NEWS OF THE DAY:
Shell Makes ‘Significant’ Oil Discovery in Deepwater GoM
Hart Energy Staff, May 11, 2021
Royal Dutch Shell said May 11 it has struck oil pay at the Leopard prospect in the deepwater U.S. Gulf of Mexico (GoM), proving the mature province still has plenty to give explorers.
Located in Alaminos Canyon Block 691, the Leopard well hit more than 600 ft of net oil pay at multiple levels, Shell said in a news release. The discovery was made in a lush oil-producing area known as the Perdido Corridor. It joins the nearby Perdido host, the production hub about 33 miles away for the Great White, Tobago and Silvertip fields. It’s also located near the Blacktip and Whale discoveries, for which Shell said it is moving toward a final investment decision this year.
Paul Goodfellow, deepwater executive vice president for Shell, called the Leopard oil find an exciting addition to the company’s portfolio.
“With our U.S. Gulf of Mexico production among the lowest GHG (greenhouse-gas) intensity in the world, Shell remains confident about the GoM and this latest discovery will help us deliver on our strategy to focus on valuable, high margin barrels as we sustain material upstream cash flows into the 2030s,” Goodfellow said in a company statement.
Serving as operator, Shell owns a 50% stake in Leopard. Partner Chevron USA Inc. holds the remaining interest.
Shell is among the largest deepwater leaseholders in the GoM, where the company produces about 150 million boe per year and operates nine deepwater production hubs.
Oil prices mixed as traders eye gasoline demand and Colonial Pipeline developments
Myra P. Saefong, William Watts, Market Watch, May 11, 2021
Oil futures traded on a mixed note Tuesday with parts of the U.S. suffering from some fuel shortages as Colonial Pipeline works to restore the system that provides 45% of the fuel consumed on the U.S. East Coast by the end of the week.
Crude prices have been seesawing between modest losses and gains during the session, pressured in part by the “realization that the pipeline won’t be closed for long,” said Matthew Parry, head of long-term analysis at Energy Aspects.
The Colonial Pipeline system was shut down late last week following a cyberattack, and has led to some fuel shortages in the Eastern U.S.
“Some refineries in Louisiana and eastern Texas that ship the majority of their output by the pipeline are likely to trim crude runs by up to 20% for a few days to manage inventories, while the pipeline is unable to receive oil products,” Parry told MarketWatch.
However, “given the limited duration of any run cuts and still comfortable levels of oil product inventories in the U.S., the attack may not produce a significant increase in oil product futures prices if the duration of the outage is short lived,” he said.
Colonial on Monday said its goal was to “substantially” restore operations by the end of the week. Colonial closed its 5,500-mile pipeline over the weekend following the ransomware attack.
Exclusive: New project tracks natural gas flaring using space data
Miriam Kramer, Andrew Freedman, May 11, 2021
A new project uses satellite data to track the flares from companies burning off excess natural gas.
Why it matters: Flaring releases carbon dioxide and some methane into the atmosphere, contributing to global warming and making it essential for regulators to keep close tabs on the activity.
- Natural gas flaring and venting hit record highs in the U.S. in 2019, but declined in the midst of the pandemic-induced economic downturn in 2020.
What’s happening: The project — called Flaring Monitor — is able to pinpoint companies that are flaring at any given time and track them against self-reported flaring data given to state regulatory agencies.
- The tool could be particularly useful because it’s able to tie flaring to specific companies, Robert Kendall, the co-founder of Bazean, the company behind the project, told Axios.
- The project makes use of imagery from Planet and data from the VIIRS instrument on NASA’s Suomi NPP satellite, which helps spot tiny hotspots due to flaring as well as larger ones, such as from wildfires worldwide.
Details: Flaring Monitor has already found that Shell appears to be doing better on flaring than some other large energy companies.
- “Shell is clearly making different corporate-level decisions that are resulting in these metrics looking different,” Kendall said.
- Many smaller companies are involved in oil and gas drilling in North Dakota, Texas, Pennsylvania and other states, and Flaring Monitor could allow for better monitoring of them as well.
The big picture: Kendall envisions a future in which companies that have a lower carbon intensity for their commodities could have a premium on their stock price because of granular data like this.
What’s next: According to Kendall, the company hopes to take the project global eventually, monitoring flaring in other locations aside from the U.S. to help hold other governments and companies accountable and aid in emissions cuts.
Gold price holds near 3-month high as inflation expectations rise
Mining.Com, May 11, 2021
Gold prices held close to three-month highs on Tuesday, as investors weighed rising inflation expectations and comments from Federal Reserve officials for clues on monetary policy going forward.
Spot gold dropped slightly by 0.2% to $1,831.42/oz as of 11:50 a.m. ET, after reaching $1,841.39 earlier in the session, the highest since mid-February. US gold futures fell by 0.3% to $1,831.90/oz in New York.
Meanwhile, bond market expectations for the pace of inflation over the coming half decade surged earlier in the week to the highest since 2006. The jump in the five-year breakeven rate comes amid a run-up in commodities and adds to a longer-term uptick in inflation bets that’s been fueled by improving prospects for growth and pandemic-related stimulus measures.
