Energy Tomorrow Blog
Posted August 31, 2015
More about last week’s Commerce Department decision to allow U.S. crude oil swaps with Mexico – basically, a positive step in the direction of lifting America’s 1970s-era ban on exporting domestic crude.
An analysis by the U.S. Energy Information Administration (EIA) says the exchange of light U.S. oil for heavier Mexican oil will generate economic and environmental benefits. The economic piece certainly is consistent with a number of studies that say lifting the ban and exporting domestic crude will generate broad benefits for our economy and savings at the pump for U.S. consumers, while spurring domestic production.
Posted June 26, 2015
API Downstream Group Director Bob Greco traveled this week to EPA’s field hearing on the Renewable Fuel Standard (RFS) in Kansas City, to detail concerns over the flawed program, with its market-distorting mandates for ever-increasing use of ethanol in the national fuel supply. His remarks, as prepared for delivery:
The Ethanol Blend Wall
Our members’ primary RFS concern is the ethanol blend wall. Serious vehicle and retail infrastructure compatibility issues exist with gasoline containing more than 10 percent ethanol. We are encouraged that EPA has proposed to address this reality.
Gasoline demand increases projected in 2007 did not materialize, and Congress granted EPA the authority to balance its aspirational goals with reality. API supports EPA’s use of its explicit RFS waiver authorities in 2014, ‘15, ‘16, and beyond to avoid negative impacts on America’s fuel supply and to prevent harm to American consumers.
Posted June 9, 2015
With another hurricane season upon us, it’s timely to briefly review the ways the oil and natural gas industry is prepared for conditions that could impact industry operations, particularly in the Gulf Coast region and Gulf of Mexico – home to more than 45 percent of U.S. refining capacity and about 17 percent of the nation’s oil and 5 percent of its natural gas production.
While the National Oceanic and Atmospheric Administration (NOAA) is predicting below-normal activity in the Atlantic region (which includes the Gulf), industry still takes a number precautions and has response plans in place in the event of a serious storm – wise, considering the potential impacts to facilities, regional and national economies and the environment.
You can read about this in detail in this hurricane fact sheet.
Posted June 5, 2015
OK, so EPA says safe hydraulic fracturing isn’t a threat to the nation’s drinking water. That’s great news for America’s energy revolution, which is being driven by advanced fracking and horizontal drilling. Without them there’s no revolution and certainly fewer jobs and less economic opportunity. Thanks, EPA, for following the science and recognizing – as industry has for some time, producing specific best practices for fracking – that the focus should be on continually improving safe operations and advancing technologies. These will help ensure our energy revolution goes forward.
Now, let’s talk about another country’s energy revolution – one that hasn’t gotten a lot of attention in the U.S. beyond the unfortunate, protracted debate over the Keystone XL pipeline. Canada’s own energy revolution is at the heart of the U.S.-Canadian relationship and is so integral to U.S. security. The vitality of Canadian energy is something more Americans should care about, as it bears directly and indirectly on our lives in a number of ways.
Posted May 27, 2015
Wall Street Journal commentary (Engler and McGarvey): America’s business and labor leaders agree: President Obama and Congress can do more to modernize the permitting process for infrastructure projects—airports, factories, power plants and pipelines—which at the moment is burdensome, slow and inconsistent.
Gaining approval to build a new bridge or factory typically involves review by multiple federal agencies—such as the Environmental Protection Agency, the U.S. Forest Service, the Interior Department, the U.S. Army Corps of Engineers and the Bureau of Land Management—with overlapping jurisdictions and no real deadlines. Often, no single federal entity is responsible for managing the process. Even after a project is granted permits, lawsuits can hold things up for years—or, worse, halt a half-completed construction project.
Posted May 18, 2015
Wall Street Journal: BRUSSELS—The European Union is increasing pressure on Washington to include an energy chapter in a planned trans-Atlantic trade deal that would allow U.S. exports of natural gas and oil and reduce the bloc’s dependency on Russia.
In an interview with The Wall Street Journal, Maros Sefcovic, the EU’s energy chief, said that easing flows of liquefied natural gas and crude oil from the U.S. to the EU is one of the bloc’s goals for the trans-Atlantic trade and investment partnership, or TTIP, that is currently under negotiation. The U.S. has so far resisted an energy chapter in TTIP, but the shale-gas boom in the U.S. and the EU’s trouble with Russia have pushed the issue into focus.
“We believe that the energy chapter in TTIP…could make a quite important contribution to the mutually beneficial trade exchange, but also to the energy security of the EU,” Mr. Sefcovic said.
Posted April 27, 2015
ConocoPhillips Chairman and CEO Ryan Lance talks with Energy Tomorrow about key industry challenges ahead and details the case for ending the United States’ 1970s-era ban on the export of domestic crude oil. Lance is a petroleum engineer with 28 years of oil and natural gas industry experience in senior management and technical positions with ConocoPhillips, predecessor Phillips Petroleum and various divisions of ARCO. His past executive assignments with ConocoPhillips have included responsibility for international exploration and production, regional responsibility at various times for Asia, Africa, the Middle East and North America, and responsibility for technology, major projects, downstream strategy, integration and specialty functions. He is a member of the Society of Petroleum Engineers, and earned a Bachelor of Science degree in petroleum engineering from Montana Tech in 1984.
Q: Given the current downturn in oil prices, talk about the key decisions ahead for the industry over the next 10 years.
Lance: We foresee several key decisions ahead for companies in our industry. First they have to determine their strategic direction. Industry has transitioned from an era of limited resource access to one that, due to the productivity of North American shale and the potential for shale development elsewhere, offers a new abundance of resources. Although many of the best conventional resource areas remain off limits in traditional exporting countries, shale and other unconventional resources offer immense potential in many areas that are accessible. So companies now have an unprecedented range of options – pursuing North American shale, international shale, deepwater development, LNG, oil sands, international exploration, and so on. Companies must determine where they have or can build competitive advantages and leverage relationships with host nations, potential partners and suppliers, and identify the long-term opportunities best for them.
Posted April 22, 2015
Today, the United States leads in petroleum products, refining and natural gas production, and we’re on track to lead in the production of crude oil; facts reinforced by last week’s EIA Annual Energy Outlook.
The report confirmed that our nation is more energy secure than ever before. And it said in part that domestic production of natural gas is projected to grow through 2040 eventually reaching 35.45 tcf; and domestic oil production is projected to exceed 10 mbd in a few years and remain at that level through 2030. Keeping pace with our nation’s increased development of our energy resources are the 139 operating refineries that produce more fuel than ever before and support roughly 540,000 good paying jobs and 1.9 percent of our nation’s economy.
Posted April 21, 2015
The theme of this year’s CERAWeek mega-conference in Houston is “Turning Point: Energy’s New World.” It is a new world, with the United States producing more energy from oil and natural gas – the lead fuels of the U.S. and the world’s economies – than any other country. Just a decade ago few could have imagined the possibilities.
Posted March 27, 2015
Add the heft of Rice University’s respected Center for Energy Studies to the weight of scholarly analysis urging an end to America’s four-decades-old ban on domestic crude oil exports. In a new study, the center lays out a case for U.S. crude oil exports that builds on the findings of IHS, ICF, Brookings, the Aspen Institute/MAPI and others – saying that lifting the ban would result in significant economic and foreign policy benefits to the U.S.
The study explains that the export ban already is presenting a “binding constraint” on the domestic market, leading to “discounted” pricing for lighter crudes produced by America’s energy revolution. It also notes that large volumes of lighter domestic crudes, in excess of what the U.S. refining sector can use, with no access to other markets, are discounted compared to global crude prices.