Energy Week

Biden Revokes Oil Drilling Permits for Additional Review
https://finance.yahoo.com/news/biden-yanks-just-approved-drilling-174208569.html
- If you thought you were in the clear because you got your permit in before the Jan 20 EO, sorry. Permits issued without the extra political review are invalid.
- 33 permits for wells in the Gulf of Mexico have to sense drilling pending the political review
- Pretty substantial risk

Canadian rails see crude increasing on Keystone XL cancellation, DAPL uncertainty
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/012921-canadian-rails-see-crude-increasing-on-keystone-xl-cancellation-dapl-uncertainty
- Make crude by rail great again!
- So can rail companies now argue that crude by rail is the “environmentally safe” option compared to pipelines?

GM aims to end sale of gasoline, diesel-powered cars, SUVs, light trucks by 2035
https://www.reuters.com/article/us-gm-emissions/gm-aims-to-end-sale-of-gasoline-diesel-powered-cars-suvs-light-trucks-by-2035-idUSKBN29X2AY

https://twitter.com/lawyer4laws/status/1354526622460891137?s=21
- 95% coal
- ground the private jets to save the planet

Exxon, Chevron CEOs Discussed Merger
https://www.wsj.com/articles/exxon-chevron-ceos-discussed-merger-11612126203
- Let’s get the band back together!
- Standard Oil Trust was broken up in 1911 into Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), Standard Oil of California (Chevron), Standard Oil of Ohio, etc. etc.
- Floating idea for traction
- Would it help deal with regulatory burden from Biden admin

OPEC+ Sees Almost Full Oil-Cuts Compliance in December
https://news.yahoo.com/opec-sees-almost-full-compliance-163554530.html
- China’s transportation numbers for lunar New Year now make Saudi ‘surprise’ cut seem prescient.

Nuisance Laws an Ineffective Way to Hold Big Oil Accountable for Climate Change
https://news.bloomberglaw.com/environment-and-energy/nuisance-laws-an-ineffective-way-to-hold-big-oil-accountable-for-climate-change
- Supreme Court heard arguments on whether these lawsuits should be heard in federal court or state court. WIll probably be dismissed if they go to federal court.

Russia Cuts Crude Exports to Avoid Fuel Shortage
https://www.energyintel.com/pages/eig_article.aspx?DocID=1096531

Fossil fuel transition: Expect oil price spikes as capital investment declines
https://www.worldoil.com/news/2021/1/29/fossil-fuel-transition-expect-oil-price-spikes-as-capital-investment-declines
- Total global investment into oil and gas exploration and production fell by 34% last year to $261 billion, the lowest since 2004
- Annual investment needs to be 25% higher over the next three years to stave off a supply crisis, the report estimated

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On today's show, Ellen Wald and Ryan Ray discuss the woes facing refiners, the implications of the Biden administration suspending federal leasing and discuss Keystone XL with Prof. James Coleman from SMU.

Big Oil hits brakes on search for new fossil fuels
https://www.reuters.com/article/us-oil-exploration-cuts/big-oil-hits-brakes-on-search-for-new-fossil-fuels-idUSKBN29U00V
- tale as old as time
- BP leading the way to not becoming an oil company

U.S. oil refiners set for worst earnings quarter of the pandemic
https://www.reuters.com/article/us-usa-refining-results/u-s-oil-refiners-set-for-worst-earnings-quarter-of-the-pandemic-idUSKBN29U0F0
- will refineries continue to shift away from jet fuel, transportation fuels and more towards components for petrochemicals?

Biden administration suspends federal leasing, permitting
https://www.offshore-mag.com/regional-reports/us-gulf-of-mexico/article/14196032/biden-administration-suspends-federal-oil-and-gas-leasing-permitting
- KXL was low hanging fruit
- 60 moratorium on fracking permits
- Is this is the start of more stringent regulations? Yes
- New Mexico voted for Biden. Division between those in federal lands areas and those in cities. But all of New Mexico benefits from the money.

