‘Powering America Past Impossible’ Primer Launches
Posted November 20, 2018
Follow this link to “Powering Past Impossible,” API’s primer on important natural gas and oil industry issues – spanning global economics and energy, natural gas and oil markets and key factors to sustaining and growing the U.S. energy revolution. Eight important takeaways from the primer:
1. Global economic and energy demand growth go hand-in-hand
The greatest recession on record (2008-2009) was just a blip from an energy perspective, and economic growth absolutely requires energy in some way, shape or form (Slide 5).
2. Natural gas and oil lead
Natural gas and oil accounted for more than 55 percent of global energy in 2017, and the U.S. Energy Information Administration (EIA) expects this to remain steady through 2040. This is largely due to the sheer magnitude of growing global energy needs – especially for transportation and materials – the high energy density of oil and natural gas, embedded infrastructure, and enhanced abundance and affordability of natural gas and oil due to the energy renaissance (Slide 6, with Slides 8-9 showing U.S. equivalent).
3. Carbon dioxide emissions have declined
Increased U.S. natural gas use and energy efficiencies have reduced CO2 emissions as energy demand gas grown (Slide 10). Natural gas supplanting coal in the power sector has been the predominant source of emissions reductions and is the primary reason why U.S. energy-related CO2 emissions are at 25-year lows overall.
4. Natural gas markets expected to grow
With globalization, natural gas markets could more than double by 2040 (Slide 16). Key uncertainties concern the globalization of the energy renaissance and also the extent of competition from inter-regional gas pipelines, but liquefied natural gas markets are well poised to grow and increasingly globalize natural gas markets.
5. Refining capacity has grown
Refining capacity has expanded at existing facilities (Slide 23). The U.S. has achieved record refinery throughput over 18 million barrels per day this year and also set new benchmarks for refinery reliability, even as the absolute number of facilities declined. U.S. refineries have been poised for continued investments and expansion, which is great news for the U.S. economy since refining is one of the top industries for follow-on economic activity that results from its growth.
6. Ethanol mandate continues to put consumers at risk
Mandates for ethanol use under the Renewable Fuel Standard (RFS) exceed the amount of ethanol that can be blended as E10 gasoline, which is standard across the country, potentially forcing more higher ethanol blends, such as E15, into the fuel supply (Slide 24). Consumers could be stuck with repair bills for damage caused by using E15 in vehicles that weren’t designed to use it.
7. Natural gas technologies are cutting methane emissions
Technology investments reduced natural gas industry methane emissions even as production grew (Slide 27). Remarkably, natural gas production increased by more than 50 percent between 1990 and 2015, and methane emissions from natural gas systems fell by more than 16 percent. Methane leaks from natural gas development has remained a very small portion of total methane emissions, and industry is committed to reducing them even further through initiatives that include The Environmental Partnership.
8. Industry is leading in greenhouse gas-reducing investments
The U.S. natural gas and oil industry invested $108 billion on zero- and low-carbon technology between 2000 and 2016, more than double the investments of each of the next two industry sectors over the same period (Slide 28).
About The Author
Dr. R. Dean Foreman is API’s chief economist, specializing in energy and global business. With a Ph.D. in economics from the University of Florida, he came to API from Saudi Aramco Strategy & Market Analysis in Dhahran, where he managed short-term market monitoring and the long-term oil demand outlook. Foreman has more than 20 years of industry experience in corporate strategic planning, forecasting, finance / risk management and regulatory policy at ExxonMobil, Talisman Energy and Sasol North America.
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