Good morning; here's what the Oilman has for you today:

• Oil Patch Should Brace for More Seismic Pressure

• Biden Admin Gets Cold Feet on SPR Refill

• Tweet of the Day

Oil Patch Should Brace for More Seismic Pressure

Oil and gas activity may have caused one of the strongest earthquakes in Canada’s oil country, a new study has found.

The study cited wastewater disposal during oil sands extraction as a possible cause for the quake, harking back to identical conclusions by the USGS about seismic activity in Oklahoma.

Guess who’s coming after wastewater disposal requirements

Canada’s oil industry is already operating in a hostile environment with tons of red tape, and a federal government bent on greening up – whatever the cost.

The conclusions of the study, conducted by Stanford University and University of Alberta researchers, will give the government one more reason to pressure oil producers – this time on wastewater disposal.

… And it’s not just oil

“Researchers mentioned that the results of the study would have implications for carbon dioxide storage as well,” Reuters reported.

That’s the bigger news.

U.S. and Canadian oil producers are making huge bets on carbon capture and storage. For them, it’s the emission reduction move that makes the most sense…right?

But imagine a study that says carbon capture and storage can increase seismic activity...You won’t have to wait long for the backlash.

Environmentalists have long opposed CO2 capture and storage, claiming it was too expensive and too ineffective.

The oil industry is investing billions in it, which suggests the above claims are not reflective of reality.

Yet with the quake argument and with environmental regulators looking for ways to make the industry suffer as much as possible, those billions are under threat.

And so is the industry’s most sense-making tactic to reduce emissions.

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Biden Admin Gets Cold Feet on SPR Refill

The federal government is in no rush to refill the Strategic Petroleum Reserve even though the price of WTI is right where the administration wanted it for that refill.

Per Energy Secretary Jennifer Granholm, “This year, it will be difficult for us to take advantage of this low price.”

While she didn’t say why it would be difficult, Granholm added, “But we will continue to look for that low price into the future because we intend to save the taxpayer dollars.”

Did the administration paint itself into a corner, or what?

Yes, the Biden administration definitely painted itself into a corner when it decided to sell 220 million barrels of oil from the SPR to push down prices at the pump... and never thought ahead.

Now, the SPR is at its lowest in 40 years, but prices at the pump are also low.

The SPR release…worked?!

The tricky part is that the moment the federal government starts buying oil to refill the SPR, prices will go one way: 🚀

The price will never be just right

The U.S. federal government set a price range of $67 to $72 a barrel of WTI to start buying crude for the SPR.

Right now, WTI is smack in the middle of this range of desired price. What gives? See the tricky part above.

So, is the federal government stuck with a half-empty strategic petroleum reserve?

It sure looks that way. Some say it doesn’t matter because the U.S. doesn’t need the SPR anymore. Others note that the word “strategic” is there for a reason.

Let’s hope we never have to find out who was right.

Around the Global Patch

🛸Nord Stream to help salvage unidentified objects.
⚡Petrobras CEO undeterred by energy transition.
🚀Moscow modernizes its missile defense system.

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