Consistent lower natural gas prices resulting from the boom in shale production are expected to fuel a major increase in industrial demand over the coming years. RBN expects that sector’s demand to increase by 5 Bcf/d from 19 Bcf/d in 2013 to 24 Bcf/d in 2025. There have been numerous announcements of new plant builds and expanded capacity projects in primary industries. Less well documented are the wider ramifications of abundant shale natural gas and natural gas liquids (NGL) supplies for US manufacturing industry as a whole. Today in the first of a two part series Taylor Robinson from PLG Consulting outlines the changes underpinning a new industrial renaissance.
Daily Energy Blog
Wednesday, 2/19/2014
There is a common theme of surplus in US energy markets today with more natural gas, natural gas liquids (NGLs) and light sweet crude oil being produced than can be processed and consumed domestically. The likely destination of those surpluses is export markets – either directly or in the form of derivative products. How should we think about these exports in the context of “energy independence”? U.S. energy policy since the 1970s has been centered on the importance to national security of reducing dependence on foreign resources—the oft-touted, elusive goal of “energy independence.” Today we examine whether a btu energy balance is a practical and effective measure of energy independence.
Monday, 2/17/2014
Natural gas production in the Lower 48 has surged 40 percent since 2005 – hitting record levels in recent months in spite of low prices and a drilling migration away from dry gas to liquids plays. Following a similar trajectory, natural gas liquids (NGLs) output from gas processing plants jumped 40 percent since 2009 as drilling for wet (high BTU) gas accelerated. Crude oil production from shale did not take off until the end of 2011 but since then has surged an astronomical 56 percent to 7.8 MMb/d. While this winter’s harsh weather has placed a temporary slow down on these skyrocketing production numbers, RBN fully expects the growth trend to continue - putting the U.S. within sight of energy independence in the not too distant future. Along the way plenty of new opportunities for the industry will be tempered by market challenges. Today we preview RBN’s latest Drill Down Report.
Thursday, 2/13/2014
One goal of the RBN blogosphere is to provide clarity to a highly intricate, interwoven energy complex. Today we are going to tackle an aspect of energy markets that has vexed us for some time. We’re going to explore some of the big numbers that are used to measure energy markets, what they mean to the oil patch (Cowtown, a.k.a., Fort Worth here in Texas is a good example of that) and to each of us as energy users. So put on your thinking cap and tell your colleagues to leave you alone for five minutes. We’re going to expand our minds.
Tuesday, 2/04/2014
The “polar vortex” of 2014 dipped far south enough to impact power markets in Texas. On Monday January 6th, the Electric Reliability Council of Texas (ERCOT) came dangerously close to initiating rolling blackouts as power demand increased due to record low temperatures and unexpected generation unit outages. Real time electricity prices spiked to over $5,000/ Megawatt Hour (MWH). The close call served as a sobering reminder for Texas regulators of the ongoing debate over how the State will meet future power generation requirements. Today we detail the “polar vortex” event and explain the implications for Texas power.
Thursday, 1/30/2014
Many who write about hydraulic fracturing suggest, or state explicitly, that it is a new technology in the oil and gas industry. This can hardly be further from the truth. Indeed, it is probably the case that hydraulic fracturing is older than most of the people writing about it. Today we begin a series on hydraulic fracturing and why it has had such a significant impact on gas and oil production over the past few years.
Wednesday, 1/29/2014
Natural gas and oil development, especially in shale plays that require a lot of wells and a lot of activity, can be inconvenient and noisy. There are also, of course, various criticisms and protests around some of the processes used, such as hydraulic fracturing, and around the overall level of activity, such as truck traffic. The gas and oil producing industry values strong relationships with the communities where it needs to work, and can use all the friends it can get as it takes the lead in developing the nation’s vast energy resource. Bringing big economic benefits to those communities, which are often rural or industrial areas hard-hit by economic downturns, is clearly really important in the efforts to build those relationships and friendships. There are a lot of different kinds of economic benefits deriving from supply development, but by far the most important to the affected landowners are the royalties resulting from private mineral rights. Today we continue our examination of the inner workings of oil and mineral rights issues, this time considering some common oil and gas royalty disputes.
