Energy Tomorrow Blog
Posted August 17, 2015
Late last week the Obama administration gave the go-ahead for limited domestic crude oil exports to Mexico, a positive move on oil exports – yet one that immediately underscores this question: Why stop there?
According to the Associated Press, license applications approved by the Commerce Department allow the exchange of similar amounts of U.S. and Mexican crude, a swap. The U.S. would send an as-yet unspecified amount of light crude to Mexico in exchange for heavier Mexican crude. AP:
While the Commerce Department simultaneously rejected other applications for crude exports that violated the ban, the move to allow trading with Mexico marked a significant shift and an additional sign that the Obama administration may be open to loosening the export ban. Exchanges of oil are one of a handful of exemptions permitted under the export ban put in place by Congress.
Two things: First, the arrangement with Mexico, while limited in scope, nonetheless is the administration affirming the inherent benefits of trade. The light crude in the deal represents some of the domestic oil that’s accumulating and trading at a discount to global prices, unable to reach the world market because it’s shut in by an outdated, anti-competitive oil exports ban. Second, the U.S. needs to go further.
Posted August 11, 2015
The U.S. Commerce Department’s recent mid-year trade report illustrates how surging domestic oil and natural gas production is helping our economy – and strongly suggests what increased domestic output could do if U.S. crude oil and liquefied natural gas (LNG) had unhindered access to global markets.
According to Commerce, the U.S. trade deficit among petroleum and petroleum products fell 56.1 percent the first six months of this year compared to the first six months of 2014 (exhibit 9). That growth helped hold the total U.S. year-over-year trade balance steady, even as the trade deficit in non-petroleum products increased 23.1 percent. API Chief Economist John Felmy:
“Despite a very competitive global market, the U.S. energy revolution continues to push our trade balance in a positive direction. Oil imports remain on the decline, and strong exports of petroleum and refined products are creating new opportunities for America to bring wealth and jobs back to U.S. shores.”
For that trend to continue, though, the United States must pursue energy trading opportunities with the same vigor it pursues trade in other areas. A 1970s-era ban on crude oil exports should be lifted, and LNG export projects should be approved by the government so that domestic producers have every chance to access global markets.
Posted August 10, 2015
API has a new series of online ads that underscore potential risks from EPA’s proposal to impose stricter national ozone standards. The ads focus on potential impacts for individual states including Indiana, Colorado, Missouri, West Virginia and Virginia – which could see more than 38,600 jobs lost.
The key message in the ads is that an unnecessary tightening of ozone standards nationally could have dire effects locally, in each and every state.
Posted August 5, 2015
New government stats on falling carbon dioxide (CO2) emissions from electrical power generation point to a good-news story on energy and climate, one that should grab the attention of policymakers nationally and in the states. This is seen in data from the U.S. Energy Information Administration (EIA).
Plotting CO2 emissions from the electric power sector from 1988 to this April, EIA reports emissions hit their lowest point for any month in 27 years. This is largely because of increased use of natural gas in power generation – a market choice that’s based on the availability and affordability of natural gas, as well as the fact it is clean-burning.
Posted July 30, 2015
We’ve stressed the economic benefits of lifting the ban on U.S. crude oil exports – GDP growth, job creation and consumer savings – because they’re considerable and would affect virtually every American in a positive way. No less important are the benefits for American security and foreign policy from letting U.S. crude trade freely in the global marketplace. API President and CEO Jack Gerard:
“Experts across the academic and political spectrum agree that American exports would spur greater U.S. oil production, put more oil on the world market, and reduce the power that foreign suppliers have over our allies. Our ability to strengthen the global energy market against future disruptions will shape events around the globe, adding a key tool to America’s diplomatic arsenal.”
Posted July 29, 2015
The current crude oil export debate basically is about global competition – and whether the United States will stop sanctioning itself and let an American commodity trade freely on the global market.
An irony – we’ll call it the “Iran Irony” – underscores the anti-competitive nature of our outdated ban on oil exports and the strategic shortsightedness of maintaining it.
The “Iran Irony” is this: While the U.S. advances a nuclear deal that would let Iran reemerge as a major oil supplier on the global market – to Iran’s economic and competitive gain – the United States denies itself similar benefits by banning its own crude exports. This is hurting America’s global competitiveness, diminishing the potential positive impacts of America’s rise as an energy superpower.
Posted July 27, 2015
More tools in the debate over the Renewable Fuel Standard (RFS). Fill Up On Facts.com has posted four short videos highlighting some of the disconnects between the original reasoning behind the RFS and the world we live in today – which is why the program should be fundamentally revamped, if not repealed.
Video No. 1 discusses the potential risks to vehicles from using E15 fuel – seen by some as a way to absorb all of the ethanol mandated by the RFS above what can safely be blended as standard E10 gasoline – the ethanol “blend wall.”
Other videos show that the founding assumptions behind the RFS are disconnected from today’s reality.
Posted July 24, 2015
Some thoughts on EPA’s proposed program to encourage voluntary methane emissions reductions from existing sources. The Methane Challenge Program would expand on the Natural Gas STAR program by recognizing companies that make specific emissions reduction commitments and agree to submit annual data on the progress they’re making.
First, industry supports voluntary. The program could be supportive of what industry already is doing to reduce methane emissions – an effort that is working. EPA’s Greenhouse Gas Inventory Report issued this spring showed methane emissions from hydraulically fractured natural gas wells are down 79 percent since 2005 – a period in which natural gas production has soared.
Posted July 16, 2015
Motorcycles aren’t designed to use higher ethanol-blend fuels like E15, and the American Motorcyclist Association (AMA) warns that using E15 in a motorcycle can void its warranty. There’s serious concern about inadvertent misfueling, as well as the possibility that the push for more E15 in the fuel supply could out E0 (gasoline containing zero ethanol).
Posted July 15, 2015
While the potential negative impacts of E15 fuel on machines that weren’t designed to use it – from vehicles to outboard marine engines and weed-eaters – isn’t funny, some humor can help illustrate important points in that key public policy debate.
API has three new cartoons that take a light-hearted look at the potential harm from using E15 – containing up to 50 percent more ethanol than E10 gasoline that’s standard across the country – in outdoor equipment, boat motors and motorcycles. Today, outdoor power equipment.
Kris Kiser, president and CEO of the Outdoor Power Equipment Institute (OPEI), has warned against using E15 in lawnmowers and other outdoor gear because they can cause permanent damage.