Biden’s stimulus may be too big amid economic recovery, should be targeted at those most impacted
https://www.cnbc.com/2021/01/24/bidens-stimulus-may-be-too-big-amid-economic-recovery-should-be-targeted-at-those-most-impacted.html

Iraq's dominance over Indian crude market to be tested if Iran returns
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/012121-iraqs-dominance-over-indian-crude-market-to-be-tested-if-iran-returns

Special Guest Prof. James Coleman from SMU. Find him at www.energylawprof.com
- Keystone XL pipeline got more cash last year which indicates that it wasn’t doing so well to start with.
- 13 years for an energy transport project give a cautionary tale for investors in energy transportation.
- Trump tried to get pipeline built for 4 years, but nothing really happened. Problems for building energy infrastructure show that Presidents can’t get energy transport built but they sure can kill it.
- More likely TC Energy will request damages under NAFTA. Strong claim on its face, but no claim has ever succeeded against US with NAFTA
- Trans-Mountain expansion will likely go ahead. Only federal approval needed if its inter-provincial. Line 3 Enbridge still could have some hurdles but if they get that replaced and TM in place they might be ok without KXL
- State Energy Cartels - for more information check out Prof. Coleman’s paper here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3567236
- case of Alberta, making every company cut back when prices were rock bottom. Oil price went up 300% - huge benefit to cash flow even with everyone cutting production. Transport constraints played an important role.
- Flaring is down a lot now but usually when transportation is constrained you get higher flaring. Flexible system to phase in small cuts.
- Alberta exempted some of the smallest producers from cuts, which is an important part.
- “Federal anti-trust law is no joke. Don’t mess with it.” But the states can regulate.
- North Dakota and Texas have similar problems with rapid build out and flaring. SImilar model.
- Alberta is a model for good things and mistakes. DIdn’t phase in cuts, cut to rapidly and got rid of differential and killed their crude by rail investment.
- Look at what Texas did before: in the past the federal gov coordinated things.
- In the past, coastal energy consumers would have flipped out at attempts to curb oil and gas production. Now, these people would applaud.
- Because flaring is way down, now is the time to develop regulatory structures.
- Best app, real time info, info that TRC puts out isn’t nearly as good. EIA stats are best in the world.

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Check out Ellen's column on Wednesday at thewarroomnewsletter.com

Biden indicates plans to cancel Keystone XL pipeline permit on first day in office, sources confirm
https://www.cbc.ca/news/canada/calgary/biden-keystone-xl-1.5877038

Keystone XL Oil Project Pledges Zero Carbon Emissions
https://www.wsj.com/articles/keystone-xl-oil-project-pledges-zero-carbon-emissions-11610930642
- Can a pipeline even run on renewable energy?
- Solar panels likely
- But REALLY, they mean that the company will fund 1.6 gigawatts of renewable power.
- What does this mean for the future of infrastructure projects in the US?
- Job contracts were awarded, Alberta wants to sue, potentially
- So many people involved in the process, when a snafu happens in one place it kills it for everyone

Rising oil prices test US producers’ willpower
https://www.woodmac.com/news/opinion/rising-oil-prices-test-us-producers-willpower/
- Is the price right now? Or do people think it will go higher?

China economy grows in 2020 as rebound from virus gains
https://apnews.com/article/pandemics-europe-coronavirus-pandemic-china-japan-9ffd848ef5639f07e77588efde424dcc
- Can we trust China’s numbers?
- Government spending on industrials vs. the consumer economy China wants to become

Adnoc defies retreat from oil with push to pump up output
https://www.ft.com/content/b13efad3-f494-46a8-842c-ccf7124ad43d
- good idea? Bad idea? To increase capex while other companies have been cutting theirs
- Wants to ramp up to 5 million bpd from 3 million bpd by 2025

Total quits API citing climate policy disagreement
https://www.argusmedia.com/en/news/2177425-total-quits-api-citing-climate-policy-disagreement

Total speeds up renewables push with $2.5 billion investment in Indian solar power
https://www.reuters.com/article/us-total-india-adani/french-energy-group-total-buys-20-stake-in-indias-adani-green-energy-idUSKBN29N0C5

These Companies Want to Charge Your Electric Vehicle as You Drive
https://www.wsj.com/articles/these-companies-want-to-charge-your-electric-vehicle-as-you-drive-11610965800
- is it worth changing all the infrastructure?
- how about try it out in one small city first...

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Debanking Hurts Everyone
https://www.barrons.com/articles/debanking-hurts-everyone-51610145010

Saudi cut to boost oil market de-stocking, even as demand falters
https://www.reuters.com/article/us-global-oil-inventories-graphic/saudi-cut-to-boost-oil-market-de-stocking-even-as-demand-falters-idUSKBN29F06D

Major OPEC Producers, Cued by Saudis, Raise Asia Crude Pricing
https://uk.finance.yahoo.com/news/iraq-raises-crude-pricing-asia-145210101.html


https://www.api.org/products-and-services/statistics/apis-economic-industry-outlook

