Energy Tomorrow Blog
Posted July 24, 2015
Our series highlighting the economic and jobs impact of energy in each of the 50 states continues today with Oregon. This week started with Maine and the series began with Virginia on June 29. All information covered in this series can be found online here, arranged on an interactive map of the United States. State-specific information across the country will be populated on this map as the series continues.
As we can see with Oregon, the energy impacts of the states individually combine to form energy’s national economic and jobs picture: 9.8 million jobs supported and $1.2 trillion in value added.
Posted June 22, 2015
Wall Street Journal (Hamm) -- Amid news of a pending nuclear deal with Iran, some OPEC countries have struck agreements with refineries in Asia to avoid losing market share when Iranian oil comes back on the market. If U.S. policy will allow Iran to export oil, shouldn’t it allow America to do the same? Clearly, our allies would rather get their oil from America than Iran if given the choice. But without the ability to export, the U.S. is not even in the game.
Congress must lift the ban on U.S. crude oil exports. The ban is a terrible relic of the Nixon era that harms the American economy. As Sen. Lisa Murkowski (R., Alaska) has pointed out, restrictions on oil trade effectively amount to domestic sanctions. Combined with a mismatch in refining capacity, the ban on oil exports is creating a significant discount for U.S. light oil at no benefit to anyone except refiners and their foreign ownership. It has cost U.S. states, producers and royalty owners $125 billion in lost revenue in four years, according to industry estimates.
Foreign producers are using their heavy oil—and the U.S. ban on exports—as a weapon against America. Over the past three decades countries such as Venezuela, Mexico, Saudi Arabia and Canada have overtaken U.S. refining capacity to run their heavy crude in American refineries and capture a large portion of the U.S. market. Without firing a shot, they have disadvantaged American oil and interests.
Posted June 17, 2015
The Hill – A new Republican bill introduced Tuesday would completely repeal the federal mandate to blend ethanol into the nation’s gasoline supply.
Sen. Bill Cassidy’s (R-La.) legislation would completely do away with the renewable fuel standard, which first took effect in 2005 and now requires increasing levels of ethanol and biodiesel to be put into traditional fossil fuels.
The mandate invites frequent criticism from Republicans, the oil industry and sectors that complain the demand it creates for corn ethanol increases agricultural prices.
“Workers, refiners, producers, farmers and ranchers across the country are affected by the renewable fuel standard,” Cassidy said in a statement. “More mandates mean less jobs. It means families are paying more for gas and groceries.”
Posted June 12, 2015
Wall Street Journal – Low oil prices and economic growth have helped drive up consumer demand for energy across the world in 2015, the International Energy Agency said Thursday, a phenomenon seen from U.S. gasoline stations to Chinese auto dealerships.
The IEA’s closely watched oil-market report lent some support to an idea pushed by the Organization of the Petroleum Exporting Countries and other producers: that collapsing oil prices would spur more consumer demand and eventually send prices back up. The benchmark U.S. oil price hit a six-month high on Wednesday.
The IEA said world demand for oil would increase by 1.4 million barrels a day this year, 300,000 barrels a day faster than it previously forecast, to a daily average of 94 million barrels this year. Global demand in 2014 was about 92.6 million barrels a day, the IEA said.
Posted June 3, 2015
The question posed to Dominion Energy President Diane Leopold was about “Keystonization” – referring to the tactical use of protests, process and procedural delays and legal challenges to block safe energy development and key infrastructure projects.
Leopold knows the terrain well. Despite a small but vocal group of opponents, Dominion Energy recently won federal approval to expand its Cove Point, Md., natural gas terminal to allow the export of liquefied natural gas (LNG).
At an event hosted by America’s Natural Gas Alliance (ANGA) last month, Leopold cautioned that delay of the Keystone XL pipeline for more than six years has generally helped embolden opponents of energy infrastructure (see here, here and here) – making it more important than ever for energy companies to effectively communicate their plans and the benefits of their projects while exceling in community engagement.
