U.S. propane stocks are high, 33% over the 5-year average. Year-to-date propane exports are at a robust 1.6 MMb/d, well above the 1.4 MMb/d shipped out in 2022. Increasing propane production must be driving the growth in inventories and exports, right? Nay! Propane production is actually down, falling 9% from September 2022 to December, and even with meager growth this year is still 3% below the September high. So where are the propane export and inventory barrels coming from? And what does this mystery reveal about the trajectory of propane production over the next year or two? In today’s RBN blog, we do some sleuthing and come up with some answers.
Daily Energy Blog
Tuesday, 5/02/2023
Category:
Natural Gas Liquids
Monday, 5/01/2023
Category:
Refined Fuels
As environmental protection and decarbonization efforts have ramped up in the past few decades, policymakers around the world have come up with a variety of schemes to lower industrial emissions. The Kyoto Protocol in 1997 committed developed nations to reduce their greenhouse gas (GHG) emissions by a defined amount from 1990 levels by 2012. The treaty was never brought up for ratification in the U.S. Senate, which unanimously opposed it because developing nations — such as China — weren’t included. Across the Atlantic, the Kyoto Protocol was received much more favorably, with all 15 members (at the time) of the European Union (EU) ratifying the treaty in 2002. In 2005, the EU launched the Emissions Trading System (ETS) as a mechanism to help reduce emissions from power plants, industrial facilities and commercial aviation, covering nearly half of total EU emissions. In today’s RBN blog, we explain the European cap-and-trade system, examine how the ETS is affecting the EU’s refining industry as a whole, and drill down to the refinery level to discuss disparities in carbon-cost exposure from one refinery to the next.
Friday, 4/28/2023
Category:
Natural Gas
The global push to decarbonize power generation, shipping and other energy-intensive sectors of the economy and the Biden administration’s efforts to heavily incentivize the development of low-carbon energy sources have resulted in a growing list of big clean ammonia projects in the U.S. Almost all of these proposed multibillion-dollar production facilities are located along the Texas-Louisiana coast, a region that offers easy access to natural gas supply, carbon sequestration sites, and export markets. In today’s RBN blog, we continue our look at the burgeoning market for “green” and (especially) “blue” ammonia with a review of the largest production facilities now under development.
Thursday, 4/27/2023
Category:
Renewables
The Inflation Reduction Act (IRA), which became law several months ago, may have an enormous impact on the U.S. energy landscape over the long run, but many of its key provisions, including the much-discussed tax credits for electric vehicles (EVs), have been missing one big thing: rules of the road. Federal agencies such as the Department of Energy (DOE), the Environmental Protection Agency (EPA) and the Treasury Department are responsible for implementing and enforcing laws passed by Congress, which are not only lengthy and complex, but often leave out important details. That’s where federal rulemaking comes into play, filling in the details and addressing questions left unanswered in the original legislation. In today’s RBN blog, we look at how the rules surrounding the New Clean Vehicle Credit (NCVC) are taking shape, the detailed steps that automakers will have to take to meet new sourcing and content requirements, and what it all means for prospective EV buyers.
Wednesday, 4/26/2023
Category:
Natural Gas
The U.S. won’t add new LNG export capacity this year for the first time since it became an exporter in 2016. But that lull is not going to last long. At least five facilities are under construction and due for completion in the next few years, several other expansions were recently sanctioned, and there are more final investment decisions (FIDs) on the way. With export development expected to accelerate in the coming years, the race to debottleneck feedgas pipeline routes is on. More natural gas pipeline capacity will be needed, particularly for moving gas supply to the Louisiana coast, where the bulk of new liquefaction will be sited. In today’s RBN blog, we resume our series on the pipeline expansions targeting LNG export demand, this time highlighting TC Energy’s Gillis Access Project and how it fits into the Louisiana LNG market picture.
Tuesday, 4/25/2023
Category:
Refined Fuels
The world is full of paradoxes and apparent contradictions, like the phrase “this page intentionally left blank” on an otherwise empty page in a government report, and the energy sector is no different. The U.S. is the world’s largest exporter of the “Big 3” petroleum products — gasoline, diesel/gasoil and jet fuel/kerosene — but it still imports significant volumes of those very same products. That paradox, which is not unlike the U.S.’s need to both export and import various grades of crude oil, is tied to a mismatch between where the product is produced and where it is consumed. In today’s RBN blog, we look at the factors that contribute to that mismatch and what it means for U.S. “Big 3” production and exports going forward.
Monday, 4/24/2023
Category:
Crude Oil
Though much smaller in scope than the oil-and-gas producing behemoth of Western Canada, oil production from the offshore of Canada’s easternmost province of Newfoundland and Labrador already has decades of experience behind it. With five offshore fields producing a little under 230 Mb/d as of early 2023, the region’s slow decline is likely to continue unless existing fields undertake additional development work or new fields are discovered. Building on the province’s commitment to double output by the end of this decade, it has worked with various offshore operators to enhance its royalty regime for two existing sites that will generate increased production in the next few years. In addition, one major discovery has the real potential to meet the pledge of doubling output by the early 2030s. In today’s RBN blog we consider the history of the region’s offshore oil production and future plans to increase output.
