RBN Energy

Tuesday, 8/16/2022

There’s a growing acknowledgment in the U.S., Europe and elsewhere that crude oil will remain an important part of our energy future for decades to come. At the same time, however, the drive to decarbonize will continue, and as part of that effort, oil producers will be working to ratchet down their greenhouse gas (GHG) emissions. A lot of that will be achieved through the purchase of carbon offsets or the use of carbon capture and sequestration (CCS), but another approach is for producers to “high-grade” their portfolios by divesting production assets that generate inordinately high volumes of carbon dioxide (CO2) and methane during production and investing instead in assets with much lower carbon intensity. In today’s RBN blog, we discuss the push by some producers to shift to “lower-carbon oil.”

Recently Published Reports

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Chart Toppers Chart Toppers - August 17, 2022 11 min 8 sec ago
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LNG Voyager LNG Voyager Weekly - August 16, 2022 21 hours 14 min ago
NATGAS Billboard NATGAS Billboard - August 16, 2022 21 hours 22 min ago
Crude Oil Permian Crude Oil Permian - August 16, 2022 23 hours 20 min ago

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Daily energy Posts

Monday, 08/15/2022
Category:
Crude Oil

Buoyed by still-elevated crude oil, natural gas and NGL prices — and discipline on capital spending and production growth — U.S. E&Ps have been generating unprecedented cash flow and using much of that bounty to reduce debt, increase dividends and buy back shares. A number of producers have also been investing some of that cash to expand their holdings, mostly to complement their existing acreage in the Permian and other plays and thereby allow for increased efficiency and, in many cases, longer laterals. Few have been doing more in this regard lately than Devon Energy, the Oklahoma City-based E&P, which completed a big bolt-on acquisition in the Bakken in late July and just followed that up with a plan for an even bigger buy in the Eagle Ford. In today’s RBN blog, we look at the company’s strategy.

Sunday, 08/14/2022
Category:
Refined Fuels

The cost of gasoline has garnered a lot of headlines since the start of 2022, with the blame for elevated prices falling on seemingly everything and everyone, from the Biden administration’s policies on oil exploration to Russia’s invasion of Ukraine, as well as decisions by major U.S. producers and OPEC not to swiftly boost oil production. Another can't-be-ignored culprit is the loss of significant U.S. refining capacity over the last few years, which has limited the ability of refiners to respond to the strong, post-COVID demand recovery by ramping up production. By and large, the refineries still operating have been running flat out. In today’s RBN blog, we look at the state of global refining, where new capacity is likely to be built, and the headwinds to future investment.

Thursday, 08/11/2022
Category:
Energy

The energy industry — everything from oil and gas production and transportation to oil refining, gas processing and NGL fractionation — has a myriad of variables influenced by dozens of factors. It’s a value chain so vast you’d think it would be impossible to explain in simple terms. But behind it all is a well-oiled machine for developing the resources that literally fuel our modern economy. And, by understanding what happens at each link in the value chain, you can ultimately gain a clearer picture of what’s happening in energy markets. In today’s RBN blog, we kick off a series aimed at examining and explaining the oil and gas value chain, starting with the upstream world of exploration and production — what happens in production areas, the types of companies that operate in that segment, and the critical role of oil and gas reserves.

Wednesday, 08/10/2022
Category:
Crude Oil

Like an aging pop star, price benchmarks have to re-invent themselves from time to time to maintain their status. The Dated Brent marker –– as much a survivor as Cher, still going strong at 76 –– has had successes and setbacks in the past and will undergo yet another transformation by June 2023, courtesy of price reporting agency Platts. You definitely need to pay attention to this change, because Dated Brent is used as a pricing reference not only for several crude oil streams sold around the world, but also for other commodities such as LNG, fuel oil and other refined products and petrochemicals — oh, and financial derivatives too. Also, the latest version of the price marker will include an adjusted price for the U.S.’s prolific West Texas Intermediate (WTI). In today’s RBN blog, we discuss the details and implications of Dated Brent’s latest makeover for traders, refiners and other market participants.

