive crude productions cuts in 2020 in an effort to support oil prices when the coronavirus pandemic coincided with a historic fuel demand shock.

OPEC+ seeks agreement on oil output policy after initial talks end in disarray – OPEC and non-OPEC ministers finished Friday’s meeting without a resolution and they will meet again on Monday on oil output policy, CNBC’s Brian Sullivan reported. The energy alliance, often referred to as OPEC+, met via videoconference on Friday afternoon to decide on whether to keep output policy unchanged or to ramp up supply further. OPEC+ except for the United Arab Emirates agreed to an easing of cuts and their extension to the end of next year, according to Reuters citing an OPEC+ source. The UAE said the extension is conditional to revising its baseline production, Reuters reported. Oil prices moved on the news, rising slightly Thursday before losing momentum Friday as traders digested the implications. International Brent crude futures traded at $76.03 a barrel, up 0.2% for the session, while U.S. West Texas Intermediate futures settled 7 cents lower at $75.16 a barrel Friday. The OPEC alliance had agreed in principle to increase supply by 400,000 barrels per day from August to December 2021 in order to meet rising demand, Reuters reported, citing unnamed OPEC+ sources. OPEC kingpin Saudi Arabia and non-OPEC leader Russia had also proposed extending the duration of cuts until the end of 2022, according to Reuters. However, Reuters reported that the UAE opposed these plans on the grounds that OPEC+ should change the baseline for cuts, effectively raising its production quota.Neil Atkinson, an independent oil analyst, told CNBC’s “Squawk Box Europe” on Friday that tensions between the UAE and other OPEC+ members had been “bubbling under for quite some time now.” “The Abu Dhabi National Oil Company has been investing in new capacity, it’s been taking a more active role in trading,” he said, adding that it has perhaps started operating more like an international oil company than a national oil company. Unlike international oil companies, decisions taken by national oil companies tend to be influenced by the state. “They look to the future, they see demand for oil continuing to grow in the medium term, they’ve installed more capacity and they want a greater share of that market as we move through the 2020s,” he added. Analysts at risk consultancy Eurasia Group said they believe the oil producer group is still likely to reach a deal. “The UAE might be negotiating but it is unlikely to muster courage to risk it all till the very end. It will want to avoid sabotaging an OPEC+ agreement and potentially being blamed for a rise in oil prices that increases global inflation,” the analysts said Friday, noting that the UAE’s own relationship with Asian energy clients could suffer if prices continue to increase. “While a UAE withdrawal from OPEC+ should definitely not be dismissed, such a decision would be surprising. Such a move would compromise Abu Dhabi’s relationship with Riyadh, its broad positioning in the region, and its ability to build alliances over the long-term. Therefore, compromise appears to be the most likely outcome.”

How Much Oil Can Saudi Arabia Really Produce? So to the actual oil crude oil production numbers: as highlighted above, the average amount of crude oil that Saudi Arabia was able to pump from 1973 to last month was 8.162 million bpd. That is it, there is no equivocation on that number, and no account is taken within that number of the unverifiable claims of any other ‘oil equivalents’ that Saudi likes to throw into any questioning of that number in order to further obfuscate the issue. If this – correct – number is used as the basis for discussion then all of Saudi Arabia’s subsequent activities make perfect sense. Most tellingly in this regard, the question often asked around the time of the firstSaudi-instigated oil price war from 2014-2016 that was aimed at destroying the then-nascent U.S. shale oil threat to Saudi was: ‘Why didn’t the Saudis pump more oil to crash prices more?’ After all, the Saudi strategy was for it and all other OPEC members to pump as much crude oil as possible to push oil prices as low as possible to cause as many bankruptcies as possible in the U.S. shale oil sector. The fact of the matter is that the Saudis did pump everything it could at that point. It pumped its usual 8.1 and a bit million bpd, plus it pumped to the maximum on all of its other fields, plus it used its oil in storage but despite all of that it was not able to produce more than around 10 million barrels per day of oil at any point for more than a few months or so (basically until its storage ran out and it had to rely on genuine production from the wellheads). Given that what was at stake in the 2014-2016 oil price war was the long-term future of Saudi Arabia as a significant power in the Middle East and the world, if it could have pumped one drop of oil more over that period then it would have. This leads to Saudi’s nonsensical claims about its spare capacity. These claims have been based on the foundation that its base crude oil production is around 10 million bpd rather than the 8.162 million bpd that is factually correct. It did indeed, as mentioned, produce just about 10 million bpd during its existentially important oil price war of 2014-2016 but that was going at absolutely full tilt and included storage volumes. The point here is that spare capacity is precisely that: basically, the extra amount that a country can produce in an emergency if and when required over and above the amount that can be produced with ease every day. The Energy Information Administration defines spare capacity specifically as production that can be brought online within 30 days and sustained for at least 90 days, whilst even Saudi Arabia has said that it would need at least 90 days to move rigs to drill new wells and raise production to the mythical 12 million bpd or 12.5 million bpd level. Abiding by this rule, Saudi Arabia’s genuine spare capacity up to at least the end of 2016 was at most about 2 million barrels per day using 8 million bpd as the base number, so equalling about 10 million bpd in total, which is precisely what it produced when it needed maximum production most (that is, during the 2014-2016 oil price war). The Saudis instead have been using the correct spare capacity of 2 million bpd but adding it to the false baseline production number of 10 million bpd for years, giving a number that it keeps mentioning of total capacity of 12-13 million bpd. Indeed, during its ill-fated 2020 oil price war the Saudi Ministry of Energy said it would increase its maximum sustained capacity to 13 million bpd. So fundamentally wrong is this Saudi number that it was forced to say so in the prospectus for its latest bond Saudi Aramco stated that it has not yet embarked on work to expand its maximum sustained capacity to this 13 million bpd level.

