Energy Tomorrow Blog
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.
Posted June 18, 2020
As the U.S. and world confront the unprecedented combination of a public health crisis, significant economic downturn and tumultuous domestic and global oil markets, we have seen oil demand, prices, and consequently drilling and production fall by historic amounts.
Overall, we see market forces at work, with a re-balancing of supply and demand to historic proportions despite great uncertainties. The underlying fundamentals appear to be constructive and should position the U.S. natural gas and oil industry to participate in an economic recovery. And if the third-party consensus is correct the next year or so could bring positives for U.S. and global energy.
Posted June 17, 2020
Delivering what’s essential. It’s at the heart of what our industry does – and it’s never been more important than right now.
The pandemic has focused Americans on health, safety, family and other critical priorities.
At the same time, we’ve been reminded that the heroes in this crisis are first-responders, doctors and nurses. We’ve also become aware that others – including people working at supermarkets, pharmacies, fuel stations and in modern communications networks – also serve in indispensable roles.
These contributions are highlighted in API’s new video, “Essential."
Posted May 19, 2020
Natural gas’ economic competitiveness continues, even amid the highly unexpected market conditions associated with the coronavirus pandemic – outcompeting coal, the No. 2 fuel for power generation.
While consumer electricity use patterns are changing as power demand throughout the country has declined during the coronavirus crisis, natural gas is playing a growing role in meeting that demand.
This shift towards greater reliance on natural gas – along with a corresponding decline in coal-fired generation – has been a key feature of the U.S. power sector for most of the past decade, and the current environment appears to be accelerating this trend. In fact, the coal-to-gas transition is starker during this historic season as lower electricity demand, coupled with low natural gas prices, is providing added incentive for power suppliers.
Posted May 12, 2020
We’ve highlighted the way many Americans and different business sectors, including ours, have helped with relief efforts during the COVID-19 crisis (see here). We’ve also said that natural gas and oil will be leading players as our economy and communities recover.
We’re especially grateful for people on the front lines of the pandemic – doctors, nurses, hospital staffs, first responders, grocery store workers and others who are out there in public spaces every day. API’s new video, “Good Energy,” is our way of saying thanks for what they’re doing to help the rest of us through the crisis and a sign of our industry's commitment to keep supporting them.
Posted May 11, 2020
With the global economy reeling, affordable natural gas is more important than ever.
U.S. emergence as a major energy producer means the natural gas market has never been more flexible, more reliable or more adaptable to changing conditions – including a global pandemic. Millions benefit daily from the use of natural gas in power generation and home heating, and when the world begins to safely return to normal, U.S. natural gas is positioned to balance our economic recovery with environmental progress.
Posted May 8, 2020
Some anti-industry voices – apparently not regular readers of this blog – probably missed Monday’s post discussing the strong link between the economy and energy from natural gas and oil.
Not surprisingly, these are the folks arguing that the current coronavirus-associated market downturn surely means the end is near for U.S. oil. Some have cheered the challenges industry faces, with one tweeting that natural gas and oil jobs (good-paying ones, I’ll add) belong in history’s rubbish bin, comparing them to two of the most odious occupations of the past. Well, no one’s going to confuse social media with a friendly game of bean bag, right?
The trouble with these arguments is they’re grounded purely in ideology and neglect that economic, energy, human progress and development go hand-in-hand. As noted in the earlier post, data and history indicate that while the U.S. natural gas and oil industry is working through significant COVID-19 challenges right now – along with a number of other business and industrial sectors – it is poised to power economic recovery as personal driving and commercial traffic increase (fuels), as businesses reopen (electricity) and as manufacturers ramp up operations (power/feedstocks).