Energy Tomorrow Blog
Posted October 19, 2021
Advancing the use of 3D printing in natural gas and oil operations – a technology that can significantly reduce lead times and drive efficiency, safety and other technological improvements across all oil and gas segments – is the focus of API’s newest standard released this week.
The first edition of Standard 20S – the first of its kind for our industry – supports oil and gas uses of 3D printing, where three-dimensional objects are created under computer control, usually layer by layer. For our industry, 3D printing to create additively manufactured metallic components can bring critical manufacturing functions closer to where components will be used, while maximizing production capability, reducing supply chain stresses and reducing emissions.
Posted October 15, 2021
API’s new Monthly Statistical Report (MSR), based on U.S. petroleum primary market data through September, reinforced a combination of developments that has been recurrent so far in 2021 – that is, demand outpaced supply, inventories fell and, consequently, imports and prices rose.
Historically, this combination of factors has also led to further market tightening, which could put additional upward pressure on costs and prices.
The underlying drivers come back to the basics of demand, which reached a record high for the month of September at 20.6 million barrels per day (mb/d), and supply that has remained muted due to the industry’s continued financial, work force and supply chain constraints, coupled with a lack of policy support as we discussed here.
Posted October 15, 2021
News item #1: Because energy demand has continued to significantly outpace supply, the U.S. Energy Information Administration (EIA) expects U.S. households will spend more money on heating costs this winter compared to last winter – for electricity, natural gas, propane and heating oil.
News item #2: Again, largely due to the demand-supply mismatch that’s further tightened energy markets and put upward pressure on prices, White House officials continue to wrestle with the impacts of higher consumer energy costs, including gasoline.
News item #3: Coal use has climbed, complicating U.S. efforts to reduce carbon dioxide emissions. Bloomberg reports U.S. power plants are projected to burn 23% more coal this year, the first increase since 2013, driven by higher natural gas prices. …
Taking all of this in, let’s make this point: There’s affordable, reliable energy available in the U.S., right now – American natural gas and oil.
Posted October 7, 2021
The fundamentals of natural gas demand outpacing supply have driven prices to their highest for the season since 2008, and some analysts expect a natural gas supply crunch with potentially wide impacts this winter – including potential market tightening that could significantly affect household budgets and perhaps could risk physical hardship for some.
In such a context, many Americans may have a hard time figuring out what’s happening and how it affects them: If natural gas prices have soared, why hasn’t production risen more quickly to meet post-pandemic energy demand and moderate the conditions driving up costs? And another one: Why is the U.S. still exporting liquefied natural gas (LNG)?
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 August 27, 2021
The Biden administration’s plan to hold its first ever oil and natural gas lease sales this year is a positive sign after it paused new leasing on federal lands and waters for nearly seven months. The question is whether this is a significant policy shift for the administration, which will be determined by what actually happens and how swiftly it occurs.
It must be remembered that it has been more than two months since the administration was ordered to lift its leasing pause by a federal judge, and the administration is continuing its appeal of the court’s ruling. Again, it’s fair to ask whether this week’s announcement is a policy change – or something else while the legal case continues?
The answers to that question and others are critically important to future oil and gas development in federally controlled reserves, much of which requires sizeable investment and lengthy planning.
Posted August 24, 2021
The continuing story in Afghanistan is a reminder of how suddenly geopolitical events turn. Stability in the world is fleeting, and we know that global turbulence impacts energy, historically triggering oil price volatility. While the U.S. shale revolution helped keep global oil markets and costs stable, shielding American consumers from many of the impacts caused by destabilizing events in recent years, maintaining and increasing U.S. energy security should never cease to be a top national priority.
American energy security is strengthened by safe and responsible oil and natural gas production here at home. The two supplied nearly 70% of the energy Americans used in 2020, according to the U.S. Energy Information Administration (EIA). And natural gas was the leading fuel for generating electricity, EIA says, with a share nearly four times as large as wind and solar combined.Now, Afghanistan is raising concerns that could roil global trade, including oil markets.
Posted August 19, 2021
We’ve entered a different era in America, one in which this nation, rich in oil and natural gas reserves, publicly begs OPEC+ to increase its crude oil production to offset a U.S. supply-demand imbalance and the highest gasoline prices in years.
Let that sink in: Practically on bended knee, the American president and his administration – leading the world’s No. 1 producer of oil and natural gas – have pleaded with an oil cartel to solve their problem by producing more oil – as they bypass U.S. producers and pursue anti-oil policies here at home. …
Insult to injury: OPEC+ said, sorry, America, we see no reason to meet your request.
Posted August 16, 2021
Some observations follow on the Biden administration’s continued call for OPEC to increase its crude oil production – even as it curbs or discourages U.S. production – plus the president’s recent announcement that he wants the Federal Trade Commission (FTC) to investigate summer gasoline prices.
We’ll take the FTC first. Chair Lina Khan has been asked to look into any potential illegal conduct or anti-competitive practices that may have occurred during the summer driving season.
The U.S. Energy Information Administration (EIA) reported the national average for gasoline reached $3.172 per gallon Aug. 9, the highest point since October 2014. “[T]here have been divergences between oil prices and the cost of gasoline at the pump,” wrote National Economic Council Director Brian Deese. “While many factors can affect gas prices, the president wants to ensure that consumers are not paying more for gas because of anti-competitive or other illegal practices.”
Numerous federal and state agencies have investigated the causes of price spikes for decades and consistently have found that the markets and other factors are responsible for price fluctuations. If the White House truly believes “anti-competitive or other illegal practices” have elevated gasoline prices, it’s strange that it would look to a cartel of oil-exporting countries to help solve the problem. In fact, the administration is floating a false premise on what’s happened this summer with gasoline prices.
Posted August 11, 2021
The White House has big problems with its continued calls for more crude oil production from OPEC – even as it is discouraging U.S. production.
Rising domestic gasoline prices are a political problem for President Biden. … The administration’s political dilemma is that since April 2020, when EIA reported the per-gallon cost of gasoline was $1.938, prices rose to $3.231 last month. The safe assumption is that most Americans have noticed the 66.7% increase at the pump.
The White House response last month was to plead with OPEC to produce more crude oil – and that’s because the cost of crude oil is the No. 1 factor in the retail cost of gasoline. More supply means more downward pressure on crude costs and retail prices.
On Wednesday, President Biden doubled down on the approach, saying the administration wants OPEC to reverse production cuts made during the pandemic to lower prices for consumers. … Therein lies a big energy policy problem.