Japan power generators facing LNG shortage amid supply crunch, cold weather
https://energy.economictimes.indiatimes.com/news/power/japan-power-generators-facing-lng-shortage-amid-supply-crunch-cold-weather/80153824

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OPEC news:
OPEC+ is still undecided as to whether it will increase production
Role of additional lockdowns being announced during break between OPEC meetings
Also role of Qatar—Saudi end of airspace blockade

South Korean-flagged tanker seized by Iran, media reports
https://www.reuters.com/article/iran-tanker/update-1-south-korean-flagged-tanker-seized-by-iran-media-reports-idUSL1N2JF0L8
- Is this the next big conflagration?
- how much is this related to sanctions? South Korea is holding $7 billion of Iranian money because of US sanctions
- Are Iranians forcing the hand of the incoming US administration to see where they stand?

Oil prices touch multi-month highs as OPEC+ expected to cap output
https://www.reuters.com/article/us-global-oil/oil-prices-touch-multi-month-highs-as-opec-expected-to-cap-output-idUSKBN299035
- price fall today more related to US stock market falling than what’s specifically happening with oil
- What about China?

Saudi energy minister urges OPEC+ discipline as some members seek output gains
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/010421-saudi-energy-minister-urges-opec-discipline-as-some-members-seek-output-gains
- Saudi—Russia in very different positions but the stakes aren’t as high as they were back in March 2020. Fewer barrels bpd and another monthly meeting coming up.

OPEC secgen says ready to adjust oil output increases
https://uk.reuters.com/article/oil-opec/opec-secgen-says-ready-to-adjust-oil-output-increases-idUKL8N2IJ3OW

China’s Wintry Cold Lifts Diesel Use as Factories Buy Generators
https://www.bloomberg.com/news/articles/2021-01-03/china-s-wintry-cold-lifts-diesel-use-as-factories-buy-generators
- bottlenecks like import restrictions. Leaving coal on the boat in the ocean. It’s paid for and sitting in China’s harbors.

December diesel demand crawls up to 97% of pre-pandemic level
http://timesofindia.indiatimes.com/articleshow/80063323.cms
- mixed indicators of good and bad economic growth, just like in the U.S.

Investors challenge ExxonMobil on multiple fronts
https://www.argusmedia.com/en/news/2173720-investors-challenge-exxonmobil-on-multiple-fronts

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Oil rises to touch $52 after Trump signs aid bill
https://www.reuters.com/article/us-global-oil/oil-firms-after-trump-signs-aid-bill-demand-concerns-linger-idUSKBN2920FZ?il=0
- Demand in the US isn’t good but oil stay just under $52 with vaccine news.
- But will increased vaccination actually lead to increased economic activity?
- Market is forward looking but just HOW forward looking is it?
- There could be a sell off when the market reaches the point where demand is back where it is.
- Russia sees demand at 7-8mbpd below pre-pandemic levels but expects growth of only 5-6 mbpd.

Japan to Phase Out Gasoline-Powered Cars, Bucking Toyota Chief
https://www.wsj.com/articles/japan-to-phase-out-gasoline-powered-cars-bucking-toyota-chief-11608887640
- also planning to increase coal powered plants so EVs in Japan will be running off of coal.
- Japanese grid can’t handle the increase in power demand

Toyota’s Chief Says Electric Vehicles Are Overhyped
https://www.wsj.com/articles/toyotas-chief-says-electric-vehicles-are-overhyped-11608196665

Asia’s oil sector in 2021: China drives recovery, strengthens status as refining center
https://www.spglobal.com/platts/en/market-insights/blogs/oil/122420-asia-oil-sector-2021-china-recovery-refining-transport-cars
- predicts oil demand back at 99.53 mbpd in 2021
- China and India will lead the demand growth but India won’t become the next China

Carbon Prices Jump Despite Record Drop in Emissions
https://www.wsj.com/articles/carbon-prices-jump-despite-record-drop-in-emissions-11608814801?page=1
- Carbon credits are like gold. Credits tied to carbon emissions are having a better year than gold.
- Pricing in of increased ambition
- Morgan Stanley forecasts that EU carbon credit prices could rise from 44 Euros to 76 Euros

Biden camp adds pressure on EU to hit brakes on China deal
https://www.japantimes.co.jp/news/2020/12/23/business/economy-business/biden-eu-china-investment-trade/
- If EU doesn’t back China they have no where to turn to
- Biden promoted multilateralism but can he bring that to bear on China?