Tuesday, 08/09/2022
Category:
Natural Gas

The build-out of natural gas processing plants in the Permian continues unabated. In just the past few days, four of the largest midstream players in the U.S.’s premier hydrocarbon production area have unveiled plans for a combined 1.3 Bcf/d of new processing capacity, most of it in the gassier Delaware Basin portion of the crude-oil-focused play. And that’s on top of the 11.7 Bcf/d of processing that’s already been added in the Permian over the past four-and-a-half years — and the 2.6 Bcf/d of soon-to-be-finished projects announced previously. That’s quite a run, and still more processing plants may be in the cards — if midstreamers build more takeaway-pipeline capacity. In today’s RBN blog, we discuss recent processing-plant and pipeline developments in West Texas and southeastern New Mexico.

Monday, 08/08/2022
Category:
Crude Oil

U.S. gasoline and diesel prices have been sliding the past couple of months, but there's still a lot of angst among politicians and the general public about the cost of motor fuels — and who's to say prices at the pump won't soar again, spurring another round of proposed "fixes" to the markets for crude oil and refined products. Among the proposals floated when prices spiked this spring were bans on the export of U.S.-sourced crude, gasoline and diesel, the idea being that suspending exports would increase the supply available to domestic markets and thus bring down prices. If only it were all so simple! In today's RBN blog, we discuss the complicated ins and outs of oil, gasoline and diesel imports and exports, and the many effects of putting the kibosh on shipments to international markets.

Sunday, 08/07/2022
Category:
Crude Oil

The Gulf of Mexico (GOM) has seen more than its share of stormy weather, and — both literally and figuratively — so have crude oil producers active there. Earlier this century, production growth in the offshore GOM was set back by Katrina and other major hurricanes, then by the Deepwater Horizon spill. Starting in 2014, and for five years after that, the Gulf's output ratcheted up, only to be set back again, this time by the double-whammy of COVID and bad storms. Now, the GOM appears to be poised for another period of steady growth — the only question is, with the global push to decarbonize, and with at least of couple of large producers planning to exit the region, will this be Gulf producers' last stretch of good weather? In today's RBN blog, we begin a short series on the ups and downs of GOM production, the new projects starting up this year and beyond, and the Gulf's longer-term prospects.

Thursday, 08/04/2022
Category:
Renewables

As a piece of legislation makes its way through Congress, the name it’s given can say a lot about its overall importance and what it intends to accomplish, but also a little bit about the current political environment. Surging inflation has been one of the biggest stories of the past year and politicians of all stripes have been looking for ways to ease the pressure on consumers. Those concerns were a big reason why the Biden administration’s Build Back Better Act (BBBA), which included several climate- and energy-related measures, ultimately died in Congress late last year. The Inflation Reduction Act of 2022, which Democrats in Washington hope to pass soon, embraces the fight against inflation and includes other significant provisions, but clean energy is at the heart of the bill. In today’s RBN blog, we look at the legislation's climate and clean-energy initiatives — including a methane-reduction program, more tax credits for electric vehicles, and incentives for renewable energy and clean hydrogen — and how they would help reduce greenhouse gas (GHG) emissions.

Wednesday, 08/03/2022
Category:
Renewables

It’s one thing if you’re 25 or 30 years old and your 401(k) is just getting started — you’ve got time to build it up, so don’t sweat it — but it’s quite another if you’re 60 or 65 and you’ve still got to sock away a lot of money before calling it quits. It could be argued that the environmental community is facing a quandary very similar to that of an aging boomer short on retirement savings. The fact is that the International Energy Agency’s (IEA’s) target of achieving net-zero man-made carbon emissions globally by 2050 in order to blunt the human impact on climate change will require massive new investment and a complete and well-coordinated transformation of the world’s energy complex. In the near-term, progress along that path must include an extraordinarily rapid ramp-up in the use of carbon capture and sequestration (CCS). And like an aging worker whose late discipline may be thwarted by an unforeseen health challenge, as we’ve seen with the recent energy crisis, there’s a lot that could derail progress toward those goals. Is the IEA's goal achievable? Maybe. But, as we discuss in today’s RBN blog, it won’t be easy.

