Energy Tomorrow Blog
Posted February 5, 2016
Our industry’s continuing commitment to safety is underscored in a new federal advisory bulletin on underground natural gas storage facilities that urges field operators to implement industry best practices developed by API and other organizations. The Pipeline and Hazardous Materials Safety Administration (PHMSA):
Operators must adhere to applicable State regulations for the permitting, drilling, completion, and operation of storage wells. In developing, implementing, and updating their safety and integrity programs, we encourage underground gas storage facility operators to … voluntarily implement American Petroleum Institute (API) Recommended Practices (RP) … and Interstate Oil and Gas Compact Commission (IOGCC) standards entitled “Natural Gas Storage in Salt Caverns – A Guide for State Regulators” (IOGCC Guide), as applicable. … API has an accredited process to develop recommended practices and standards that involves industry, manufacturers, engineering firms, construction contractors, the public, academia, and government.
API worked with other trade associations and PHMSA to develop two recommended practices (RPs) last year – one focused on safe practices for designing, storing and operating natural gas in depleted oil and gas reservoirs, and another detailing how to safely design, store and operate natural gas in salt caverns. Both RPs discuss proper construction methods, materials and maintenance practices to ensure safe operations.
Posted January 15, 2016
Federal officials followed President Obama’s State of the Union pledge to change Washington’s management of fossil fuel resources by announcing the government will stop issuing new coal leases on federal lands. The president’s keep-it-in-the-ground energy strategy, first voiced when he rejected the Keystone XL pipeline last fall, continues unfolding.
Unfortunately, the president doesn’t seem aware that his administration could blow a generational opportunity for America, one that’s being provided by the ongoing revolution in domestic oil and natural gas production. That he doesn’t see it helps explain the disconnect in his connecting of these thoughts during the State of the Union:
“… we’ve cut our imports of foreign oil by nearly 60 percent, and cut carbon pollution more than any other country on Earth. Gas under two bucks a gallon ain’t bad, either. Now we’ve got to accelerate the transition away from old, dirtier energy sources.”
Respectfully, Mr. President, falling oil imports, reduced U.S. carbon emissions and $2 gasoline are reasons to sustain and grow America’s energy revolution – not reasons to kneecap it.
Posted January 5, 2016
There are many ways to gauge the current strength of American energy. The U.S. is producing nearly twice as much oil as it did less than a decade ago, which, combined with natural gas output, has made America the world’s leading producer.
Yet, the real-world impact of America’s energy revolution offers a more meaningful picture. New tensions are roiling the Middle East, yet global crude markets have remained relatively calm – unimaginable a few years ago. Meanwhile, a tanker carrying U.S. crude oil left port headed for Europe – the first since the lifting of America’s 40-year-old ban on domestic exports. There’s the reach of our energy revolution.
In his State of American Energy remarks, API President and CEO Jack Gerard focused on the growth of U.S. energy and its benefits – and also the opportunity to sustain them with sound energy policies based on facts and science.
Posted January 4, 2016
As we write, the United States is once again an exporter of crude oil. Sure, in the past the federal government has allowed limited crude exports. The oil tanker that left the Port of Corpus Christi, Texas, late last week is the bearer of the first freely traded U.S. crude in about four decades – made possible by congressional legislation that President Obama signed to end a 1970s-era ban on exports. It’s a new day indeed.
But wait, there’s more. Cheniere Energy says it has begun liquefying natural gas at its new export terminal in Louisiana, setting the stage for its first LNG export cargo this month.
Both are big-time energy developments for the United States – opportunities created by a domestic energy revolution largely driven by safely harnessing vast shale reserves with advanced hydraulic fracturing and horizontal drilling.
Posted December 22, 2015
Lifting the ban is also a security win for the U.S. and our allies. With the administration’s push to allow Iran to export its oil to the global market, it’s time for U.S. producers to have the same opportunity. Our allies around the world are eager to reduce their reliance on energy from less friendly nations.
Posted December 11, 2015
Then there’s this from Alaska: Falling oil revenues have the governor in that energy-rich state asking his legislature to plug a $3.5 billion hole in the state budget by imposing a small income tax (Alaska hasn’t had one for 35 years), other tax hikes, budget cuts and a reduction in the annual dividend Alaskans get from the state’s Permanent Fund.
Now, it might not bother you much that Alaskans soon could be paying higher taxes. But there’s another story playing out in Alaska and other places that should trouble all Americans: Access to U.S. energy is being restricted – by policy and regulation – in ways that could imperil America’s energy revolution and the generational opportunities that are being created by that revolution.
Posted December 9, 2015
The U.S. shale energy revolution is a game-changer – for the United States and the world’s energy balance. The U.S. has become the No. 1 producer of oil and natural gas, resulting from a domestic energy renaissance driven by advanced hydraulic fracturing and horizontal drilling – fracking. And the positive impacts are all around us.
U.S. crude imports are down, and American energy self-sufficiency is up. An America that’s more energy self-sufficient is more secure. Meanwhile, the global crude market is better supplied and more stable – thanks to the availability of crude that would have been imported to the U.S. Domestic pump prices reflect this well-supplied market. At the same time, greater use of natural gas has increased each American household’s disposable income by $1,200, and IHS says the benefit will grow to more than $3,500 in 2025. Thanks, fracking.
Posted October 13, 2015
Last week’s bipartisan U.S. House vote to end America’s 1970s-era ban on crude oil exports is stirring needed debate over U.S. energy and trade policy as the exports issue advances in Congress. Unfortunately, much of the conversation remains focused on the wrong things.
For example, export opponents continue to say the United States shouldn’t export crude oil as long as it’s an oil importer. We rebutted that economically faulty position here. Access to global markets means bringing overseas wealth to the United States. Conversely, shutting in a domestic commodity is an obstacle to production and economic growth. The oil imports/exports threshold is one that isn’t applied to other domestic goods – and for good reason: Access to global markets is good for domestic producers.
Posted June 10, 2015
BloombergBusiness – The U.S. has taken Russia’s crown as the biggest oil and natural-gas producer in a demonstration of the seismic shifts in the world energy landscape emanating from America’s shale fields.
U.S. oil production (green line in chart, left) rose to a record last year, gaining 1.6 million barrels a day, according to BP Plc’s Statistical Review of World Energy released on Wednesday. Gas output also climbed, putting America ahead of Russia as a producer of the hydrocarbons combined.
The data showing the U.S.’s emergence as the top driller confirms a trend that’s helped the world’s largest economy reduce imports, caused a slump in global energy prices and shifted the country’s foreign policy priorities.
“We are truly witnessing a changing of the guard of global energy suppliers,” BP Chief Economist Spencer Dale said in a presentation. “The implications of the shale revolution for the U.S. are profound.”
Posted January 16, 2015
Bloomberg: Ending restrictions on U.S. crude exports could cut gasoline prices as much as 12 cents a gallon, a Columbia University study co-written by a former adviser to President Barack Obama has concluded.
Without the partial ban, domestic production might increase as much as 1.2 million barrels a day by 2025, making the U.S. more resilient to global supply disruptions, according to the study.
“Easing energy export restrictions does not raise gasoline prices for consumers,” Jason Bordoff, a former energy and climate adviser to Obama who is now director of the Center on Global Energy Policy at Columbia University, said in a telephone interview.