Energy Tomorrow Blog
Posted January 31, 2014
We’ve written quite a bit about bad things that could occur because of the Renewable Fuel Standard’s (RFS) mandates for ever-increasing ethanol use in the fuel supply – from potential damage to vehicle engines and small power equipment engines tobroader impacts in the economy. A study by NERA Economic Consulting warned that RFS mandates could lead to fuel rationing and supply shortages that by 2015 could drive up gasoline costs 30 percent and the cost of diesel by 300 percent.
Now EPA is in the last lap in the process to set ethanol use levels for 2014. The agency’s proposal is reduced from where it was in 2013. EPA even acknowledged the ethanol “blend wall” – the point where, to satisfy the RFS, refiners have to blend fuel with higher ethanol content than millions of vehicles are designed to use.
EPA should follow through and set this year’s mandate so we avoid the blend wall and its onerous impacts this year. For a permanent solution, Congress should repeal the RFS.
Posted January 6, 2014
API hosts its annual State of American Energy event on Tuesday at the Newseum in Washington, D.C., and the discussion will focus on choices our country can make to increase energy development, grow jobs and the economy and make us more secure in the world. The event will be streamed live beginning at noon. Join in the conversation on Twitter by using the #SOAE14 hashtag.
The event comes at a time when policymakers are considering important energy issues, some of them framed in recent posts by the National Journal and Politico. At the top of our list of key energy issues:
Keystone XL pipeline
Federal consideration of TransCanada’s application for a cross-border permit passed the five-year mark last fall – which means the Keystone XL could have been built twice in the time the pipeline has been held up by Washington.
Posted December 18, 2013
The U.S.’s Crude Oil Policy
Washington Post: The United States again is one of the world’s great energy powers. On Monday, the U.S. Energy Information Administration projected that American crude oil output will peak at nearly 10 million barrels per day by mid-decade, up from 6.5 million last year. Last month, the International Energy Agency figured that the United States would overtake Saudi Arabia as the top oil producer, at least for a time. Yet some politicians remain unwilling to let the country reap the full benefits of this boon.
For decades, the government has imposed restrictions on exporting domestically produced crude oil but not on refined petroleum products such as gasoline and diesel fuel. This arrangement seemed sensible; the country’s crude business wasn’t booming, but its refining industry was an economic powerhouse deeply embedded in world energy markets.
Now, however, new drilling techniques have resulted in a revitalization of U.S. crude production. But oil firms export only a tiny fraction of the roughly 8 million barrels they extract daily, even though the oil often isn’t the sort U.S. refineries are set up to process. Understandably, they’d like a wider market in which to sell.
Read more: http://wapo.st/18RWgmz
Posted December 13, 2013
Bloomberg Poll: 56 Percent Say Keystone XL Would Help U.S. Energy Security
Bloomberg Businessweek: More Americans view the Keystone XL oil pipeline as a benefit to U.S. energy security than as an environmental risk, even as they say Canada should do more to reduce greenhouse gases in exchange for approval of the project.
A Bloomberg National Poll shows support for the $5.4 billion link between Alberta’s oil sands and U.S. Gulf Coast refineries remains strong, with 56 percent of respondents viewing it as a chance to reduce dependence on oil imports from less reliable trading partners. That compares with the 35 percent who say they see it more as a potential source of damaging oil spills and harmful greenhouse gas emissions.
Read more: http://buswk.co/1gwdBJq
Posted December 10, 2013
EPA held the first of a series of public hearings last week on its 2014 ethanol use proposals under the Renewable Fuel Standard (RFS), during which the National Chicken Council’s Mike Brown observed that the Washington, D.C., hearing basically attracted three groups of people: ethanol producers, corn producers and “the rest of us.”
Quite a bit of truth there. The debate over the RFS finds ethanol backers fairly isolated in arguing that the RFS is fine the way it is and that higher-ethanol blend fuels – like E15 and E85 – should be pushed more aggressively into the marketplace to satisfy the program’s mandates.
The stance has them at odds a number of interests, including consumer and food groups, auto manufacturers, the makers of small-engine vehicles and equipment, turkey and chicken producers, restaurant owners and more. Strikingly, AAA, the venerable travel/motoring organization, has been criticized by Big Ethanol for opposing wider use of E15, which studies have shown could damage engines in vehicles not designed to use it.