However, the “inflation expectations are already elevated and will move lower,” Georgette Boele, a senior precious metals strategist at ABN Amro Bank NV, told Bloomberg.
Gold’s “rally is running out of steam just below the 200-day moving average at $1,850 an ounce,” she added.
Bullion posted the biggest weekly gain since November last week after a report showed a surprise slowdown in US job growth, supporting the case for continued economic stimulus and low interest rates.
Investors will be watching for the US CPI report due Wednesday, which is forecast to show prices continued to increase in April.
Alaska’s first plan to spend $1 billion in federal aid is being scrapped
James Brooks, Anchorage Daily News, May 10, 2021
Members of the Alaska Legislature are preparing to scrap a plan to use hundreds of millions in federal economic aid after new guidelines released Monday by the U.S. Department of the Treasury made the idea unaffordable.
The first-draft plan proposed by members of the state House would have spent about $700 million this year to boost the Permanent Fund dividend, on infrastructure, and aid for tourism, nonprofits and some businesses. Funding would come from $1 billion Alaska is expected to receive from the American Rescue Plan passed by Congress in March. The remaining $300 million would have been saved for next year.
But the new federal guidelines say that Alaska and some other states will receive their money in two batches: half this year and half the next.
“Right now we have 70% allocated. But we can fix that on the Senate side,” said Rep. Neal Foster, D-Nome and co-chair of the House Finance Committee.
The plan is included in the state’s annual operating budget, which passed the House late Monday.
House Minority Leader Cathy Tilton, R-Wasilla, said she expects the Senate to fix the issue.
“I have faith that the Senate can address it,” she said.
Sen. Click Bishop, R-Fairbanks and co-chair of the Senate Finance Committee, said he isn’t sure when the Senate will introduce a plan for spending the available $500 million, and he doesn’t know what it will contain.
Monday’s guidelines say that states’ flexible payments will be distributed in two batches unless a state has an unemployment rate at least 2% higher than its unemployment rate in February 2020.
“According to the AK Department of Labor, the most recently reported unemployment rate (March 2021) is 6.6% and our February 2020 unemployment rate was 5.1%. This means Alaska does not meet that criteria and will receive its funding in two tranches,” said Jeff Turner, a spokesman for Gov. Mike Dunleavy.
Bishop said that even before the guidelines were revealed Monday, senators had been interested in spending less than proposed by the House.
The Legislature is scheduled to adjourn on May 19, and Tilton said that despite the late change, she believes lawmakers can finish their work on time.
“At this particular point in time, our caucus is still not favorable towards extending session or having a special session. But we’ll just have to see what happens as we get closer to the end,” she said.
Are we returning to the Solyndra Syndrome of 2009? Rosy promises and billions wasted?
Ron Richter, Sheridan Media, May 7, 2021
As a candidate, President Biden promised his “Build Back Better Recovery Plan” would create 10 million jobs – including millions in the resilient infrastructure and clean energy fields. These bold words echo promises made by President Obama and then-Vice President Biden in response to the “Great Recession,” in 2009. The partisan American Recovery and Reinvestment Act included $90 billion for green jobs and billions more for the failed-Cash for Clunkers program. After funds were distributed, companies like Solyndra, A123 Systems, Beacon Power, and others went belly up and billions of taxpayer dollars were wasted.
During the tepid recovery from the 2009 “Great Recession,” the oil and gas sector was the one bright spot, creating jobs at a rapid pace. By the end of 2013, non-farm employment was an anemic 1.9 percent above where it was at the end of 2009. Comparatively, oil and gas employment was nearly 16 percent higher. This strong output and robust job growth led to the United States becoming the globe’s leading producer of oil and gas, making America more energy secure.
Instead of embracing what works—and what actually puts people to work—the president is set on making the same mistake as the Obama-Biden administration. The administration is even going as far as reviving the Cash for Clunkers program. The president’s push for green energy comes at the same time that his policies intentionally are killing American jobs in the traditional energy sector. The president’s executive order to revoke the permit for the Keystone XL pipeline ended the prospect of 11,000 American jobs, in 2021 alone. His moratorium on oil and gas production on public lands has the potential to kill a million jobs and jeopardize the nearly $10 billion in annual revenue generated on federal lands in FY 2019. Western states, like New Mexico and Wyoming, which depend on this revenue to help fund essential services like schools could see disbursements from oil and gas production on federal lands evaporate. About $1.1 billion and $430 million, respectively, will be put at risk under a ban.
The president’s climate czar, John Kerry, assures us “. . . the choice of doing the solar power one now is a better choice. And similarly, you have the second-fastest-growing job pre-COVID was wind turbine technician.” By 2029, however, the Bureau of Labor Statistics (BLS) expects solar and wind turbine technician positions to grow by a combined 10,400 new jobs. These pale in comparison to the 37,400 new oil and gas jobs BLS expects over the same time span.