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U.S. Oil Producers Take Their Crude Back From The Government – OilPrice.com

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U.S. Oil Producers Take Their Crude Back From The Government | OilPrice.com

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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    U.S. oil companies have started pulling their crude oil back from government storage tanks, suggesting that the glut that forced them to stash it there in the first place is now easing.

    Companies have taken out some 2.2 million barrels of crude since the start of the month, Reuters reports, citing government figures. That’s out of some 23 million barrels that oil producers had to store at government tanks when they ran out of storage space after the slump in demand.

    Storage space was leased in April after oil prices tanked below zero for the first time in history as traders rushed to offload their positions before the contract expired. Despite the brevity of this particular mini-crisis, fundamentals remained difficult as companies were just beginning to cut production, which left them saddled with a lot of oil they could neither sell nor store.

    President Trump tried to help by ordering the Energy Department to buy some 77 million barrels from the struggling industry. That order, however, was never fulfilled. Renting out storage space was the only viable alternative.

    At the time, there were worries that this additional flow of oil into the Strategic Petroleum Reserve would push its occupancy rate too high, leaving nothing available and sending oil prices downward again. While this did not happen thanks to the production cuts that U.S. producers made, prices remained depressed for quite a while because of these storage space availability concerns.

    This makes the news that Exxon, Chevron, and the other six companies that rented SPR storage space are taking it back all the better. However, those watching the Energy Information Administration’s weekly inventory report might want to bear it in mind in case one of the next reports does not feature a hefty drawdown.

    By Irina Slav for Oilprice.com

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      Feds announce $320M for N.L.'s struggling offshore industry – CBC.ca

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      The federal government has pledged $320 million to support offshore oil jobs in Newfoundland and Labrador.

      Natural Resources Minister Seamus O’Regan was in St. John’s on Friday to announce the new measures, after six months of lobbying from oil industry groups and workers demanding assistance.

      O’Regan said the money will “support jobs and ensure the sustainable, long-term, lower-emitting future for our offshore.”

      He said it will be spent on safety improvements, maintenance and upgrades of existing offshore infrastructure, environmental services and clean technology.

      O’Regan said the money will be handed over to the province with no strings attached and will come from Ottawa’s portion of royalties from the province’s Hibernia oil field.

      Newfoundland and Labrador Premier Andrew Furey announced a new task force will decide how the money is spent.

      Federal Natural Resources Minister Seamus O’Regan announced more than $300 million of federal funding for the offshore oil industry at the Johnson Geo Centre in St. John’s on Friday. (Terry Roberts/CBC)

      While many details remain unclear, what is known is that the aid does not come in the form that major industry players were rooting for. Husky was asking the federal government to invest in equity stakes in its major projects in the province while offshore advocacy groups like the Newfoundland and Labrador Oil and Gas Industry Assocation — Noia — and the Canadian Association of Petroleum Producers were rooting for tax credits and investment incentives.

      In a press release sent after the announcement, CAPP said it needed to see more details but hoped it would lead to immediate help for workers. The group said it will continue pushing for tax reforms and other measures to help stalled projects off the coast of Newfoundland.

      Hard times for province’s industry

      The announcement comes after six months of crushing losses for the province’s offshore oil industry. Workers took to the steps of Confederation Building last week to speak about the anxiety they feel amid layoffs and cutbacks.

      The biggest blow to the province could be still to come. Husky Energy has announced it’s reviewing the West White Rose extension — a $2.1-billion project in Placentia that employs more than 600 people on a daily basis — with the possibility of canning the entire job.

      O’Regan said he spoke with Husky on Friday morning, and said the federal government is still at the table over a possible solution for the West White Rose extension.

      Problems started in March with the onset of the pandemic in North America coupled with a price war between Saudi Arabia and Russia, which sent oil and gas prices into a nosedive.

      Since then, Suncor has anchored its idled Terra Nova FPSO in Conception Bay, the long-standing Hibernia platform has suspended drilling, and future ventures that once sounded lucrative and promising have been shelved.

      The result, according to Noia CEO Charlene Johnson, has been thousands of job losses and local companies closing up shop.

      O’Regan acknowledged on Friday that the industry is “suffering from a double-whammy.” 

      He said the new measures are a practical program, “because we believe in our workers. We believe in this industry. And we believe in its future.”

      O’Regan also said the federal government is trying to strike deals with the owners of the West Aquarius and Transocean Barents exploratory rigs to support future development in the offshore industry.

      The province announced a new incentive for offshore exploration on Thursday. That new measure gives oil companies a chance at a rebate for exploration by taking down payments that would typically go into provincial coffers and offering them back to companies.

      Task force details

      Furey said the task force will work on an “emergent” basis to get the money out as quickly as possible.