How tough will Joe Biden be on the US shale industry?
https://www.theguardian.com/us-news/2020/dec/27/joe-biden-us-shale-industry-fracking-ban

U.S. shale oil just had its worst year and the pain could bleed into 2021
https://www.reuters.com/article/us-usa-shale-outlook-analysis/analysis-u-s-shale-oil-just-had-its-worst-year-and-the-pain-could-bleed-into-2021-idUSKBN28W17P
- Growth growth growth was the model for so long that the demise of growth is seen as the death of the industry but that is not necessarily the case.
- Oil productions as going to decrease anyway, 2020 just send up the process the most painful way possible.
- Revamping, reshaping of shale oil industry underway and still underway.

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Crude oil futures plummet on concerns over new coronavirus strain
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122120-crude-oil-futures-plummet-on-concerns-over-new-coronavirus-strain

Oil tumbles as new virus strain revives demand worries
https://www.reuters.com/article/global-oil-int/oil-tumbles-as-new-virus-strain-revives-demand-worries-idUSKBN28V04N

-Shows that likely vaccine will be required for travel
-Brent dropping below $50 on news of more shutdowns but if this the start of a real sell-off
-Will the stimulus bill ($900 billion+) lift the economy and prices?

Russia Favors Further OPEC Output Hike In February
https://financialpost.com/pmn/business-pmn/russia-favors-further-opec-output-hike-in-february
- Novak floats 500,000 bpd increase for February and oil prices stay at or above $50, so this seems like a good signal for January 4 meeting

Real Oil Price Rally Fades as Asia’s Buying Spree Winds Down
https://www.bloombergquint.com/business/physical-oil-rally-fades-with-asian-buying-cooling-after-spree
- It is possible that this is just a price correction brought about by an end to Asia's oil buying spree.

China to Have Oversupplied Oil Market for Decades
http://www.energyintel.com/pages/eig_article.aspx?DocID=1092970
- China sees that its own oil products market will be oversupplied through 2050 and it will continue to refine more products and build more refineries anyway and sell the products it produces.
- The forecast comes from a belief that there will be a shift away from oil powered vehicles to “new energy” vehicles

OPEC+ Will React Faster, Be More Hands-On With Oil Market
https://finance.yahoo.com/news/opec-react-faster-more-hands-163842347.html
- Is this really better for the market?
- To keep the US from over drilling it is an effective way to keep US companies from opening up more drilling
- Also, is there enough trust? Does the market actually trust OPEC producers to produce what they say they are and will produce?

API Industry Outlook Fourth Quarter 2020
- GDP growth seen at 4.8%
- Demand growth coming from developing nations
- Demand growth in the U.S. will be uneven geographically.

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Planet FWD debuts carbon-neutral snacks
https://www.axios.com/planet-fwd-carbon-neutral-snacks-f4c6ef3a-c5fe-45d5-925f-055a6b221d62.html
- fully carbon neutral manufacturing process
- Ellen is making “low-carbon” crackers and she would like to pursue seed funding for her venture. PS: low-carbohydrate versions coming soon.

OPEC cuts forecast for 2021 growth in oil demand
https://www.marketwatch.com/story/opec-cuts-forecast-for-2021-growth-in-oil-demand-2020-12-14
- This comes after OPEC decides to raise production 500,000 bpd in January

Iran Sends Ship to Load Venezuela Oil in Defiance of Sanctions
https://finance.yahoo.com/news/iran-sends-ship-load-venezuela-172517460.html
- how long would it take for Venezuela to restore oil production?

Conversation with Dr. Dean Foreman of API on Monthly Statistical Report
- Oil demand in November returned to within the 5 year range
- Gasoline month on month went down despite holiday travel.
- Usually see season decrease in driving between Oct and Nov but this decrease was larger
- Overall demand rose from diesel and distillates because of transportation and industry. Also jet fuel picked up.
- Air travel traffic picked up.
- Other oils: naphtha and gas oils that are used in petrochemicals picked up. Usually 25% of demand in Nov it was up to 30%. Increased petrochemical demand and throughput with it.
- Growth in petrochemical industry in US that we didn’t have 20 years ago.
- Rig count: what is it telling us? Rig count doesn’t look like its high enough to sustain oil production BUT productivity is way up and production has been up. People are drilling their very best rigs with the most productive rigs and equipment.
- Ability to spool back up in Permian Basin and other places. Productivity won’t be as high though, when it returns. But many processes put in place to increase productivity will remain in place.
- Refiners are able to respond to changes in demand conditions. The economy and oil demand go hand in hand. If economy continues to recover, then refiners that can supply the product will increase.
- lowest imports of products+crude in 30 years and lowest crude imports from OPEC. Seen increase in domestic refineries using light, sweet crude oil and adapting to the environment they are given. Narrower international vs. domestic crude oil (Brent vs. WTI) differential.
- Record pipeline gas going to Mexico right now.

