Energy Tomorrow Blog
Posted April 28, 2015
EIA: In its recently released Annual Energy Outlook 2015 (AEO2015), EIA expects the United States to be a net natural gas exporter by 2017. After 2017, natural gas trade is driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of U.S. natural gas and world prices that encourages exports of liquefied natural gas (LNG), and, to a lesser extent, greater exports by pipeline to Mexico.
The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed U.S. oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. Net LNG exports make up most of the natural gas exports in most cases. By 2040, LNG exports range from 0.2 trillion cubic feet (Tcf) in the Low Oil Price case to 10.3 Tcf in the High Oil and Gas Resource case. For comparison, 2040 natural gas net exports by pipeline range from 1.1 Tcf in the High Oil Price case to 2.9 Tcf in the High Oil and Gas Resource case.
Posted April 17, 2015
BloombergBusiness: The U.S. pumped crude last month at the fastest pace since February 1973, sending March inventories to the highest level in 85 years.
Crude output climbed 13 percent from a year earlier to 9.32 million barrels a day in March, the American Petroleum Institute said in a monthly report Thursday. Production of natural gas liquids, a byproduct of gas drilling, climbed 9.1 percent to 3.05 million, a record for March. The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S.
“Production of both crude oil and natural gas liquids last month remained at the highest levels in decades even as rig counts reached a five-year low,” John Felmy, chief economist at the API in Washington, said in an e-mailed statement.
Posted April 8, 2015
NOLA.com: Five years after the BP oil spill in the Gulf of Mexico, the oil and gas industry can respond and contain well blowouts offshore faster than ever before, said Don Armijo, CEO of the Marine Well Containment Co. But he said work remains to make sure containment equipment keeps pace with industry's push to drill in deeper waters.
Armijo, who spoke Tuesday (April 7) at a business lunch at The Roosevelt Hotel in downtown New Orleans, said Marine Well Containment Co. has the equipment to respond to oil gushers in up to 10,000 feet of water. The industry will outgrow that equipment, he said.
"We know there has been drilling proposed in areas much deeper than 10,000 feet of water," Armijo said. "That's the big thing. How do we actually get the technology put together so we can be deeper? These are the kind of things that are on our minds all the time."
Posted March 20, 2015
Bloomberg: Two former Obama administration officials said a four-decade-old ban on oil exports limits U.S. geopolitical influence and makes it harder to get other nations to embrace free trade.
The issue of the ban “arose constantly” in negotiations with other countries, including when the U.S. sought support for sanctions on Iran’s oil production to halt its nuclear ambitions, said Carlos Pascual, a former top energy envoy at the U.S. State Department.
“It’s those kinds of restrictions that in the end affect American credibility, and in the moment when we have to put through an important policy, makes it much more difficult to negotiate,” Pascual said at a Senate Energy and Natural Resources Committee hearing Thursday called to build support for ending the ban in place since the 1970s Arab oil embargo.
Posted March 12, 2015
Oil and natural gas industry groups joined by environmentalists and anti-hunger groups have joined forces to outline concerns with the Renewable Fuel Standard (RFS) and to ask Congress to repeal or significantly reform the program with its ethanol mandates.
Posted March 11, 2015
To the chorus of voices sounding the alarm on the broken Renewable Fuel Standard (RFS) – AAA, automakers, outdoor power equipment manufacturers, marine manufacturers, turkey and chicken producers, restaurant companies, grocery manufacturers, environmental non-profits and anti-hunger groups – add another: the advanced biofuels industry.
Given the fact the RFS was designed to encourage development of advanced and cellulosic biofuels, the Advanced Biofuels Association’s call for significant RFS reform is a game-changer in the ongoing public policy debate. ABFA President Michael McAdams at this week’s Advanced Bioeconomy Leadership Conference:
“… the Renewable Fuels Standard (RFS) – the very tool that was created to foster our industry – has become one of the greatest obstacles to continued development of the advanced and cellulosic biofuel industry due to inconsistent and poor implementation.”
The issue is the way the RFS, through annual ethanol mandates, has resulted in ever-increasing production of ethanol made from corn – versus ethanol and other biofuels made from non-food feedstocks.
Posted March 11, 2015
Posted March 10, 2015
Posted March 7, 2015
The politics of the Renewable Fuel Standard (RFS) and its mandates for ever-increasing ethanol use are on display this weekend in Iowa, a key presidential primary state. Nothing against Iowa – or ethanol, for that matter – but the RFS illustrates that when you mix energy policy and politics bad public policy can result.
Certainly, the RFS shows the difficulty of trying to apply central planning to the marketplace, of trying to mandate consumer behavior. The RFS is a relic of the era of energy scarcity in the U.S. whose best intentions have been superseded by surging domestic oil and natural gas production.
Still, the RFS remains and along with it potential risks to the economy, vehicle engines and more. It also risks unintended consequences, including a moral/ethical dilemma over whether food should be turned into fuels, as well as concern for the environmental impact of corn ethanol production.
Posted March 6, 2015