Posted June 1, 2015
Pittsburgh Post-Gazette op-ed (Eberhart): ... Since 2000, global LNG demand has grown an estimated 7.6 percent per year. And that rate is expected to increase: Ernst & Young predicts that by 2030 global demand will reach 500 million metric tons, doubling 2012 levels.
At the same time, because of the surge of natural gas from American shale, the United States is awash in the stuff, with domestic natural gas production increasing 41 percent in the past decade alone.
Ten years ago we were an LNG importer. Today we’re the world’s largest natural gas producer.
And with the amount of technically recoverable natural gas in the United States 100 times greater than our current consumption, we have a boon to the economy that is expected to contribute up to 665,000 net jobs and $115 billion to GDP by 2035. We are expected to have enough gas to meet our own needs while also helping to satisfy staggering demand in places like Japan, Korea, India, China and Taiwan.
Clearly, this is an opportunity we don’t want to miss. But a protracted, redundant and expensive approval process could put it just out of reach.
Posted May 29, 2015
Reuters: The U.S. Congress could lift the 40-year old ban on domestic crude oil exports within a year as a drop in gasoline prices and the potential return of Iranian oil to global markets makes it an easier measure for politicians to support, Bank of America Merrill Lynch analysts said on Thursday.
U.S. gasoline prices have dropped since last year along with global crude prices, thanks to strong crude output from the United States, Saudi Arabia and Iraq. On Thursday, the U.S. average for regular gasoline at the pump was nearly $2.74 a gallon, down from $3.65 a year ago, according to the AAA motorist club.
If that remains the case, it has the potential to allay politicians' fears that they could be blamed any rise in gasoline prices if the crude oil export ban was lifted. If talks between six global powers and Tehran on Iran's nuclear program reach a deal on June 30, sanctions on Iran's oil exports could be removed soon after. That could also put pressure on global oil and U.S. gasoline prices.
Posted May 21, 2015
Fort Worth Star-Telegram (Weinstein): Thanks to what’s sometimes called the “shale revolution,” America has re-emerged as an energy superpower.
Even with prices 40 percent lower than a year ago, we remain the world’s No. 1 producer of crude oil and other liquid hydrocarbons. Imports of oil have dropped from 60 percent of consumption to about 35 percent just in the past five years. We’re also the world’s largest producer of natural gas.
Both our oil and natural gas output would be even higher if not for regulatory and infrastructure constraints.
Posted May 19, 2015
Oil and Gas Investor: The technology that fueled the U.S. shale revolution could breathe new life into old oil fields outside of North America.
More than 170 mature oil plays worldwide have the potential from horizontal drilling and hydraulic fracturing to produce as much as 141 billion barrels (Bbbl) of oil, according to an IHS report on May 13.
Of the estimated 141 Bbbl of potentially recoverable oil using unconventional techniques, 135 Bbbl exist in plays that would likely require hydraulic fracture stimulation to produce. Roughly 6 Bbbl sit in plays that may not require hydraulic fracturing.
Posted May 14, 2015
Wall Street Journal: After slashing production for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices.
Last week, EOG Resources Inc. EOG, -0.08% said it would ramp up output if U.S. prices hold at recent levels, while Occidental Petroleum Corp. OXY, +0.93% boosted planned production for the year. Other drillers said they would open the taps if U.S. benchmark West Texas Intermediate CLM5, -0.88% reaches $70 a barrel. WTI settled at $60.50 Wednesday, while global benchmark Brent LCOM5, -0.13% settled at $66.81.
An increase in U.S. production, coupled with rising output by suppliers such as Russia and Brazil, could put a cap on the 40% rally in crude prices since March and even push them lower later in the year, some analysts say.
“U.S. supply could quickly rebound in response to the recent recovery in prices,” said Tom Pugh, a commodities economist at Capital Economics. “Based on the historical relationship with prices, the fall in the number of drilling rigs already looks overdone, and activity is likely to rebound over the next few months.”