Energy Tomorrow Blog
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 26, 2021
Calls for new government cybersecurity mandates to protect the nation’s energy infrastructure after the ransomware attack on the Colonial Pipeline earlier this year failed to acknowledge some key things about addressing cyber threats, including:
Cybersecurity not only threatens the pipeline industry, but also all critical infrastructure, industries and even government entities.
The speed with which such threats are evolving, making it unlikely legislation and regulatory processes could keep up.
The degree to which our industry already is engaged with government agencies to identify emerging cyber threats.
Our industry’s strong commitment to take the initiative in protecting its infrastructure and other assets.
That last point provides context for the release of API’s updated Standard 1164, covering pipeline control systems cybersecurity.
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
As the summer driving season motors on, we’re watching not only the impacts of seasonally higher gasoline prices on U.S. households, but also costs in other areas affecting family budgets – and whether those costs are seasonal or longer-lasting. This is the context for API’s new Monthly Statistical Report (MSR), based on July data.
As we discussed here, U.S. consumers have benefitted recently from fuels and products derived from relatively inexpensive domestic crude oil and natural gas – well below international price levels. This was due to abundant domestic crude oil production.
That’s changed now. Domestic production is lower, partly due to the aftereffects of the 2020 COVID-19 recession as well as the delay or cancellation of energy projects that take years to complete. In this sense, the pulse of U.S. petroleum markets is vital, and API’s primary data can offer a leading perspective.
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.
John D. Siciliano
Posted August 18, 2021
Expanding the use of carbon capture, utilization and storage technology (CCUS) to commercial scale, by our industry and others, is integral to a lower-carbon future (see API’s Climate Action Framework). Elements of the latest edition of API’s most widely used pipeline standard provide important support for CCUS expansion.
API Standard 1104 (22nd edition, “Welding Pipelines and Related Facilities”) includes new technology and safety provisions for pipeline transportation of not only oil but also carbon dioxide collected by CCUS technology for storage or use in a variety of technologies and essential products – including construction materials, a range of cleaner-burning fuels, carbon nanotubes for advanced electronics and batteries, and other critical materials.
API Standard 1104 provides requirements for the types of welding needed to construct and maintain pipelines that transport both conventional commodities and carbon dioxide. The standard’s updated requirements are designed to enhance pipeline safety, structural integrity and efficiency through application of API’s world-class standard.
Posted August 17, 2021
The American Petroleum Institute (API) and 11 other energy industry trade groups filed a lawsuit on Monday in the U.S. District Court for the Western District of Louisiana challenging the U.S. Department of the Interior’s (DOI’s) indefinite pause on oil and natural gas leasing on federal lands and waters.
Following the lawsuit’s filing, DOI said it would resume oil and gas lease sales, even as it appeals a separate court ruling that said its pause on such sales likely violated federal law. Policymakers across the political spectrum agree that President Biden must end the indefinite federal leasing pause once and for all. Only then can America unleash its resource potential and safeguard our decades-long progress toward energy leadership and geopolitical security.
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 12, 2021
Expanding carbon capture, utilization and storage (CCUS) has backing from the Biden administration, reflected in a new report to Congress from the White House’s Council on Environmental Quality (CEQ).
The report pledges the administration’s commitment to “accelerating the responsible development and deployment of carbon capture, utilization, and permanent sequestration as needed to decarbonize the U.S. economy by mid-century.”
We agree, because CCUS expansion will help industries across the economy – not just natural gas and oil – reduce emissions. Industries that rely on high heat or have process emissions, including cement and steel manufacturing, can benefit from CCUS. Check API’s Climate Action Framework to learn more about our industry’s support for CCUS.
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.