Tuesday, 1/07/2014
RBN Energy is branching out! Today we are launching our new premium services package called Backstage Pass. Just like it sounds, this new service gets you deep into the details of the data and models we put together at RBN, providing what we believe is a whole new level of information access, insights and connections across energy markets. Don’t panic. The blog is still free. But if you are like the many RBN members that have asked for a much broader range of services, then you will be happy to learn that the answer is now ‘yes’. We are rolling out the service with what we believe is the definitive study assessing the crude-by-rail phenomenon. Learn everything you need to know about our new premium services in today’s blog. But be warned, this is an unabashed commercial plug for our new service. We hope you find it intriguing.
Wednesday, 1/01/2014
So you are feeling pretty good about 2014, eh? Stock market on a tear. Most U.S. energy markets relatively stable. Gaps in the oil and gas infrastructure getting filled. Well let’s not get cocky. U.S. energy markets are still in the middle of a revolutionary transformation from shortage to surplus. Where there are big shifts, there are big market disruptions. And in such disruptions, there are always winners and losers. You don’t want to be on the short end of that stick. So in our time honored tradition – the second year in a row – we again stick our collective RBN necks out to peer into the crystal ball to see what 2014 may hold.
Monday, 12/30/2013
On this, the last day of 2013 we thought it would be interesting to look back at the 250 or so RBN blogs posted this year to see which ones had the highest hit rates. When a blog article gets a lot of hits – some up to 17,000 or more – it tells you something about what is going on in the market. So like we did last year, we’ll take a page out of Casey Kasem’s playbook to look back at the top blogs of 2013 based on numbers of website hits.
Thursday, 12/12/2013
Rusty’s Introduction
As a general rule here at RBN, we try to avoid hot button issues like environmental policy. We have good friends on all sides of these issues, so our practice has been to steer clear of debates where the relationship between facts and outcomes can be subject to so much interpretation. However, today we make an exception for a blog by Keith Bailey, a highly respected leader in our industry who serves on the boards of MarkWest Energy, Aegis Insurance Services, Cloud Peak Energy, Apco International Oil and Gas, and by the way, was CEO of The Williams Companies when I worked for that company more than a few years back. Today Keith contemplates the issue of climate change from the vantage point of someone who has been around the track in energy markets and thinks deeply about the big picture issues.
Wednesday, 11/13/2013
The second release of the EIA’s new monthly Drilling Productivity Report (DPR) for November came out on Tuesday (November 12, 2013) showing December natural gas production is expected to increase in four of the six regions covered. But one region alone – the Marcellus – accounts for 76 percent of natural gas production growth. In fact if the Marcellus were a country it would rank 5th in world gas production – ahead of Qatar. The DPR provides a breakdown of rig productivity and production from new and legacy wells and includes access to historical data back to 2007. Today we continue our review of the latest Energy Information Administration’s (EIA) report.
Thursday, 11/07/2013
Forty percent of the world’s fuel oil - the residual oil left over after extracting lighter products from crude oil - is used as bunker oil to power Ocean going vessels. Much of that fuel has relatively high sulfur content. Given that refineries sell fuel oil for less than the cost of crude – the bunkers market has traditionally been a convenient dumping ground for unwanted high sulfur residual fuel oil. New international regulations that came into force in 2012 drastically reduce the permitted sulfur content in bunkers after 2015 in the world’s populated coastal regions. Today we describe the impact the new rules could have on refiners.
Monday, 11/04/2013
Last month the Energy Information Administration (EIA) debuted a new monthly report detailing oil and gas drilling productivity in six of the largest US production basins. Rather than just being an “after the fact” report telling us what happened in the past, the new report provides a forecast of oil and gas production for the current and next month out in each of the six basins. The initial report indicates that oil production will increase by roughly 60 Mb/d in these basins during November with gas production increasing by 0.4 Bcf/d. The report also highlights continued improvement in rig productivity. Today we begin a series interpreting the new drilling rig productivity data.
Thursday, 10/24/2013
Several large deep-water terminals located strategically on Caribbean islands play an important role in the international fuel oil trade. These terminals can berth larger vessels than most Gulf Coast ports – making them ideal staging points for transshipment of ocean bound cargoes coming and going from Europe, Asia or Latin America. With its recent acquisition of the Hess East Coast terminal assets, Buckeye looks set to become a dominant player in the Caribbean terminal and storage market. Today we conclude a two-part survey of Caribbean fuel terminals.
