Factors such as the war in Ukraine, which has led to sanctions against Russia, China’s lifting of Covid policies and natural disasters are also playing a role in the market forces of supply and demand. Global recession is still viewed by some market analysts as a matter of when rather than if it will occur. ****************************************************** BLM recommends smaller footprint for Willow project to ConocoPhillips In its final supplemental environmental impact statement (SEIS), the U.S. Bureau of Land Management recommended to ConocoPhillips to eliminate one of its five planned drill sites for the proposed Willow development in Alaska’s National Petroleum Reserve and defer another to reduce the impact on migratory birds and caribou.The SEIS, which required additional environmental analysis, was conducted after a federal district court vacated a prior approval in August 2021. Willow would affect the environmentally sensitive Teshekpuk Lake area, as well as freshwater use and the length of pipelines, gravel and ice roads. BLM recommendations notwithstanding, the Department of the Interior said in a press release that it had “substantial concerns about the Willow project … including direct and indirect greenhouse gas emissions and impacts to wildlife and Alaska Native subsistence,” so final approval of the project remains uncertain. ****************************************************** Cause of Keystone Pipeline December 2022 Leak Determined TC Energy released an independent lab analysis in February that revealed the pipeline rupture in Kansas was caused by a combination of a faulty weld connecting 2 sections of the 36-inch pipe, and “bending stress fatigue”. Over 500,000 gallons of crude oil spilled down a hill and into a creek, triggering the entire pipeline to be shut down. Remediation is underway.
methane, and other related emissions have been declining substantially over the last few years and operators are focused on continued good environmental stewardship.” ****************************************************** Washington May Find Refilling the SPR a Challenge Over 221 million barrels of oil were drawn from the Strategic Petroleum Reserve (SPR) in 2022, bringing it to its lowest level in four decades according to data from the U.S. Energy Information Administration. The Department of Energy (DOE) planned to establish a pilot program in February 2023 to purchase 3 million barrels; however, rejected the first offers on the grounds that they failed to meet requirements or were too expensive. The DOE hoped that the price of oil would settle at about $70 per barrel for the pilot program to fix a price at which sellers could make future deliveries. A statement from the DOE advised: “DOE will only select bids that meet the required crude specifications and that are at a price that is a good deal for taxpayers.”“Following review of the initial submission, DOE will not be making any award selections for the February delivery window.” Even at $70 per barrel, the DOE may not have enough funding to completely refill the SPR. ****************************************************** Turbulent Year Predicted for Oil and Gas Because of decarbonization plans, governments have been caught between commitments to transition away from fossil fuels and attempting to encourage more oil and gas production, which would also increase energy security. Record profits posted by oil and gas companies in 2022 led European governments to impose windfall taxes. In the face of competing priorities, companies are reluctant to increase production and have been cautious with investment decisions. In the U.S., the Biden administration has repeatedly called for oil and gas companies to increase production, which is at odds with administration plans to reduce emissions.
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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