Posted December 4, 2013
With the first public hearing on EPA proposals for 2014 ethanol use scheduled Thursday, policymakers should pay attention to how ethanol mandates under the Renewable Fuel Standard (RFS) are affecting regular Americans.
This theme was recurrent during a gathering of diverse, consumer-oriented groups on the eve of EPA’s hearing: RFS mandates are negatively impacting everyday American life, from the fuels we use to the costs of what we eat, and could do additional harm unless Congress takes major action.
Posted December 2, 2013
As EPA opens a 60-day comment period on its proposals for next year’s required ethanol use levels under the Renewable Fuel Standard (RFS), below is a light-hearted reminder that higher-ethanol blend fuels like E15 – which ethanol supporters advocate as a way to meet RFS mandates – pose significant risks for small engines.
Posted November 26, 2013
Marcellus Goliath Transforms Region
Bloomberg: Beneath the rolling pastures and woodland of western Pennsylvania, a corner of Appalachia dotted with Victorian main streets and white church steeples, a radical shift is under way.
In Punxsutawney, home to a groundhog named Phil who prognosticates the weather each February, a $2.8 million hotel is under construction. A few miles away in DuBois, metal fabricator Staar Distributing LLC is expanding to neighboring Brookville. All this development is coming to an economically depressed region that lies atop the Marcellus shale, a rock formation that produces more natural gas than Saudi Arabia.
Output from shale deposits including the Marcellus has surged 10-fold since 2005 to account for a third of the country’s gas production, government data show. The boom has eliminated a regional price premium, redirected pipeline flows and left the nation poised to export the fuel overseas after cutting imports by 44 percent since 2007. It’s also helped make the U.S. 86 percent energy independent, the most since 1986.
“The Marcellus is a Goliath,” David Schlosser, senior vice president for engineering and strategic planning at EQT (EQT) Corp., one of the four largest gas producers in the Marcellus, said in an Oct. 31 interview at the company’s headquarters in Pittsburgh. “In some ways, we’re just at the tip of the iceberg.”
Read more: http://bloom.bg/1icRd9o
Posted November 25, 2013
The Telegraph: The once-sleepy town of Williston sits on the confluence of the Yellowstone and Missouri rivers in the US state of North Dakota.
Five years ago, Williston had a population of 12,000 and was slowly dying on its feet – an agricultural hub marked out from the plains only by the grain silos that stand silhouetted against the big North Dakota skies.
The fall-out from a brief oil boom in the mid-1980s had left the town with sky-high debts and a main street filled with empty shops and peeling facades. Young people looking for jobs skipped town at the first opportunity.
Today, Williston is booming once again. Its streets are filled with bustling commerce and trucks, its bars, restaurants and supermarkets groaning with customers.
Sudden advancements in the oil drilling techniques known as fracking have reinvigorated the small northern town, its population swelling to an estimated 30,000 as people pour in from across the United States in search of work in hard times.
Read more: http://bit.ly/17NWHRs
Posted November 22, 2013
Fracktacular: Oil and Natural Gas Offer a Glimpse of America’s Powers of Regeneration
The Economist: THE FIRST GUSHERS sprayed oil into the skies of Texas, Ohio and California more than a century ago. America has relentlessly drained its reservoirs of oil and gas ever since. In 1986, seeing the flow begin to slow, Robin West founded PFC Energy to advise oil people how to take capital out of the American industry and invest it in newer prospects abroad. As he leaves the company 27 years later, he is amazed to see the money flowing back in record amounts.
In 2006 America’s production of oil and natural gas fell to the equivalent of about 15m barrels of oil a day (b/d). An analysis by the Wall Street Journal recently estimated output today at over 22m b/d—close to surpassing the world’s largest producer, Russia, if it has not already done so. The extra oil comes from shale and sandstone. Estimates of the amount of oil they contain vary hugely, but Navigant, a consultancy, reckons that North America could produce anything from 26.9-53.5 trillion cubic metres of shale gas alone, enough to satisfy the world’s total current demand for gas for up to 15 years, though at today’s prices not all of it would yet be worth extracting.
It is a very American success. Geologists have long known that these reserves existed, but they could not get at them. A combination of innovation (hydraulic fracturing, or “fracking”), finance and enterprise have now opened them up, often to small oil and gas firms with low costs.
Read more: http://econ.st/1aMP4uL