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Gas-flaring permits key to Permian oil success; Iran, Venezuela output declines

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Essential Energy Insights - November 2021


Gas-flaring permits key to Permian oil success; Iran, Venezuela output declines

Top News

Texas gas-flaring permits may be key to 2019 Permian oil success, analyst says

Permian drillers with permits to flare gas associated with their shale oil wells are better positioned to survive a looming crunch in natural gas takeaway capacity out of the play, a Sanford C. Bernstein & Co. analysis said.

Improved conditions prompt flurry of refinancing for PJM merchant assets

Despite a glut of cheap natural gas that has kept energy prices low, refinancing prospects for merchant generation assets in PJM Interconnection have improved over the past year.

Mine safety oversight board hamstrung by lack of quorum

The commission responsible for resolving disputes between miners and the federal mine safety agency has lacked a quorum since Aug. 30, leaving it unable to issue decisions on cases.

Fitch: Iran, Venezuela output declines to keep Brent crude prices above $80/bbl

Constraints in oil supply from Iran and Venezuela due to production declines, along with growing demand, should keep a floor underneath Brent crude prices above US$80 per barrel through the end of the year, according to an Oct. 12 report from Fitch Ratings.

Quoted

"I am at a loss to understand how one can remove 40% of the electricity supply and not face outages," U.K. Member of Parliament Sammy Wilson, of Northern Ireland's Democratic Unionist Party, said at the possibility of two major power plants in Northern Ireland shutting down, as Brexit may separate Northern Ireland from the island of Ireland's grid, which on Oct. 1 interconnected with the wider European market.

Power

* Florida utilities were scrambling to restore power after Hurricane Michael but encountered blocked roads and obliterated infrastructure that Duke Energy Florida LLC said in many instances will need to be completely rebuilt — an effort that could take months, according to company officials.

* Pacific Gas and Electric Co. said Oct. 14 that it proactively shut off power in certain parts of northern California facing "extreme fire risk."

* The Energy Department has yet to release a grid resilience report contradicting the Trump administration's argument for keeping coal and nuclear plants operating, Bloomberg News reported. "One of its main conclusions is that on-site fuel storage (e.g. coal) isn't a critical factor for resilience, rather it's one of many factors," Michael Webber, the report's principal author, said in a tweet.

* The New Hampshire Supreme Court agreed to hear Eversource Energy's appeal of the denial of a state siting permit for its 1,090-MW, hydro-backed Northern Pass transmission project.

* Mississippi's lawsuit against Entergy Corp. for allegedly overcharging customers between 1998 and 2009 will be decided by a federal judge, according to The Associated Press.

* The U.S. Nuclear Regulatory Commission approved the sale of Entergy's retired Vermont Yankee plant to NorthStar Group Services Inc., which will decommission the facility.

* Minnesota regulators approved an incentive to attract residential subscribers, but advocates say it is not enough, the Minneapolis Star Tribune reported.

* The European Union plans to help fund construction of electric battery plants in the region, the Financial Times reported.

* Carlyle Group LP's $4 billion international energy fund secured a $100 million commitment from its own manager, Marcel van Poecke, the Financial Times reported, citing two people familiar with the matter.

Natural gas

* Cheniere Energy Inc.'s top executive said the company's next two liquefied natural gas trains are "neck and neck" in a race to start producing the commodity.

* The Massachusetts Department of Public Utilities ordered a moratorium on all non-emergency natural gas work by Columbia Gas in the state, AP reported.

* NextDecade Corp's proposed liquefied natural gas plant and related pipeline projects in Texas cleared an environmental review by the Federal Energy Regulatory Commission, advancing the export venture toward a final investment decision.

* Enbridge Inc. does not know yet how long it will take to clean the site of a natural gas pipeline explosion in Prince George, British Columbia, according to The Canadian Press.

Oil

* Oil and natural gas operators in the U.S. Gulf of Mexico that evacuated rigs and platforms for Hurricane Michael continue to return shut-in production across the region, the most recent data from the Bureau of Safety and Environmental Enforcement shows.

* Citing uncertainty in international capital markets, the Abu Dhabi-owned Mubadala Investment Co. has decided to delay an initial public offering of its 25% stake in Spanish energy company CEPSA.

* Equinor said Oct. 12 that it extended a contract with Maersk Drilling A/S's Maersk Intrepid rig for operational support on the Martin Linge field and has also signed another containing four new options.

* Argentine oil company YPF Sociedad Anonima is negotiating a possible sale of a minority stake in its power unit to an Asian fund, Bloomberg News reported, citing two people with direct knowledge of the plan.

Coal

* While Brazil took the lead in U.S. exports of coking coal at more than 5 million tonnes over the first eight months of the year, exports to India surged to 4.1 million tonnes between January and August.

* Mission Coal Co. LLC is closing its Pinnacle Mine in Wyoming County, W.Va. "We hope like crazy that that mine will go back to work and I'm working on it as best as I possibly can," West Virginia Gov. Jim Justice said in response to the closure.

* Thiess Pty. Ltd. said Oct. 15 that it secured a five-year A$1.2 billion mining services contract from BHP Billiton Group for the Mount Arthur coal project in New South Wales, Australia.

* The Appalachian Regional Commission is providing $26.5 million in awards to expand and diversify the economy of coal-impacted communities in nine states.

* Tonawanda Coke Corp. plans to begin the shutdown of its New York industrial plant on Oct. 16, AP reported.

ChartWatch

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Marcellus Shale-linked pieces of Williams Cos. Inc.'s 1.7-Bcf/d Atlantic Sunrise expansion of the Transcontinental Gas Pipe Line Co. LLC natural gas pipeline system accelerated to full transportation capacity when they went into service on Oct. 6, immediately adding substantial takeaway to a major U.S. production area.

New from RRA

* At its Oct. 12 open meeting, the Public Utility Commission of Texas voted to issue an order directing Wind Energy Transmission Texas LLC to tender a rate case filing within 120 days to show cause why its rates should not be reduced.

The day ahead

* Early morning futures indicators pointed to a lower opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

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Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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