Energy Tomorrow Blog
Posted August 3, 2020
As we head into the heart of what is forecast to be an above-normal hurricane season, the natural gas and oil industry stands prepared to protect energy workers, neighboring communities, and the energy production facilities and infrastructure that are vital to keeping Americans well supplied.
Industry preparations help minimize the risk of extreme weather to critical energy infrastructure, including refineries and pipelines, and allow for rapid response to hurricane impacts – specifically, to help limit supply disruptions and aid the recovery. Of course, major weather events test preparations, but we are focused on being as prepared as possible for this season.
Posted July 31, 2020
Former Vice President Joe Biden's camp says he wouldn’t completely ban hydraulic fracturing (see the New York Times and here) – the technology most responsible for a domestic energy revolution that has made the U.S. the world’s leading producer of natural gas and oil. While Biden’s proposal to end new federal fracking leases is misguided, the fact he wouldn’t try to ban it elsewhere may suggest a recognition that fracking is critically important to the U.S. economy and national security.
This could indicate some important common ground, which API President and CEO Mike Sommers addressed in the Times article.This is especially welcome news for the nation’s electricity grid operators. They’re on the front lines of the twin effort to provide affordable energy to American homes and businesses, while lowering carbon dioxide emissions from power generation. For them, clean and reliable natural gas is the cornerstone for succeeding on both fronts, which is why natural gas is the nation’s No. 1 fuel for power generation.
Posted July 30, 2020
There’s a basic principle in play in recent news developments in Massachusetts and Ohio – that public energy policy should serve people, not the other way around. In both states, access to clean natural gas, for affordable, reliable energy, means benefits for consumers.
Start in Massachusetts, where the state attorney general struck down the town of Brookline’s bylaw that would have barred new residences from installing natural gas infrastructure for space heating and hot water – mimicking similar restrictions imposed by Berkeley, California. That doesn’t necessarily mean Massachusetts AG Maura Healey has an affinity for natural gas; her decision was based on the primacy of state law and regulations.
No matter, consumers win. And in the process this point is elevated: Public bodies should ensure that dependable, affordable energy is available to consumers – instead of erecting artificial, market-distorting barriers to service.
Posted July 29, 2020
A metric that bears watching as we gauge energy markets, trade, manufacturing and supply chains – all of which contribute to global economic growth and prosperity – is FDI, foreign direct investment, especially for energy projects in the U.S. and other nations.
Recent data indicate that FDI has dropped by half since its peak in 2015, and experts believe that various factors, including the pandemic and escalated trade tensions, could continue or accelerate this decrease. This is potentially significant for the construction of new infrastructure, plants, processing facilities and other projects that have a direct bearing on better serving U.S. consumers and harnessing American energy.
Indeed, recent FDI trends signal a potential turning point.
John D. Siciliano
Posted July 24, 2020
Key Appalachian swing states continue to competitively produce the majority of America’s natural gas supply, despite a global pandemic that continues to pose major challenges for the industry.
Natural gas production in Ohio, Pennsylvania and West Virginia has skyrocketed in the last decade, making the Appalachian region the No. 3 natural gas producer globally behind Russia and the remainder of the United States. This has transformed the region into an energy powerhouse, one that continues to show room for growth.
Posted July 22, 2020
With the U.S. House scheduled to vote on legislation that would create permanent, dedicated funding for the Land and Water Conservation Fund (LWCF), amazing photos from parks and recreation areas around the U.S. make the case for supporting the country’s most important federal conservation initiative. The beautiful images show just a small fraction of the preservation, history and other outdoor opportunities across the U.S. that benefit from LWCF.
Since 1965 the fund has supplied billions of dollars for parks, conservation and recreation across all 50 states. Virtually all of that money was supplied by safe, responsible offshore oil and natural gas development. As we noted last month, when the legislation was moving through the U.S. Senate, the Wilderness Society says LWCF has been “America’s most important conservation funding tool for nearly 50 years.”
Posted July 21, 2020
Through the recent COVID-19 pandemic and resulting shocks to energy markets around the world, U.S. natural gas has remained a relatively bright spot.
Record low prices have benefitted consumers, and at the same time many producers dedicated to natural gas in Pennsylvania, Ohio, West Virginia, Louisiana and East Texas have remained viable as cutbacks in oil and associated natural gas from other regions have taken effect. And now about 90% of U.S. drilling for natural gas is concentrated in these regions, that is Appalachia and the Haynesville areas.
The drilling activity has reflected two fundamental observations. The first is that, according to BTU Analytics, the recent breakeven price – that is, the Henry Hub wholesale market price needed to at least break even in drilling a new well – on average has remained near market prices despite COVID-19, a relatively warm winter and broad financial market concerns. The second observation is that natural gas well productivity, as reported by the U.S. Energy Information Administration, were resilient after some unexplained variation at the beginning of the year.
Posted July 17, 2020
Some lawmakers have proposed putting hundreds of thousands of Americans to work in clean energy jobs while moving the U.S. away from natural gas and oil and, presumably, from the jobs our industry supports.
Somebody should check to see if that’s what working men and women want.
A new study released this week by North America’s Building Trades Unions (NABTU) shows that workers appreciate jobs in natural gas and oil over “green-collar” jobs – because they pay better, last longer and provide greater opportunities.
Posted July 16, 2020
Although we have a long way to go for U.S. petroleum markets to recover to pre-pandemic levels, the comeback broadly continued in June as state economies re-opened despite ongoing challenges with COVID-19. This is seen in API’s Monthly Statistical Report (MSR) for July.
With the daily news flow about COVID-19 – from America Shuts Down Again to More Than Half of States Trending Poorly – it has been challenging for oil markets to discern what’s actually happening. The MSR provides the most timely and comprehensive snapshot of U.S. markets for crude oil and major refined products, based on weekly surveys of up to 90% of the industry.
Posted July 16, 2020
Improvements to the National Environmental Policy Act (NEPA) – the first modernization proposed in nearly half a century – should help clear red tape that can bog down critical infrastructure projects for years and in the process block job creation and affect environmental protection.
The administration’s priority on updating NEPA to streamline infrastructure projects was clear in that President Trump made the announcement. The Council on Environmental Quality estimates that due to NEPA red tape, the average review takes nearly six years, and the average cost to complete a review is $4.2 million.
Modernization of NEPA is long overdue. NEPA review is a chief reason that building infrastructure has become so challenging in this country. A long menu of infrastructure projects has been impacted by protracted NEPA review, not just natural gas and oil projects (see previous posts here and here). These include airports, traffic improvements, wind farms and more.