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Opec+ ministers to next meet on 4 January
https://www.argusmedia.com/en/news/2166600-opec-ministers-to-next-meet-on-4-january
- OPEC+ deal to increase production by 500,000 bpd
Could there have been some pressure from China on UAE and Russia to increase production because China wants to buy more?
- Will meeting more regularly have more or less impact on the market?
- Should OPEC set production policy for 6-12 months or should it become a rapid-response reactive group, adjusting production policy every month?
- Does it deter U.S. producers from increasing production too much? Would it influence the shale oil industry?

Energy Pipelines’ Bad Year Has a Silver Lining
https://www.wsj.com/articles/energy-pipelines-bad-year-has-a-silver-lining-11607342400
- Will all of the companies have product flowing through their infrastructure? For those that do, the value of their infrastructure will be increased.
- Value could come years later if pipeline permitted becomes so difficult its nearly impossible to get pipelines permitted.
- But would drillers put out capital to drill if there’s no possibility of getting pipeline space.
- Got to get through 2021 to see where demand is and see how many producers actually make it to 2022.
- Would they be absorbed by a super-major?

Exxon Under Pressure From New Activist Fund
https://www.wsj.com/articles/exxon-under-pressure-from-new-activist-fund-11607310000
- Engine No. 1 investment fund is pushing for Exxon to invest more in clean energy technology, etc.
- Why not just buy shares in BP and Shell?

U.S. gasoline demand during Thanksgiving week lowest since 1997: OPIS
https://www.reuters.com/article/usa-products-gasoline/u-s-gasoline-demand-during-thanksgiving-week-lowest-since-1997-opis-idUSKBN28H1UQ?il=0
- people are NOT driving
- WHY then, are oil prices up?
- What will happen for Christmas travel? But with new lockdowns, curfews, etc. can we really expect people to travel for Christmas?
- How much will the lack of demand for Black Friday show up in diesel for package delivery? Not enough to offset

Exxon Holds Back on Technology That Could Slow Climate Change
https://www.bloomberg.com/news/features/2020-12-07/exxon-s-xom-carbon-capture-project-stalled-by-covid-19

The COVID-19 Shock and the Curious Case of Missing Barrels
https://www.oxfordenergy.org/wpcms/wp-content/uploads/2020/12/The-COVID19-Shock-and-the-Curious-Case-of-Missing-Barrels.pdf
- China probably imported them!

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Sunday was the busiest day for US air travel since the pandemic began
https://www.cnn.com/travel/article/thanksgiving-travel-volume-2020-pandemic/index.html
- TSA screened 1.17 million people on Sunday after Thanksgiving 2020
- TSA screened 2.8 million people on Sunday after Thanksgiving 2019
- What about gasoline? Probably not as many people traveled this Thanksgiving but gasoline might be inflated because people used more gasoline because they traveled longer distances instead of flying
- What does this mean for Christmas and gasoline demand?

OPEC oil output rises for fifth month on Libyan recovery, Reuters survey shows
https://www.reuters.com/article/us-oil-opec-survey/opec-oil-output-rises-for-fifth-month-on-libyan-recovery-reuters-survey-shows-idUSKBN28A1KW
- Libyan oil production ramps up to 750,000 bpd will be higher.
- When will OPEC deal with Libyan oil production?

OPEC members agree to extend oil cuts by three months, Algeria says
https://uk.reuters.com/article/global-oil-opec/opec-members-agree-to-extend-oil-cuts-by-three-months-algeria-says-idUKS8N2GC08Z

U.S., Russia Race to Outflank Each Other on Russian Pipeline
https://www.wsj.com/articles/u-s-russia-race-to-outflank-each-other-on-russian-pipeline-11606645800
- US should be working to help Europe diversify its sources of natural gas as opposed to just working to stop the big bad pipeline, which it was working for with deals with Poland.
- Germany is basically getting into bed with the mob (Russia) willingly.
- Who is really a viable threat to the U.S.?

Iran’s Top Nuclear Scientist Killed in Ambush, State Media Say
https://www.nytimes.com/2020/11/27/world/middleeast/iran-nuclear-scientist-assassinated-mohsen-fakhrizadeh.html
- Assassinating the head of Iran’s nuclear program - Israel + U.S. or just Israel?
- Iran got off easy on shooting the airliner down

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