Energy Tomorrow Blog
Harvey Update: Supply, Demand and Gasoline Markets
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Mark Green
Posted September 5, 2017
Before then-Hurricane Harvey first made landfall, we discussed how mega-weather events historically have impacted the regional/national oil supply chain and supply levels in the marketplace. The uncertain path of Hurricane Irma will drive continued conversation about storm effects on refineries and other energy infrastructure and the potential for market impacts around the country. That’s the context for some basics about the fuel marketplace and the processes that bring finished consumer products from refineries to retail outlets.
The Facts About Natural Gas Storage
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Marty Durbin
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.
Taking Stock of America’s Energy Revolution
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Mark Green
Posted May 26, 2015
Reuters: U.S. Republicans have had to watch from the sidelines as the Obama White House has taken political credit for America's unexpected energy boom and tumbling gas prices. Now it has left their presidential candidates scrambling for a way to reclaim leadership on an issue the party once seemed to own.
Their apparent answer: calling time on a 40-year-old federal ban on crude oil exports and using the newfound energy bounty to strategic advantage.
"We've got an abundance of supply," Wisconsin Governor Scott Walker said this week in Oklahoma at a gathering of putative Republican candidates for next year's presidential election. Lifting the ban, he said, would allow exports to "our allies in Europe, where, instead of being dependent on (President) Vladimir Putin and the Russians, they could be dependent on Americans."
Maritime System Delivers Energy for America
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Mark Green
Posted May 26, 2015
Thinking about American energy, one underappreciated component is our national maritime system – connecting sources of oil with U.S. destinations and also exported domestic resources that help make the U.S. an energy superpower. National Maritime Day last week reminds us of the vital link this system provides in the energy supply chain.
Noteable: America’s marine highway system consists of more than 29,000 nautical miles of navigable waterways – the most extensive system in the world – infrastructure that’s vital to our economy, about 42 percent of all waterborne trade in the U.S. in 2012 was comprised of crude or petroleum products, reflecting the fact the U.S. imports about 10 million barrels of oil per day and more.
U.S. Energy – It’s All About Supply
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Mark Green
Posted May 19, 2015
Solid bipartisan support for important energy legislation is on display in the U.S. Senate, with members of a key committee considering a number of ways to increase access to domestic supplies of oil and natural gas – as well as bills ending 1970s-era restrictions on U.S. crude oil exports.
Energy security is about having secure, reliable energy supplies to fuel broad economic expansion and create opportunity for individual Americans. When we remove outdated export restrictions, allowing U.S. energy to reach global markets, studies have detailed how domestic production will be stimulated – again, creating jobs and economic growth here at home. API Executive Vice President Louis Finkel talks about new legislation offered by Democrat Heidi Heitkamp, similar to legislation offered last week by Republican Lisa Murkowski, that would lift the crude export ban and boost U.S. energy:
“Bipartisan leadership on this issue keeps the focus on the consumers and workers that will benefit from free trade in crude oil. … Study after study shows that lifting outdated limits on crude exports will allow America to create more jobs, cut the trade deficit, grow the economy, and put downward pressure on fuel costs. Exports will help keep U.S. production strong in a tough market, and they will provide our allies with an important alternative to energy from less friendly regimes.”
EPA. RFS. Reality.
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Mark Green
Posted October 20, 2014
Update: EPA waves white flag on 2014 RFS requirements.
Interesting Reuters piece last week on the Renewable Fuel Standard (RFS) and very tardy 2014 ethanol-use requirements, now more than 10 months overdue from EPA. Reuters reports:
The Obama administration is trying to balance its support for renewable fuels with awareness of infrastructure constraints at gas stations as it finalizes targets for 2014 biofuel use, agency officials said on Tuesday. But with only 11 weeks left in the year, the administration also needs to weigh oil refiners' ability to comply with the long-delayed requirements, one official told the Reuters Global Climate Change Summit.
The article goes on to quote Janet McCabe, who leads EPA’s division overseeing the biofuels program:
(McCabe) acknowledged that delays in setting the targets, formally called the Renewable Fuel Standard (RFS), should be taken into account. "We need to be mindful of where we are in the year," McCabe said …
Reuters reports that EPA had proposed lowering ethanol mandates for 2014 because the U.S. was on a collision course with the 10 percent blend wall – the point where RFS mandates will require ethanol to be blended into gasoline at levels higher than the 10 percent fuel (E10) for which most of today’s vehicles were designed.
U.S. Crude Production to the Rescue
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Mark Green
Posted September 25, 2014
Supply matters. According to U.S. Energy Information Administration (EIA) chief Adam Sieminski, crude oil could cost at least $150 a barrel today because of supply disruptions in the Middle East and North Africa – if not for rising U.S. crude production.
Sieminski told the North Dakota Petroleum Council’s annual meeting that crude from the Bakken, Permian and Eagle Ford shale plays and others around the country has spiked in the past decade to more than 4 million barrels per day – enough to make up for outages in crude production elsewhere. Sieminski:
“If we did not have the growth in North Dakota, in the Eagle Ford and the Permian, oil could be $150 (per barrel). There is a long list of countries with petroleum outages that add up to about 3 million barrels per day.”
So, let’s rephrase things a bit: Clearly, U.S. production, adding to global supply, matters. A lot.
Shale Energy Fuels Local Economies, Creates Opportunity
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Mary Schaper
Posted September 10, 2014
Reuters: The U.S. government on Tuesday jacked up its forecast for oil production next year by 250,000 barrels per day (bpd) as the boom in shale oil drilling continues to confound expectations of slower growth.
The U.S. Energy Information Administration now expects domestic output to rise to 9.53 million bpd, growing by around 1 million bpd for a third consecutive year, according to its latest monthly short-term energy outlook. A month ago the EIA had predicted output growth would slow in 2015 to 800,000 bpd.
The U.S. shale boom has allowed producers to unlock thousands of barrels of reserves, putting the United States on course to become the largest producer of oil globally, which would dramatically reduce its dependence on imports.
"Rising monthly crude oil production, which will approach 10 million barrels a day in late 2015, will help cut U.S. fuel imports next year to just 21 percent of domestic demand, the lowest level since 1968," EIA Administrator Adam Sieminski said.
American Energy Boosts World Supplies, Drives Economic Growth
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Mary Schaper
Posted March 14, 2014
Surge in Oil from U.S., Canada Helps Meet Global Demand
Wall Street Journal: LONDON—The dramatic increase in oil supply from the U.S. and Canada—coupled with a surprise surge in Iraqi output—helped stave off global demand pressures brought on by a cold U.S. winter and geopolitical concerns over rising tensions between Russia and Ukraine.
The International Energy Agency, a watchdog for the world's biggest energy consumers, said North American output helped mitigate a bigger-than-expected draw from global crude inventories, caused by a colder than usual winter in the U.S. Surging Iraqi crude output, which rose to its highest level since 1979, also helped keep global markets supplied, and prices in check.
EIA's Outlook: Flush With U.S. Energy
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Mark Green
Posted December 16, 2013
The U.S. Energy Information Administration (EIA) offered a preview of its 2014 Annual Energy Outlook that will come out next spring, and the second slide in Administrator Adam Sieminski’s presentation is an attention grabber, charting how expanding domestic oil production will reach historic levels in 2016 – 9.6 million barrels per day, a mark set in 1970.