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Energy Tomorrow Blog

Energy Costs, Consumers and Increasing U.S. Production to Help Demand-Supply Mismatch

eia  white house  domestic oil production  consumers 

Mark Green

Mark Green
Posted October 15, 2021

News item #1: Because energy demand has continued to significantly outpace supply, the U.S. Energy Information Administration (EIA) expects U.S. households will spend more money on heating costs this winter compared to last winter – for electricity, natural gas, propane and heating oil.

News item #2: Again, largely due to the demand-supply mismatch that’s further tightened energy markets and put upward pressure on prices, White House officials continue to wrestle with the impacts of higher consumer energy costs, including gasoline.

News item #3: Coal use has climbed, complicating U.S. efforts to reduce carbon dioxide emissions. Bloomberg reports U.S. power plants are projected to burn 23% more coal this year, the first increase since 2013, driven by higher natural gas prices. …

Taking all of this in, let’s make this point: There’s affordable, reliable energy available in the U.S., right now – American natural gas and oil.

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Afghanistan, Uncertainty and Ensuring U.S. Energy Security

global markets  us energy security  domestic oil production 

Mark Green

Mark Green
Posted August 24, 2021

The continuing story in Afghanistan is a reminder of how suddenly geopolitical events turn. Stability in the world is fleeting, and we know that global turbulence impacts energy, historically triggering oil price volatility. While the U.S. shale revolution helped keep global oil markets and costs stable, shielding American consumers from many of the impacts caused by destabilizing events in recent years, maintaining and increasing U.S. energy security should never cease to be a top national priority.

American energy security is strengthened by safe and responsible oil and natural gas production here at home. The two supplied nearly 70% of the energy Americans used in 2020, according to the U.S. Energy Information Administration (EIA). And natural gas was the leading fuel for generating electricity, EIA says, with a share nearly four times as large as wind and solar combined.

Now, Afghanistan is raising concerns that could roil global trade, including oil markets. 

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Sorry, America: OPEC+ Oil Rebuff Keeps Focus on Flawed White House Energy Policies

white house  domestic oil production  us energy security  federal leases 

Mark Green

Mark Green
Posted August 19, 2021

We’ve entered a different era in America, one in which this nation, rich in oil and natural gas reserves, publicly begs OPEC+ to increase its crude oil production to offset a U.S. supply-demand imbalance and the highest gasoline prices in years.

Let that sink in: Practically on bended knee, the American president and his administration – leading the world’s No. 1 producer of oil and natural gas – have pleaded with an oil cartel to solve their problem by producing more oil – as they bypass U.S. producers and pursue anti-oil policies here at home. …

Insult to injury: OPEC+ said, sorry, America, we see no reason to meet your request.

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The White House, OPEC and the Need for Domestic Oil Production

president  opec  federal leases  domestic oil production 

Dean Foreman

Dean Foreman
Posted August 16, 2021

Some observations follow on the Biden administration’s continued call for OPEC to increase its crude oil production – even as it curbs or discourages U.S. production – plus the president’s recent announcement  that he wants the Federal Trade Commission (FTC) to investigate summer gasoline prices.

We’ll take the FTC first. Chair Lina Khan has been asked to look into any potential illegal conduct or anti-competitive practices that may have occurred during the summer driving season.

The U.S. Energy Information Administration (EIA) reported the national average for gasoline reached $3.172 per gallon Aug. 9, the highest point since October 2014. “[T]here have been divergences between oil prices and the cost of gasoline at the pump,” wrote National Economic Council Director Brian Deese. “While many factors can affect gas prices, the president wants to ensure that consumers are not paying more for gas because of anti-competitive or other illegal practices.”

Numerous federal and state agencies have investigated the causes of price spikes for decades and consistently have found that the markets and other factors are responsible for price fluctuations. If the White House truly believes “anti-competitive or other illegal practices” have elevated gasoline prices, it’s strange that it would look to a cartel of oil-exporting countries to help solve the problem. In fact, the administration is floating a false premise on what’s happened this summer with gasoline prices.

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Higher U.S. Gasoline Prices Reflect Crude Oil Supply-Demand Imbalance

domestic oil production  federal leases  supply  white house 

Lem Smith

Lem Smith
Posted August 5, 2021

This summer, Americans saw gasoline prices rise to their highest level since 2014 as Congress debated infrastructure policy and economies worldwide continued their recovery.

Gasoline prices primarily reflect the local balance between gasoline supply and demand. Notably, the cost of crude oil is the largest component in the price of regular gasoline, accounting for 55% of the per-gallon cost, according to the U.S. Energy Information Administration. Right now, demand for crude oil is outpacing supply across the U.S. ...

