Energy Tomorrow Blog
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.
Posted March 10, 2015
A postscript to our post explaining that the crude oil the Keystone XL pipeline would deliver is comparable to other heavy crudes already being refined in the U.S.: Oil sands crude would replace other heavy oils – most significantly, crude currently imported from Venezuela.
The point is made in the U.S. State Department’s most recent (of five) environmental reviews of Keystone XL:
Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in an outlook where the refiners have significant incentive to obtain heavy crude from the oil sands. Both the EIA’s 2013 AEO (Annual Energy Outlook) and the Hart Heavy Oil Outlook (Hart 2012b) indicate that this demand for heavy crude in the Gulf Coast refineries is likely to persist throughout their outlook periods (2040 and 2035 respectively).
Posted March 3, 2015
ConocoPhillips Chairman and CEO Ryan Lance applies some uncomplicated logic to the question of whether the United States should lift its 1970s-era ban on exporting domestic crude oil. “We should treat crude oil like any other potential product export,” Lance said at an event hosted by the U.S. Chamber of Commerce.
As he did during a January visit to Washington, Lance laid out compelling reasons for lifting the crude oil export ban: An abundance of domestic light crude produced from shale is mismatched for a U.S. refining sector that’s largely configured to process heavier crudes, exporting crude would give producers access to the global market, helping to sustain domestic production and U.S. industry jobs, and exports would add supply to the global market, helping stabilize it and affording the U.S. new opportunities to exert positive influences in the world.
Posted February 10, 2015
EIA Today in Energy: The increase in U.S. shale and tight crude oil production has resulted in a decrease of crude oil imports to the U.S. Gulf Coast area, particularly for light-sweet and light-sour crude oils. These trends are visualized in EIA's crude import tracking tool, which allows for time-series analysis of crude oil imported to the United States.
Historically, Gulf Coast refineries have imported as much as 1.3 million barrels per day (bbl/d) of light-sweet crude oil, more than any other region of the country. Beginning in 2010, improvements to the crude distribution system and sustained increases in production in the region (in the Permian and Eagle Ford basins) have significantly reduced light crude imports. Since September 2012, imports of light-sweet crude oil to the Gulf Coast have regularly been less than 200,000 bbl/d. Similarly, Gulf Coast imports of light crude with higher sulfur content (described as light-sour) have declined and have been less than 200,000 bbl/d since July 2013.
Posted January 15, 2015
Facts and science over politics. That’s the way energy policy should be made. Too many policy matters in the energy space are being hijacked by politics. The Keystone XL pipeline is one example, as are some of the regulatory initiatives the administration is pushing right now. That’s not the way to craft good energy policy.
Keystone XL has been stuck on the drawing board more than six years because it was turned into a political football by the White House. Cross-border pipelines like Keystone XL historically have gained approval in 18 to 24 months. We’re at 76 months and counting for political reasons, not because of compelling scientific and economic analysis – as advanced in the five reviews conducted by the U.S. State Department.
Keystone XL finally has reached the debate stage in the Senate, but the White House is threatening to veto legislation that would advance the project. More politics, more delay, more missed opportunity for American workers and U.S. energy security.
Posted November 24, 2014
For months we’ve been pointing out the brokenness of the Renewable Fuel Standard (RFS), the federal law requiring ever-increasing use of ethanol in the nation’s fuel supply.
We’ve written about the impending “blend wall,” the point where the RFS would require blending more ethanol into gasoline than could be safely used as E10, potentially putting motorists at risk for damage to vehicles while also potentially risking small-engine equipment and marine engines. We’ve written about RFS-mandated use of “phantom” liquid cellulosic biofuels – a fuel that hasn’t been commercially available despite the recent inclusion by EPA of landfill bio gas in that category (more about that in a future post). And we’ve written about how the 2014 requirements for ethanol use were months and months late from EPA, caught up in election-year politics.
The RFS is indeed broken. Late last week EPA basically agreed, announcing it’s waving the white flag on trying to issue ethanol-use requirements for 2014, which has just a little over one month to go. Instead, the agency said it will complete the 2014 targets in 2015 “prior to or in conjunction with action on the 2015 standards rule.”
Posted November 5, 2014
A couple of quick observations on issues related to the flawed Renewable Fuel Standard (RFS).
First, the ethanol use requirements for 2014 now are 11 months late. The requirements from EPA were supposed to be issued by Nov. 30 of last year, so that refiners could plan this year’s operations to comply with the RFS’ ethanol mandates. Instead, they’ve been forced to try to divine what EPA might require. Now, with roughly 330 of the year’s 365 days passed, the guessing game turned absurd long ago.
Posted October 14, 2014
A new study by the Aspen Institute joins a series of analyses concluding that one benefit from exporting U.S. crude oil would be lower gasoline prices here at home. Aspen’s projected reduction of between 3 and 9 cents per gallon parallels findings in previous major studies by ICF International (3.8 cents per gallon), IHS (8 cents) and Brookings/NERA (7 to 12 cents) that exports would lower pump prices.
Aspen and the other studies project other benefits from exporting crude oil, including broad job creation, economic growth and increased domestic energy production. Yet the solidifying consensus that consumers also would benefit is critically important as the public policy debate on oil exports continues.