Tuesday, 08/02/2022
Category:
Crude Oil

U.S. exports of crude oil, LNG, NGLs and refined products have moved into the spotlight on the world stage. Within the past few years, global markets have come to rely on U.S.-sourced hydrocarbons to meet critical needs for energy supplies. But export volume growth has slowed. Demand in the U.S. is ramping up, leaving less available for shipment overseas. And some members of Congress are encouraging the Biden administration to curtail or even ban some exports. What’s next for U.S. hydrocarbon sales to international markets? Will U.S. exports be there to challenge Russia’s use of oil and gas as political weapons? Or could market, logistical and political forces disrupt the flows that are meeting energy needs of the world? Today, we preview the deep dive into these issues on the agenda at RBN’s upcoming xPortCon conference.

Monday, 08/01/2022
Category:
Natural Gas

Just downstream from the Appalachian supply basin — where daily spot natural gas prices are among the lowest in the country — cash and forward prices in the Mid-Atlantic and Southeast have rocketed, becoming the highest gas prices in the land, and in some cases are at never-before-seen levels for this time of year. No doubt it’s been a sweltering summer so far, and low storage levels aren’t helping either. But there’s more to the price premiums than that. Limited access to supply and constraints on Williams’ Transco Pipeline — the primary system delivering gas to the region — have created a demand “island” there just as persistent heatwaves boosted cooling demand. Moreover, without additional pipeline capacity, the dynamics unfolding this summer could become a regular feature of the Southeast/Mid-Atlantic markets. In today’s RBN blog, we break down the factors driving regional prices to new heights.

Sunday, 07/31/2022
Category:
Natural Gas Liquids

The official start of propane heating season is only two months away, and inventories are skinny, pretty close to the five-year minimum. Should that be a concern? After all, stocks were at the low end of the range last year, and it was a relatively benign market, with few supply chain disruptions. But there’s a potential gotcha in that statement. Because last year the first three months of winter were quite mild in propane country. What would happen if the market were hit with weather events like what we saw during the “polar vortex” of 2013-14, a winter etched into the minds of all propaners who lived through it? Obviously, the outcome would be quite different.  In today’s RBN blog, we continue our series on the upcoming propane heating season with a look at the challenges that unusually cold weather could bring.

Thursday, 07/28/2022
Category:
Refined Fuels

Refiners and the U.S. Environmental Protection Agency (EPA) have locked horns in a dispute over Renewable Identification Numbers (RINs). Now in its 10th year, the dispute stems from contradictory premises about how RINs affect the profits of the refiners and blenders who produce the ground transportation fuels sold in the U.S. To form an opinion of what ought to happen next, you need to understand the fundamentals of how RINs work in light of the RIN being a tax and a subsidy that forces renewables into fuels. In today’s RBN blog, we focus on how RINs force renewables into fuels and address the related question: Do RINs increase the price consumers pay for gasoline?

Wednesday, 07/27/2022
Category:
Renewables

Over the past few years, the simultaneous drives for action on climate change, diversity in the workplace, and corporate accountability have coalesced into the environmental, social, and governance (ESG) movement. The energy industry has been at the center of all this, of course, because significant volumes of greenhouse gases (GHGs) are generated with the production, processing, transportation and –– especially –– consumption of hydrocarbons. But while many energy companies have developed ESG strategies and goals, the ESG movement has also come under increasing scrutiny and criticism –– and from all sides, it seems. So where does the movement stand today, and what are its prospects in a world that is now as focused on energy security and affordability as it is on quickly reining in GHG emissions? In today’s RBN blog, we discuss highlights from our new Drill Down Report on the issues surrounding ESG.

Tuesday, 07/26/2022
Category:
Renewables

It took many decades to build out the U.S.’s natural gas production, processing and transportation infrastructure, and just as long to develop demand for natgas — the many millions of residential, commercial, industrial and power-generation customers that now depend on U.S. gas, both domestically and, more recently, internationally as well. Now, with action on both climate change and energy security top of mind, there’s a big push to add clean hydrogen to the energy mix as quickly as possible, as evidenced by the Department of Energy’s plan to invest up to $8 billion in the development of four or more “hydrogen hubs.” This time, we won’t have decades to build out the clean hydrogen supply, demand and infrastructure that will be needed to make a real difference — and that’s precisely the point being made by the folks in and around Houston, who assert that the region has just what it takes to get a consequential hydrogen hub up and running. In today’s RBN blog, we continue our look at the federal government’s push to advance clean hydrogen and the Houston-led effort to make the western Gulf Coast a center of hydrogen-related activity.