Given these conditions, it’s no time to restrict or discourage U.S. natural gas and oil production. Instead, government and industry should work together to expand the safe and responsible development of American energy resources. Unfortunately, while America’s natural gas and oil are in high demand, the Biden administration has advanced misguided policies that could exacerbate the crude imbalance and further affect consumers.

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We Can't Take Our Energy Security for Granted

us energy security  saudi arabia  domestic oil production  consumers 

Dean Foreman

Dean Foreman
Posted March 17, 2021

One of the great benefits of increased U.S. oil production over the past decade and a half is strengthened U.S. energy security – decreased reliance on foreign oil suppliers and insulation for American consumers against sudden price increases due to geopolitical events, such as the recent attacks on Persian Gulf oil facilities.

Years ago, an episode like that could’ve caused serious alarm in the United States and globally. Yet, the apparent lack of significant or enduring oil price movement following last weekend’s attack shows the tremendous influence U.S. oil production has had on global markets. The same was true after missile attacks on Saudi facilities in 2019 (see here), which substantially reduced Saudi Arabia’s oil exports for a short period. Both events and their aftermath indicate that U.S. domestic production has largely mitigated the price volatility historically associated with serious geopolitical events.

Still, some cautions are in order. First, U.S. energy security can’t be assumed. It takes long-range planning and investments, safe access to domestic resources, the ability to expand pipeline and export facility infrastructure, and a policy-level approach that anticipates unforeseen events that could affect global energy supply and have dire impacts on U.S. security, economic growth, and consumers.

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Crude Exports and Consumer Benefits

crude oil exports  gasoline prices  consumers  domestic oil production  eia 

Mark Green

Mark Green
Posted September 9, 2016

Looking back, the weight of scholarship and analysis had predicted that, rather than cause higher pump prices here at home as some claimed, exporting domestic crude would put downward pressure on U.S. gasoline prices. In fact, that’s what we’re seeing – abundant crude oil supply benefiting American consumers. U.S. crude exports are part of that market dynamic – while also helping to support domestic production and strengthening America’s balance of trade.

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The Oil Exports Conversation

crude oil exports  domestic oil production  security  economic growth  jobs 

Mark Green

Mark Green
Posted December 7, 2015

t’s good that Congress appears to be talking seriously about ending the United States’ four-decades-old ban on crude oil exports. Reports say Democrats and Republicans are discussing a deal that would include lifting the export ban – though it’s unclear what a specific deal would look like. “We need to have a conversation” about oil exports, Senate Minority Whip Dick Durbin told Politico. “We need to have a fair negotiation.”

Of course, we’ve been having a conversation about the merits of lifting the exports ban for some time. And it starts with this: Every major study on the issue has found that exporting U.S. crude oil would be good for America and Americans. The benefits range from those to consumers, to the economy, to American security to domestic energy production. According to the research, ending the outdated ban would positively impact all of the above.

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Saying ‘Yes’ to Iran, ‘No’ to U.S.

crude oil exports  domestic oil production  security  president obama  economic growth  jobs 

Mark Green

Mark Green
Posted October 19, 2015

The question Americans should be asking right now: Why is the Obama administration actively working to clear the way for Iran to resume trading its crude oil on the global market while it opposes legislation that would do the same for U.S. oil?

It’s a great question for which the administration can offer no good answer, because there isn’t one.

Yet, that’s the policy disconnect that is unfolding before Americans’ very eyes, with the weekend news that the administration approved conditional sanctions waivers for Iran that at some point will let the Iranians resume exporting their oil to the world – within days of the White House threatening to veto bipartisan legislation in Congress that would end the 1970s-era ban on U.S. oil exports.

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U.S. Energy Exports Opportunity Knocks

energy exports  crude oil exports  lng exports  security  economic growth  domestic oil production 

Mark Green

Mark Green
Posted October 15, 2015

Reuters reports that Lithuania is in talks with U.S. liquefied natural gas company Cheniere Energy, seeking to reduce its dependence on Russia for LNG supplies. Lithuania opened an LNG import terminal last year, and its gas supply contract with Russian state-owned supplier Gazprom is scheduled to expire at the end of the year. Rokas Masiulis, Lithuania’s energy minister:

“We would love to have U.S. cargo in our region to have competition with Gazprom. … I believe negotiations with Gazprom now will be on competitive, reasonable terms and that will be just business and nothing else. … After we have built an LNG terminal, there is no possibility of blackmail. Since we think there is no possibility of blackmail, discussion will be rational and economical rather than political. This is a big step.”

The minister speaks diplomatically, so let’s read between the lines a bit. We suspect that Lithuania is trying to secure the diversification of its energy supply. The country wants options, additional sources of LNG so that it is beyond leveraging by Russia on natural gas. Russia did this with oil in 2006, Reuters reports.

At the same time, Masiulis told Reuters that Lithuania also would be open to buying U.S. crude oil if the United States repeals its current ban on the export of domestic crude.

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