US troops come under fire in Syria after weekend airstrikes — U.S. forces in Syria came under fire on Monday, a day after the Pentagon launched airstrikes on Iran-backed militia groups on the Iraq-Syria border. Col. Wayne Marotto, spokesman for Operation Inherent Resolve, confirmed the attack on Twitter, saying it occurred around 7:44 p.m. local time in Syria. No injuries were reported. Marotto later tweeted that U.S. forces responded by conducting “counter-battery artillery fire at rocket launching positions.” .. The attack comes just one day after the U.S. carried out airstrikes on weapons storage facilities operated by the Iran-backed militia groups Kata’ib Hezbollah and Kata’ib Sayyid al-Shuhada. U.S. military officials believe that the storage facilities were being used for unmanned aerial vehicle attacks against American troops based in Iraq. “At President Biden’s direction, U.S. military forces earlier this evening conducted defensive precision airstrikes against facilities used by Iran-backed militia groups in the Iraq-Syria border region,” the Pentagon said in a statement Sunday. “The strikes were both necessary to address the threat and appropriately limited in scope. As a matter of domestic law, the President took this action pursuant to his Article II authority to protect U.S. personnel in Iraq.

IDF Forces Deploy New Semi-Autonomous Robots To Gaza Border – An armed robot equipped with optical sensors and a 7.62mm machine gun has been spotted on the Gaza border by the Democratic Front for the Liberation of Palestine, a secular Palestinian Marxist – Leninist organization, according to The Times of Israel’s Emanuel Fabian. Israel Defense Forces (IDF) appear to have deployed a new semi-autonomous robotic ground tank called the Jaguar that patrols the Gaza border and removes soldiers out of harm’s way from sniper attacks by Hamas and Palestinian Islamic Jihad groups. The Jerusalem Post said Israel Aerospace Industries’ Elta systems develop the unmanned ground vehicle in close collaboration with IDF’s Ground Forces Command. The Jaguar military robot is on a six-wheeled chassis that is heavy-duty and highly maneuverable, equipped with a weapon station, communications and sensors. A turret is mounted on the front of the robot, firing a 7.62mm MAG machine gun that can be operated remotely.

‘Catastrophe’ warning as Lebanon’s fuel crisis hits hospitals -Dr. Samer Saade’s car ran out of fuel this morning while he was on his way to work at Hammoud Hospital University Medical Center in Sidon, southern Lebanon. “I haven’t been able to fill my car for the past four days,” Saade told Arab News. The emergency room physician, like practically all Lebanese, has been hit hard by the ongoing fuel shortage in the crisis-hit country.Giant queues clogging roads near petrol stations have become a common sight and refueling is limited to 15 or 20 liters, making long-distance travel a thing of the past.The fuel crisis, however, is not only limited to the petrol needed for cars; it has also made its way to the country’s beleaguered electricity grid.Lebanon’s hospitals were already struggling to cope with the coronavirus disease (COVID-19) pandemic before the latest electricity crisis.Now, doctors say, they are being stretched even further with shortages of medical supplies and fuel.”Medicine shortages, equipment shortages, hyperinflation pricing out the poor from getting care – anything that can go wrong in this country will go wrong, basically,” Saade said.At the hospital, state electricity “barely comes on for two or three hours per day,” Saade said, with four private generators needed to fill the gap.Two of Lebanon’s Turkish power barges have been shut down amid an ongoing feud with the parent company, while the other four state-owned power plants are running on fumes.

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