Energy Tomorrow Blog
Posted July 31, 2020
Former Vice President Joe Biden's camp says he wouldn’t completely ban hydraulic fracturing (see the New York Times and here) – the technology most responsible for a domestic energy revolution that has made the U.S. the world’s leading producer of natural gas and oil. While Biden’s proposal to end new federal fracking leases is misguided, the fact he wouldn’t try to ban it elsewhere may suggest a recognition that fracking is critically important to the U.S. economy and national security.
This could indicate some important common ground, which API President and CEO Mike Sommers addressed in the Times article.This is especially welcome news for the nation’s electricity grid operators. They’re on the front lines of the twin effort to provide affordable energy to American homes and businesses, while lowering carbon dioxide emissions from power generation. For them, clean and reliable natural gas is the cornerstone for succeeding on both fronts, which is why natural gas is the nation’s No. 1 fuel for power generation.
Posted July 30, 2020
There’s a basic principle in play in recent news developments in Massachusetts and Ohio – that public energy policy should serve people, not the other way around. In both states, access to clean natural gas, for affordable, reliable energy, means benefits for consumers.
Start in Massachusetts, where the state attorney general struck down the town of Brookline’s bylaw that would have barred new residences from installing natural gas infrastructure for space heating and hot water – mimicking similar restrictions imposed by Berkeley, California. That doesn’t necessarily mean Massachusetts AG Maura Healey has an affinity for natural gas; her decision was based on the primacy of state law and regulations.
No matter, consumers win. And in the process this point is elevated: Public bodies should ensure that dependable, affordable energy is available to consumers – instead of erecting artificial, market-distorting barriers to service.
John D. Siciliano
Posted July 24, 2020
Key Appalachian swing states continue to competitively produce the majority of America’s natural gas supply, despite a global pandemic that continues to pose major challenges for the industry.
Natural gas production in Ohio, Pennsylvania and West Virginia has skyrocketed in the last decade, making the Appalachian region the No. 3 natural gas producer globally behind Russia and the remainder of the United States. This has transformed the region into an energy powerhouse, one that continues to show room for growth.
Posted July 21, 2020
Through the recent COVID-19 pandemic and resulting shocks to energy markets around the world, U.S. natural gas has remained a relatively bright spot.
Record low prices have benefitted consumers, and at the same time many producers dedicated to natural gas in Pennsylvania, Ohio, West Virginia, Louisiana and East Texas have remained viable as cutbacks in oil and associated natural gas from other regions have taken effect. And now about 90% of U.S. drilling for natural gas is concentrated in these regions, that is Appalachia and the Haynesville areas.
The drilling activity has reflected two fundamental observations. The first is that, according to BTU Analytics, the recent breakeven price – that is, the Henry Hub wholesale market price needed to at least break even in drilling a new well – on average has remained near market prices despite COVID-19, a relatively warm winter and broad financial market concerns. The second observation is that natural gas well productivity, as reported by the U.S. Energy Information Administration, were resilient after some unexplained variation at the beginning of the year.
Posted July 17, 2020
Some lawmakers have proposed putting hundreds of thousands of Americans to work in clean energy jobs while moving the U.S. away from natural gas and oil and, presumably, from the jobs our industry supports.
Somebody should check to see if that’s what working men and women want.
A new study released this week by North America’s Building Trades Unions (NABTU) shows that workers appreciate jobs in natural gas and oil over “green-collar” jobs – because they pay better, last longer and provide greater opportunities.
Posted July 15, 2020
The Environmental Partnership continues to grow, broadening the reach of the industry initiative to further reduce emissions of methane and volatile organic compounds across the country.
In releasing its annual report, the Partnership announced it is expanding its membership to midstream companies. The Partnership, which has tripled the number of participating companies since it was launched, currently includes 36 of the top 40 U.S. natural gas producers.
Again, the Partnership’s membership growth means that more and more companies have signed on to the Partnership’s strategy of bringing operators together to learn from each other, collaborate on technologies and best practices and to take actions that improve their environmental performance. More broadly, this growth shows industry’s commitment to lower emissions and protect the environment while also supplying the energy that makes modern life possible.
Posted July 8, 2020
As President Trump welcomes Mexican President Andrés Manuel López Obrador to the White House for their first face-to-face meeting, they will tout the landmark United States-Mexico-Canada Agreement (USMCA). The updated North American trade pact, signed in January after months of deliberation, modernizes the longstanding trilateral agreement that was a central issue in the 2016 presidential campaign.
The political importance of the agreement aside, the USMCA is a win-win for American workers, businesses and energy consumers, paving the way for sustained U.S. energy leadership and expanded economic growth. Cross-border trade with Mexico and Canada is key to strengthening the domestic energy industry, which has made the United State the world’s leading producer of oil and natural gas. Today, the U.S. counts Mexico as its number one export market for natural gas and refined products, with Canada as its top destination for crude oil.
By solidifying these critical energy partnerships, the International Trade Commission projects the USMCA could support the creation of between 176,000 and 589,000 American jobs, in addition to the 12 million US jobs and nearly $1.3 trillion in trade already sustained by our partnership with Mexico and Canada. With this record of economic development and job creation among these trading partners, it is clear why Presidents Trump and López Obrador would take a victory lap this week.
Posted June 30, 2020
When the “Green New Deal” first was floated in Washington last year, it struggled to gain much altitude and more or less collapsed of its own weight.
The plan proposed dramatic alterations to America – especially the energy sector. Provisions impacting transportation, housing, communications and modern standards of living weren’t very palatable. Ernest Moniz, President Obama’s energy secretary, suggested the plan wasn’t “politically or economically implementable.” Not surprisingly, House leaders didn’t warm to the proposal, and it didn’t gain traction in Congress.
This week the House Select Committee on the Climate Crisis has unveiled a new climate package of market-based mechanisms, government mandates, investments and tax incentives – including promotion of carbon capture utilization and storage (CCUS) and provisions aimed at electric utilities and automakers, who would be told to produce only electric cars by 2035.
While API will review the House proposal according to the API Climate Position and Climate Policy Principles, let’s assert that the forward path on climate must be realistic. This means including natural gas and oil – which will be part of the nation’s energy mix for decades to come – and capitalizing on our industry’s proven ability to help significantly reduce U.S. greenhouse gas emissions.
Posted June 30, 2020
Good technical standards and industry practices are important to safe, sustainable energy infrastructure that is critical to unleashing the benefits of domestic energy – including clean, affordable natural gas.
Major energy players have pointed to new midstream infrastructure investments in the massive Permian region that will allow them to produce more while also improving environmental performance. In addition, this infrastructure will benefit consumers globally through the export of U.S. natural gas – produced right here at home under stringent regulations, many of which point to API’s world-class safety standards that improve environmental performance and sustainability.
Posted June 19, 2020
We’ve discussed the historic link between economic growth and energy – chiefly, natural gas and oil, America’s and the world’s leading energy sources. When the economy grows it boosts demand for energy. And when that energy is supplied, growth is enabled or powered. See this blog by API Chief Economist Dean Foreman, in which he describes data behind our confidence that natural gas and oil will be big participants in the nation’s economic recovery.
Indeed, the indicators of this linkage are visible in API’s June Monthly Statistical Report. Based on May data, the MSR records an increase in U.S. petroleum demand of 2.0 million barrels per day, with motor gasoline leading the way. It’s the largest such increase in nearly 45 years.
Americans are getting back to work, and as they do, they need fuel. Likewise, rising fuel demand reflects increased demand for transportation and delivery of goods and services. As our industry meets this demand, growth is enabled.