Energy Tomorrow Blog
MSR: June Petroleum Demand Outpaces Supply, Imports Rise
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Dean Foreman
Posted July 21, 2021
It’s great for the U.S. economy that, with urban re-openings and the onset of the summer driving season, petroleum demand returned to over 20 million barrels per day (mb/d) in June, according to API’s primary data presented in our latest Monthly Statistical Report (MSR).
However, domestic oil supplies have not been able keep pace, and consequently U.S. crude oil imports and consumer prices have suddenly risen, which ultimately could contribute to the list of expenses stressing household budgets, such as higher costs for housing, vehicles and many other goods and services.
Study: Industry’s Broad Shoulders Support U.S. Economic Recovery
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Mark Green
Posted July 20, 2021
Natural gas and oil are the energy foundation for U.S. economic growth, job creation and the opportunity for Americans to prosper all across the country. This is seen in a new analysis of our industry’s economywide and countrywide impacts: 11.3 million jobs supported in 2019 across all 50 states and the District of Columbia – generating 3.5 additional jobs elsewhere in the economy for each direct industry job, accounting for 5.6% of total U.S. employment; supported nearly $1.7 trillion to U.S. gross domestic product, or nearly 8% of the national total; supported nearly $900 billion in labor income or 6.8% of U.S. national labor income.
The analysis by PwC commissioned by API is based on the latest available government data (2019). Like other industry and business sectors, our industry was hard hit by the economic effects of the 2020 pandemic, but the 2019 data – generated during a period of robust U.S. growth, indicates the importance of the natural gas and oil industry post-pandemic, as the U.S. and global economies and petroleum demand ramp up. The U.S. Energy Information Administration projects (EIA) that 2022 global oil and liquid fuels demand will eclipse 2019 levels.
Given EIA’s forecast, it’s critically important that national policy supports – and doesn’t hinder – domestic natural gas and oil production.
Good News: Permitting … Uncertain News: Leasing
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Mark Green
Posted July 15, 2021
As we await the Biden administration’s report on the federal natural gas and oil leasing program, let’s note the welcome news that oil and gas permitting approvals this year are on track to reach their highest levels since George W. Bush was president.
Permitting at that pace is good for near-term U.S. production, no question. In January, when the administration suspended new oil and gas leasing on federal lands and waters, it said permitting would continue, and it has. The country benefits from safe, responsible and robust domestic natural gas and oil production.
Americans shouldn’t conflate permitting and leasing. Drilling permits are issued when companies are ready to develop from acreages, onshore and offshore, previously leased from the federal government. Put another way, leases typically are secured years before development occurs. We’re seeing permits go through at a significant rate because investment and planning have been completed and acreages are ready to go into production. Permitting is about production that’s imminent; leases represent energy in the future.
Keeping the Focus on Getting Cybersecurity Right
Mark Green
Posted July 14, 2021
A good cybersecurity discussion in the Wall Street Journal this week, featuring API’s Suzanne Lemieux, Accenture’s Jim Guinn and the University of Houston’s Chris Bronk. The conversation was a follow-up to the cyberattack on the Colonial Pipeline in May, which caused serious fuel disruptions along the East Coast.
We’ve previously pointed out that protecting the nation’s natural gas and oil infrastructure is critically important to maintaining U.S. energy affordability and economic competitiveness. Our industry recognizes this and has been deeply engaged with government agencies and a broad range of private sector stakeholders facing similar cyber threats, while pointing out that the Colonial attack underscores our country’s need for more energy infrastructure.
Eight Points – Natural Gas, Reducing Emissions and Environment
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Mark Green
Posted July 12, 2021
There’s a good deal of discussion in Washington about a national clean electricity standard, which would use government mandates to set targets for reducing carbon emissions from the power sector.
Such an approach is one way to go, but there’s another – one that already has achieved significant greenhouse gas emissions by using the power of the marketplace to effect change: U.S. natural gas.
The increased use of natural gas is the leading reason for reduced U.S. emissions in recent years, including carbon dioxide. At the same time, technologies and industry innovation have helped reduce methane emissions associated with natural gas and oil production, and new advances are on the horizon. This pathway leads to a lower-carbon future and the ability to meet growing world demand for energy.
U.S. Mostly a Spectator While Others Address Supply-Demand Pinch
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Mark Green
Posted July 8, 2021
The Biden administration says it is keeping a close eye on the OPEC+ talks on crude oil production because, as White House Press Secretary Jen Psaki said, it wants “Americans to have access to affordable and reliable energy at the pump.”
Unfortunately, the U.S. is mostly a spectator as OPEC+ debates crude oil supply, which continues to be outpaced by demand, putting upward pressure on crude costs. Because the cost of crude is the biggest factor in gasoline prices, U.S. pump prices have reflected this mismatch between demand and supply.
High Court Supports Certainty in Natural Gas Pipeline Approval Process
natural gas pipelines ferc consumers
Mark Green
Posted July 7, 2021
To serve consumers, support economic growth and help protect the environment, the U.S. needs more natural gas pipeline infrastructure. Last week’s U.S. Supreme Court decision – that states do not have an outsized authority to block federally approved projects from obtaining the land for those pipeline routes – is a significant step forward for those purposes.
The decision underscores the authority of the Federal Energy Regulatory Commission (FERC) under the federal Natural Gas Act (NGA) to review and approve pipeline projects that demonstrate a public necessity and cross state lines, such as the 116-mile PennEast natural gas pipeline from Pennsylvania to New Jersey.
The NGA delegates the federal government’s eminent domain authority to private parties once FERC has approved and certified the pipeline project, which allows those who invest in and build pipelines to have regulatory certainty and a clear permitting process.
Growing Momentum for Carbon Capture
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Mark Green
Posted July 2, 2021
Carbon capture, utilization and storage (CCUS) is a rarity in Washington: a technology that apparently is liked by just about everyone – Democrats, Republicans and Independents alike. It certainly looks like the future for CCUS – identified in API’s Climate Action Framework as key in addressing the risks of climate change while also developing the energy America needs to grow and be safe – is bright.
That’s the big takeaway from this week’s webinar by Our Energy Policy, a non-profit facilitator of civil dialogue on energy policy issues. Event panelists agreed that CCUS generally and specifically, the 45Q tax credit to spur CCUS projects, has lawmakers on Capitol Hill practically locking arms in support.
Fast-tracking the commercial scale-up of CCUS is a major industry priority, because it allows continued robust natural gas and oil development while simultaneously reducing carbon dioxide associated with that development.
Q&A: The Demand/Supply Dilemma, Consumer Impacts and the Need for Sound Policy
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Mark Green
Posted July 1, 2021
In recent weeks API Chief Economist Dean Foreman has noted the return of petroleum demand, as economies strengthen in the U.S. and globally, to a level that’s outpacing supply (see here). In the Q&A that follows, Dr. Foreman discusses the impacts of the supply-demand mismatch on American consumers and markets, as well as the consequences of the Biden administration’s energy policy signals.
America’s Energy ‘Inflection Point’
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Mark Green
Posted June 29, 2021
During a speech to the Houston Economics Club last week, API President and CEO Mike Sommers talked about the United States reaching an “inflection point” in terms of its energy and economic future. Choices made today could have impact far into the future.
As the world’s leading producer of the world’s leading energy – natural gas and oil – the U.S. can choose the market-based approach that over the past decade led to abundant domestic energy, supporting economic growth, reducing reliance on foreign oil and building greater security.
The other choice is the apparent approach of the Biden administration to curtail domestic production of natural gas and oil, swapping their reliability and affordability for aspirational fuels that could take the U.S. back to a period of energy uncertainty.