      The task force will be chaired by Karen Winsor and Bill Fanning, two former oil executives who are members of the province’s Oil and Gas Industry Development Council — the group to which the task force is reporting.

      “The remaining members, to be selected by the council, will bring a diverse mix of skills and experience so that they can contribute to driving the recovery of the Newfoundland and Labrador oil and gas industry,” reads a news release sent to media during Friday’s announcement.

      O’Regan said he is OK with putting the province in charge of dishing out the money, since he believes the province should have control of its offshore industry under the Atlantic Accord agreement.

      Read more from CBC Newfoundland and Labrador

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      Canada signs deal to secure 20M more COVID-19 vaccine doses, though none have been proven successful yet – CBC.ca

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      Canada has signed an agreement to secure another 20 million vaccine doses as the global race for a  COVID-19 vaccine intensifies.

      During a news conference in Ottawa today, Prime Minister Justin Trudeau announced a deal with AstraZeneca on access to a vaccine prospect now being developed at Oxford University. As a result, the federal government has now secured access to six leading vaccine candidates. None of the candidates have been proven to work so far.

      “We’ve been guided by science since the very beginning and right now, both the COVID-19 vaccine task force and the immunity task force are doing important work to help us identify the most promising vaccine options and strategies,” he said.

      There is no approved vaccine yet for COVID-19, though there are many in clinical trials and in development. Public Services and Procurement Minister Anita Anand said the global market is “intense and unpredictable.”

      “Each supplier and therefore each negotiation is unique, with its own set of concerns,” she said. “The resulting agreements contain terms specifying the quantity, the price, the anticipated delivery schedule, the manufacturing and finishing parameters for each vaccine.

      “When a vaccine is ready, Canada will be ready.”

      The federal government already has reached vaccine agreements with Sanofi, GlaxoSmithKline, Johnson & Johnson, Novavax, Pfizer and Moderna, for a total of 282 million doses.

      Full payments to drug companies are contingent on the vaccines passing clinical trials and obtaining regulatory approval.

      Health Canada says it will review the evidence on safety, efficacy and manufacturing quality for each vaccine to determine if individual vaccines will be approved for use in Canada before they are made available to Canadians.

      Government buying syringes, swabs, needles

      The government is also procuring equipment and supplies needed for vaccine manufacturing and packaging, as well as immunization equipment such as syringes, needles and alcohol swabs.

      Trudeau also announced that Canada will provide $440 million to COVAX, a global procurement initiative meant to ensure fair, equitable and timely access to vaccines for less wealthy countries.

      “This pandemic can’t be solved by any one country alone because to eliminate the virus anywhere, we need to eliminate it everywhere,” Trudeau said.

      The U.S. is not participating in the global COVAX project.

      Trudeau said the fact that 190 countries are participating — some as contributors, others as recipients — shows that “the world is coming together.”

      “Unfortunately, there are a few large countries that have decided not to participate, but I can assure you that the number of countries that have stepped up and participated like Canada is ensuing that we’re going a long way towards having a vaccine accessible for the most vulnerable around the world, which is essential as we move forward to get past this pandemic,” he said.

      Rapid test in the works

      With frustratingly long waits for COVID-19 tests still the norm in some parts of the country, the federal government is under increasing pressure to approve rapid testing options. Asked about the holdup today, Trudeau said Health Canada accelerated the process to evaluate testing measures this spring.

      “But at the same time we have to make sure that every step of the way we are not compromising science or the safety of Canadians,” he said.

      Earlier this week, Tam warned that Canada is at a “crossroads” in its pandemic battle and said the actions of individual Canadians will decide whether there will be a massive spike in COVID-19 cases.

      Modelling shows the epidemic is accelerating nationally, with projections that cases could climb to more than 5,000 daily by October. If Canadians don’t step up preventative measures, the virus could spread out of control and trigger a wave of infections bigger than the first one, Tam said.

      The following day, Trudeau delivered a rare address to the nation with a similar message. He warned that infections could surge and urged Canadians to do their part to prevent transmission by following public health guidelines on masks, gatherings and physical distancing.

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      Averting a COVID-19 vaccination crisis will take careful communication – The Verge

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      President Donald Trump’s relentless talk about interference with the COVID-19 vaccine approval process is setting the stage for a vaccination crisis. Even before a vaccine has been approved, public health experts are watching as confidence in a hypothetical vaccine plummets — and they’re already trying to figure out how to win back the public’s trust.

      In May, 72 percent of people said that they would get vaccinated, according to a Pew Research Center survey. By September, only half of people said that they would. That drop ispartly driven by the swirling drama around the still-unproven vaccines. Data and study protocols that normally wouldn’t draw much attention are subject to intense scrutiny.

