Energy Tomorrow Blog
Posted September 23, 2021
This week I addressed the Economic Club of Pittsburgh – in the heart of Pennsylvania’s natural gas and oil region – and I talked about the state’s critical importance to the larger U.S. energy picture and the key role our industry plays in meeting the challenge of supplying the energy that powers our nation and also in reducing emissions, toward a lower-carbon future.
Energy has transformed Pennsylvania and continues to do so. Pennsylvania’s natural gas and oil industry directly and indirectly supported nearly a half million jobs across the commonwealth’s economy in 2019. Our industry’s total economic contribution to Pennsylvania ranked among the highest in the nation, with more than $78 billion directed to the state’s GDP – including nearly $41 billion in labor income.
Posted September 22, 2021
Three things to keep in mind as we mark Climate Week:
First, industry-led initiatives continue reducing greenhouse gas emissions; second, natural gas helps cut carbon dioxide emissions and address energy poverty; and third, the natural gas and oil industry continues to think strategically while acting tactically.
Posted September 22, 2021
Economics and energy market data for the third quarter of 2021 were marked by divergences. That’s the main thrust of API’s quarterly Industry Outlook for Q3 2021 and Monthly Statistical Report (MSR) with primary data for August.
Demand for oil and natural gas has risen strongly along with the economic recovery, as we discussed here. At the same time, global oil and natural gas investments have fallen to record lows so far in 2021, (see here). Consequently, supplies have failed to keep pace with demand and generally resulted in lower inventories, higher U.S. imports and the strongest prices for crude oil, gasoline and natural gas since 2014.
Posted September 17, 2021
Global oil and natural gas investments have fallen to record lows so far in 2021, as we recently discussed here. Yet, demand for both has risen alongside the economic recovery. Consequently, supplies haven’t kept pace with demand, and the mismatch between the two propelled gasoline and natural gas prices this summer to their highest levels since 2014.
In fact, global natural gas prices set a record-high for summer months as demand outdistanced supply. Oil prices eased in August following a 16% run-up over the previous three months for Brent crude oil, but were back above $70 per barrel in mid-September.
Although economic and pandemic-related uncertainties and expected OPEC+ output increases have also likely impacted prices, the lack of investment for oil and natural gas production is an ominous sign, given that major conventional global oil and natural gas projects can take years to start producing. We could be in for global oil market tightening in 2022 and further upward pressure on prices, with prices already at their highest level since 2014.
Posted September 15, 2021
We’ve long made the point that natural gas is the essential partner for the growth of wind and solar energy (see here, here and here). You simply must have a partnering energy source, in sufficient quantity, to fuel power generation and maintain reliability when the wind doesn’t blow and/or the sun doesn’t shine.
Just ask Europe and California. Both are experiencing conditions that make this case.
The two also underscore the flaw in policy proposals that exclude natural gas from the future energy mix – as does the Clean Electricity Performance Program (CEPP) now being debated in Congress.
Posted September 14, 2021
It’s pretty easy to get lost in the trees of The Environmental Partnership’s newest results data, contained in its new annual report – including the new flare management program’s reported 50% decrease in flare volumes from 2019 to 2020, plus hundreds of thousands of surveys and hundreds of millions of component inspections. Those numbers are important, but there’s another big story behind them.
It’s a story of progress – tangible, beneficial, significant progress by the natural gas and oil industry toward a lower-carbon future and a smaller environmental footprint. The numbers show industry’s steady progress in lowering emissions even as it continues to produce the affordable, reliable energy Americans use every single day.
Thoughtful analysis supports the case we’ve been making, that the U.S. and the world need both.
Posted September 10, 2021
This week, API detailed the latest on three important ways the natural gas and oil industry is reducing its emissions. The information can be found in The Environmental Partnership’s new annual report, which outlines more than 90 companies’ recent work to cut significant sources of natural gas and oil emissions.
Some highlights and key actions from the annual report include reduced flare volumes, detecting and repairing leaks and replacing pneumatic controllers at facilities.
Posted September 9, 2021
Levying a fee on the methane emissions of the U.S. natural gas and oil industry, under consideration as part of the reconciliation package in Congress, is the wrong way to address emissions and could hinder the U.S. economy, national security and environmental progress.
This week API and dozens of organizations representing producers, distributors and users of natural gas, oil and natural gas liquids opposed the “Methane Emissions Reduction Act of 2021” in a letter to Senate Environment and Public Works Committee Chair Tom Carper (D-DE) and Ranking Member Shelley Moore Capito (R-WV).
Here are three reasons why a methane fee should be rejected by lawmakers on both sides of the aisle.
Posted September 2, 2021
As the administration looks to foreign nations to boost energy production, the House Natural Resources Committee’s baseline reconciliation bill, as unveiled, proposes a double-whammy of punitive policies to discourage U.S. energy development with new, targeted measures against the U.S. natural gas and oil industry. That combination could lower domestic production and boomerang the U.S. back to 1970s-era dependence upon foreign energy imports.
Most concerning, instead of advancing effective solutions that build on the nation’s progress in reducing emissions, the committee would inundate producers with a myriad of new taxes and fees to create a de facto natural gas and oil development ban on federal lands.
As the full committee works on the proposal, a course correction is urgent as the broader, multi-trillion dollar reconciliation package takes shape. Read on about why the committee’s proposal could harm the environment, weaken the economy and jeopardize America’s national security.
Posted September 1, 2021
One of the great stories of the U.S. energy revolution is that, as it broke productivity records, it ultimately imposed downward pressure on the prices for energy and other goods and services, benefiting U.S. household budgets.
Yet, so far in 2021, prices have risen for energy and most other goods – and could bring unfavorable surprises for macroeconomic policies and households alike.