Friday, 4/21/2023
Category:
Natural Gas
In the period between Russia’s invasion of Ukraine in February 2022 and the end of last year, LNG sales and purchase agreements (SPAs) totaling 47.23 million tons per annum (MMtpa; 6.3 Bcf/d) were signed between buyers and nine U.S. LNG projects under development. Of those, the projects that will ultimately secure a critical mass of reputable offtakers and achieve a final investment decision (FID) must also secure permitting and financing. Two project FIDs were taken in 2022: Cheniere’s Corpus Christi Stage III in Texas and Venture Global’s Plaquemines Phase 1 in Louisiana. Although two more FIDs have recently been announced — Plaquemines Phase 2 and Sempra’s Port Arthur Phase 1 — there can be a timing disconnect between the commitments LNG buyers are prepared to make and the ability of project sponsors to deliver on their plans. In today’s RBN blog, we focus on the increasingly important role of financing in the implementation of U.S. LNG projects and the challenges that project developers and sponsors face.
Thursday, 4/20/2023
Category:
Natural Gas
For some time now, clean ammonia proponents have been talking up its potential as a very-low-carbon alternative for power plants, ships and other hydrocarbon consumers. Still, rock-solid plans for U.S. projects to produce large volumes of ammonia from clean hydrogen remained few and far between. Until lately, that is, with the recent uptick in project announcements spurred on, in large part, by the supercharged tax credits for carbon capture and sequestration (CCS) in the Inflation Reduction Act (IRA) and the newly firmed-up efforts by power generators in Japan and South Korea to make clean ammonia an important part of their fuel mix going forward. In today’s RBN blog, we discuss the progress that clean ammonia has made since the IRA became law and the growing list of projects advancing to a final investment decision (FID), construction and production.
Wednesday, 4/19/2023
Category:
Crude Oil
The Shale Revolution transformed the U.S. oil and gas industry operationally and functionally in the late 2000s and early 2010s, but the most significant changes occurred years later. Through the middle and latter parts of the last decade, E&Ps continued to improve their drilling-and-completion techniques and significantly increased production as they gained experience. This production growth was enabled by — or driven by, depending on the perspective — midstream companies’ aggressive efforts to build out the pipelines, gas processing plants and other infrastructure required to handle higher production volumes and exports. More recently, capital market constraints, the Covid pandemic and a looming ESG narrative have propelled the industry into the next phase of its evolution, highlighted by fiscal discipline, which delivers improved shareholder returns through managed capital spending. But how long will this stage last — and what’s next? In today’s RBN blog, we examine the energy industry’s maturation and the differences between this transformation and those in other industries.
Tuesday, 4/18/2023
Category:
Crude Oil
For a major oil and gas producer, organic growth over time is all well and good. But if you want next-level scale — and the economies that come with it — there’s nothing like cannon-balling into the deep end of the pool with a huge, game-changing acquisition. ExxonMobil has already done that twice — first in 2010 with the $41 billion purchase of XTO Energy, then in 2017 when it bought the Bass family’s oil and gas assets for $6.6 billion. Now it’s said to be poised for another big plunge, and to be eyeing the Permian’s largest E&P, Pioneer Natural Resources. In today’s RBN blog, we analyze a potential deal that would make Exxon the dominant producer in the premier U.S. shale play.
Monday, 4/17/2023
Category:
Crude Oil
Russia has long been a significant supplier of refined intermediates and finished products to Europe, just as it has been of crude oil. That changed, however, in the wake of Russia’s invasion of Ukraine in February 2022 as the European Union (EU) implemented a formal embargo on imports of Russian crude oil in December 2022, followed by refined products in February 2023. In today’s RBN blog, we review the reduction in imports of Russian refined products and intermediates into Europe and the specific replacement sources.
Friday, 4/14/2023
Category:
Crude Oil
It’s not just the upstream side of the Permian that’s in the midst of a major consolidation. Over the past couple of years, a slew of significant M&A deals have been made in the midstream space, most recently Energy Transfer’s $1.45 billion plan to acquire Lotus Midstream. Backed by private equity, Lotus has assembled an impressive array of crude-oil gathering, storage and long-haul pipeline assets in West Texas and southeastern New Mexico — including the Centurion pipeline system that links the Permian with the crude oil hub in Cushing, OK. In today's RBN blog, we discuss the deal and what it means for Energy Transfer, whose role in the U.S.’s most prolific crude-oil-focused production area is poised to expand by leaps and bounds.
Thursday, 4/13/2023
Category:
Natural Gas
By now, just about everyone is aware of and has been impacted by efforts to reduce greenhouse gas (GHG) emissions — and methane especially — as a way of meeting global climate goals, but that doesn’t mean everyone is on the same page. The energy industry is a leading source of methane emissions in the U.S., but with nearly 1 million active wells across the country and not much common ground on the actual scope of methane emissions and how best to reduce them, finding a path forward without overburdening the sector and its customers is more than a little tricky. In today’s RBN blog, we preview our latest Drill Down Report on efforts to reduce methane emissions.
Wednesday, 4/12/2023
Category:
Crude Oil
Crude oil exports are hitting record volumes. Geopolitical dislocations, regional capacity constraints, and transport cost aberrations are upending global trade flows. These developments have a direct impact on U.S. export grades, prices, and the utilization of pipelines and terminals. Petroleum product exports have an equally formidable set of challenges. U.S. surpluses of refined products are growing as domestic demand falls and biofuel penetration increases. The impact will translate directly into shifts in flows between PADDs, the repurposing of infrastructure, and more exports from the Gulf Coast. We’ll be exploring these and many more developments at our upcoming conference, xPortCon-Oil 2023, to be held in Houston on June 8, 2023. In this blatantly advertorial blog, we will introduce the major topics to be covered at the conference, who will be participating, and why we believe this will be the most important industry gathering for crude and products markets this year.