      Now, many people who are normally comfortable with vaccines say that they’re worried. They think the process is being driven by politics, not science. They’re concerned that the Trump administration is pressuring federal agencies to authorize a vaccine before there’s enough testing to show that it’s safe or that it works.

      It’s still early days, and vaccine development is still in progress. It seems to be unfolding appropriately — at least so far — and it’s still too soon to say what might happen after initial data from the trials is released by pharmaceutical companies. But the drop-off in confidence before a vaccine is available still concerns public health experts. A vaccine won’t be able to help protect people if they don’t take it. If too many people refuse, the population won’t be able to build herd immunity.

      Fortunately, there will likely be a long lag between vaccine authorization and the time when most people will actually have the option to get a vaccine. That gives experts room to analyze the data and, if it’s warranted, alleviate some of those fears, says Melanie Kornides, an assistant professor at the University of Pennsylvania School of Nursing who studies vaccine hesitancy. They’ll probably handle it similar to how they handle parents who are scared of the measles vaccine. “We need to address people’s concerns, and talk about the benefits of vaccination,” she told The Verge.

      This interview has been lightly edited for clarity.

      How warranted are those fears around a politically motivated push to bring a vaccine out too quickly?

      I think that we need to remember that a vaccine hasn’t come out yet, and that’s because they haven’t finished safety and efficacy testing. If people are concerned that it’s maybe being pushed through too fast, that hasn’t played out yet because we don’t have a vaccine. I think that we can be confident in communicating that scientists and pharmaceutical companies are taking the right approach of balancing safety and efficacy testing with wanting to end a very dangerous and deadly pandemic as quickly as possible.

      Is there a difference between hesitancy around a COVID-19 vaccine and the hesitancy around childhood vaccinations, like the measles vaccine?

      I think that there are actually a lot of similarities between the hesitancy that we’re seeing around the COVID-19 vaccine and the normal vaccine hesitancy that we see around childhood vaccinations. As I’m looking at things that people are saying on social media about the COVID-19 vaccine, we see a lot of the same things that people tend to express about childhood vaccination. Those include worries that it’s not effective or worries about unknown, long-term side effects. There are worries that it’s pushed through for commercial profit or to make the government look better. And to some extent, we see with childhood vaccinations this belief that natural immunity might be safer and better, and we’re seeing a little bit of that too with the COVID vaccine.

      But the big difference is that this is much more widespread. Many people are saying that they normally get vaccinated and they normally accept vaccines, but they have particular concerns about this vaccine.

      Have we seen similar things before, when people who are usually comfortable with vaccines balk at one?

      My research before this was really focused on hesitancy around the HPV vaccine. It’s really similar because, like the COVID vaccine, a lot of parents that choose not to vaccinate their children for HPV are not anti-vaxxers. They just say they have these worries that maybe the HPV vaccine wasn’t thoroughly tested, or they’ve seen something on Instagram or Twitter saying that there have been negative side effects that are being taken seriously. You get these parents who are hesitant but, in general, are not anti-vaxxers.

      Will the same strategies we use to overcome those worries with HPV vaccines work for a hypothetical COVID-19 vaccine? Are they different from the way you’d talk to someone who is stridently anti-vaccine?

      In general, it’s just much harder to convince somebody who has really strong beliefs that vaccinations are dangerous to move over to the pro-vaccine camp. What we do with parents and children is we try to appeal the idea that everybody cares about their child and wants what’s best for their child. It’s about explaining or making them understand that, even though we don’t see these childhood illnesses anymore, they’re very dangerous, and they’re very deadly.

      There’s lots of studies showing that the important thing is the trust in the person who’s giving the information to you. I think with COVID-19, what’s going to be important is making sure that health care providers have been really well-trained in communicating the safety and efficacy and importance of the vaccine. That is what goes a long way.

      If most of the people who say they won’t get a COVID-19 vaccine are normally okay with vaccines, does that make it easier to help them understand why they should actually take it?

      Absolutely. A lot of it is going to depend on how well the safety and efficacy of the vaccine is communicated through the media, through the pharmaceutical companies, and then also through health care providers. But assuming that we do a good job of that, I think that it will move the needle, and a lot of people that are saying they won’t get vaccinated will move over.

      If the worst-case scenario does happen — a vaccine actually does get authorized without scientists feeling confident in the data, and there are negative side effects — what might happen?

      I think that would definitely be damaging. We have had instances where vaccines have been pulled from the market because they weren’t as safe as the initial safety data suggested. When that happens, it’s usually that the number of negative outcomes is small, but on a population-level, you want to prevent that.

      Ideally, hopefully, they’ll have several vaccines around the same time — so if one has to be pulled, the others will continue to be safe and effective.

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