Energy Tomorrow Blog
Posted February 28, 2019
Months before the federal offshore well control rule went into effect in July 2016, API told Congress the safety regulation could actually increase risks associated with offshore oil and natural gas development – that its rigid requirements could stifle innovation and thwart the effectiveness of new operational technologies.
The 2016 rule is an example of “prescriptive” regulation, a one-size-fits-all approach that requires certain processes, procedures and tests. It was and is the wrong approach for offshore safety – mainly because every oil and natural gas well has different characteristics: geology, depth, water pressure and temperature and other variables that factor into developing the best safety plan for a particular well.
In that context offshore operators seek government-approved alternative compliance paths – which they’ve done since the rule’s launch in 2016, when the Obama administration was in charge of the Bureau of Safety and Environmental Enforcement (BSEE), the overseer of offshore safety. Indeed, the requests show the rule needs fixing.
Posted February 27, 2019
EPA’s proposal to reform a key component of the Renewable Fuel Standard (RFS) would only worsen the already broken RFS, a new study finds. The analysis by Covington & Burling for API affirms that the administration’s proposal to reform the market for Renewable Identification Numbers (RINs) under the RFS misdiagnoses the problem with the RINs market and provides misguided and counterproductive changes.
Posted February 26, 2019
When the U.S.-Mexico-Canada Agreement (USMCA) was announced last fall, we pointed out that it would be good for North American energy security and continue flourishing energy trade between the United States and its neighbors by providing market access and zero tariffs for U.S. natural gas and oil and related products.
The agreement would sustain and expand the gains made under its predecessor, NAFTA, which created a North American energy market, helped make the U.S. more energy secure and benefited U.S. consumers.
Congress should approve USMCA as soon as possible to lock in the critically important energy relationship between the U.S., Mexico and Canada – as well as the general flows of goods and services so vital to good economic health in this country.
Posted February 26, 2019
In case you missed it, let’s echo a recent official U.S. Energy Department projection that the United States should “not only maintain its lead spot as top oil producer, but will greatly exceed what it produced last year in both 2019 and 2020.”
The trajectory of U.S. oil production is significant for U.S. economic growth, energy security and global leadership, and – as we recently discussed oil exports in this post – potentially raises the stakes in the market share battle between the United States and OPEC plus Russia (OPEC+).
Posted February 22, 2019
A big win this week for U.S. liquid natural gas exports: The Federal Energy Regulatory Commission’s approval of the Calcasieu Pass liquid natural gas (LNG) export facility in Louisiana – marking an end to a two-year logjam on LNG export approvals while boosting American global energy leadership and signaling opportunity to European allies who’ve been beholden to Russia for natural gas.
The $4.5 billion Calcasieu Pass project near Cameron Parish will be able to export 10 million metric tons per annum of LNG per year. Venture Global first applied for FERC approval for the facility in 2015. About a dozen other proposed facilities await FERC approval. Now, perhaps, the end’s in sight.
Posted February 21, 2019
Update: Middleborough, Massachusetts, has joined parts of New York’s Westchester County on a list of places in the Northeast U.S. where they’ve announced moratoriums on new natural gas service.
As is true in Westchester, there’s not enough pipeline infrastructure to deliver natural gas to everyone in Middleborough who wants it. No question, the situation in Middleborough is unfortunate – as it is in sections of Westchester County affected by the natural gas moratorium there.
Blame short-sighted, agenda-driven opposition to constructing new natural gas pipelines or expand existing ones. Natural gas is near enough – in the Marcellus shale play in Pennsylvania that also extends into New York state.
Posted February 20, 2019
Over API’s 100-year history – we complete our first century next month – we’ve created more than 700 standards to enhance the safety, efficiency and sustainability of natural gas and oil operations. The newest of these updates Recommended Practice 54 (RP 54), which sets procedures to advance and maintain a safe and healthy work environment in drilling and well servicing operations.
Specifically, the new edition of RP 54 (first developed in 1981) includes a section on flowback operations, which is important for safe well testing. It also includes revised requirements for process hazard assessment for facilities and sites and introduces formal risk assessments and expanded provisions for offshore operations.
Posted February 20, 2019
Earlier this month we talked about the unforced error of the administration’s tariff and quota policies that hamstring the economy, detailing the findings of recent report from the nonpartisan Congressional Budget Office. Now, new modeling has reviewed those suspicions in the context of the energy trade, and the indications are clear: The escalating trade wars could significantly limit the U.S. energy revolution and the benefits to Americans that it would otherwise bring.
The recent report, part of BP’s annual “Outlook,” a macro-look at the global energy system over the next 30 years, models a number of different scenarios including one in which global trade disputes persist and worsen. The results of this “less globalization” scenario indicate that the continuation of these policies would slow global GDP growth by 6 percent and energy demand growth by 4 percent in 2040. To make matters worse, the effect could be intensified in countries and regions most exposed to foreign trade – like the U.S.
Posted February 19, 2019
A profound shift has taken place in North American oil markets over the past few months that’s now affecting trade between the United States and its biggest crude oil supplier, Canada.
It involves supplies of heavier crude oil – important for the manufacture of a multitude of everyday products consumers use, from local road surfaces to the roofing for their houses. While the U.S. is producing domestic crude at record levels, there’s still a need for heavier crudes.
With heavy oil from Venezuela declining for years, the importance of close ties with Canada and especially the oil-producing province Alberta has increased. Unfortunately, Alberta’s decision to limit oil production appears to be advancing uneconomic outcomes, where some U.S. refiners signaled they’ll shift away from Canadian heavy crude oil and seek supply elsewhere.
Posted February 14, 2019
A lot has been done since we first announced plans to move API’s headquarters in Washington, D.C., and thanks to the work of highly skilled craft tradesmen and women those plans have officially become a reality. In step with the innovation and advanced technologies that have led the U.S. natural gas and oil industry to meet record world energy demand while driving record CO2 emissions reductions, the industry’s leading national trade association has a new, self-sustaining LEED Platinum-certified building to call home.