Alberta, Canada’s energy powerhouse, accounts for the vast majority of the nation’s crude oil, natural gas, and NGL production. There is a lot of hydrogen locked up in all of those hydrocarbons and Alberta’s provincial government recently laid out a seven-part plan to expand the production and use of “blue” hydrogen — produced from natural gas via steam methane reforming with carbon capture and sequestration — as part of a broader effort to bolster its existing natural gas sector and energy transition cred. In today’s RBN blog, we explore Alberta’s proposed hydrogen strategy.
The Shale Revolution created an unprecedented need for midstream infrastructure of every sort — gathering systems, processing plants, storage hubs, takeaway pipelines, fractionators, export terminals, and more — all with the aim of connecting new hydrocarbon supply to demand. Throughout the 2010s, the scope and urgency of this midstream build-out opened up tremendous opportunities for the master limited partnerships, private-equity-backed developers, and other entities with the management skills, financial wherewithal, and dexterity to make these massive projects happen. Now, much of the Shale Era’s required new infrastructure is in place — and COVID and ESG have slowed new-project development to a crawl — putting many MLPs in a bind and leaving private equity firms to wonder where they should invest their money next. Well, there may be an even better set of new opportunities on the horizon — all related to the coming energy transition — and, as it turns out, midstream developers with hydrocarbon experience are uniquely positioned to lead the way. In today’s RBN blog, we discuss how the project-development model that drove the midstream sector’s growth over the past decade is poised for potentially lucrative re-use in the 2020s and beyond.
The idea of capturing the carbon dioxide emitted from power plants and industrial facilities and permanently storing it deep underground is widely viewed as one of the more promising ways to reduce greenhouse gas emissions. The catch is, how do you convince private-sector CO2 emitters to invest tens or hundreds of millions of dollars in carbon capture and sequestration projects? Enter federal government incentives — in this case the Internal Revenue Code’s carbon oxide sequestration tax credits, better known as 45Q, which at first glance would appear to offer certain industries significant financial incentives if they make these investments. However, while the credits — available for a variety of projects and uses — have been around since 2008 and were significantly expanded in 2018, they have not yet made much of an impact. In today’s RBN blog, we look at how the credits can add up for individual projects and how widely variable costs make carbon capture uneconomic for several industries.
The international shipping industry’s push to significantly reduce its carbon footprint over the next three decades is raising an obvious question: Is there a zero- or low-carbon bunker fuel that meets all of the industry’s basic criteria — things like availability, safety, and relative economy, not to mention sufficient on-board energy to transport massive, city-block-sized vessels thousands of miles at a clip. There is no clear answer yet, but there is a lot of talk about ammonia, or more specifically ammonia produced in a way that either generates no carbon dioxide (CO2) or that captures and sequesters much of the CO2 that is generated during production. But several major challenges must be met before “green” and “blue” ammonia can lay claim to even a small slice of the bunkers market, as we discuss in today’s RBN blog.
Capturing carbon dioxide and permanently storing it below ground is expected to be a critically important tool in the global effort to reduce greenhouse gas (GHG) emissions. The oil and gas industry has been a leader in showing how CO2 –– albeit mostly CO2 that is produced from underground reservoirs, not captured from industrial facilities or power plants — can be used and sequestered via enhanced oil recovery (EOR). The catch is that capturing CO2 and using it for EOR or injecting it into deep wells for eternal storage doesn’t come cheap and so government incentives are required to justify investment in carbon-capture projects. Enter the 45Q tax credit. First made available for U.S. carbon-capture projects in 2008, it has been expanded considerably since then and could soon be expanded further, although its results to date are a mixed bag at best. In today’s RBN blog, we discuss key aspects of the tax credit, how it has changed over time, and what may be coming down the pipeline.
Countries around the world are formulating and refining their strategies to reduce greenhouse gas emissions. Their policies target numerous areas such as stationary emissions, electricity production, and transportation. Within the transportation sector, one aspect that has spurred quite a bit of investment relates to reducing the carbon intensity of transportation fuels. The low-carbon fuel policies that are in place today, coupled with those being evaluated for the future, have the potential to incentivize the development of a wide range of “greener” alternatives to petroleum-based fuels in the regions where they are adopted. In today’s RBN blog, we discuss highlights from Part 2 of our Drill Down report on low-carbon fuels, focusing this time on ethanol, biodiesel, sustainable aviation fuel, and hydrogen, and the government policies that help support them.
The U.S. is poised for a massive buildout in renewable diesel production capacity — a boom spurred by increasingly supportive government policies and a big push by ESG-minded refiners wanting to reduce the carbon footprint of their operations. It also hasn’t hurt that while renewable diesel is produced from used cooking oil, tallow, and other renewable feedstocks, it meets or exceeds the fuel specifications of traditional ultra-low sulfur diesel and thus is considered a “drop-in” replacement for ULSD — there’s no “blend wall” that limits its use. In the encore edition of today’s RBN blog, we discuss highlights from our recent Drill Down report, which looks at why renewable diesel is a hot topic, what we can learn from California’s Low Carbon Fuel Standards program, and how much new renewable diesel capacity is in the works.
A few things have changed since we wrote our first hydrogen blog a year ago. First, there’s heightened awareness of the many ways hydrogen can be used to help reduce greenhouse gas (GHG) emissions. Second, the number of proposed hydrogen production projects has proliferated, and our project list continues to grow each week. Third, and perhaps most importantly, the federal government has thrown its support — and billions in taxpayer dollars — behind low-carbon hydrogen. However, despite those positive developments, hurdles clearly remain in the hydrogen sector, with economics a major sticking point, though a few projects are set to get off the ground next year. In today’s RBN blog, we provide a year-end update on domestic hydrogen projects.
International shipowners need to significantly reduce their carbon-dioxide emissions by 2030 and will come under pressure to achieve carbon neutrality by 2050. Given that the industry currently depends almost entirely on fossil fuels for ship propulsion — and that every zero- or near-zero-carbon alternative faces serious headwinds — it won’t be an easy or low-cost transition. One pathway would be expanding the use of LNG as a bunker fuel in the near term and then shifting to alternatives like bio-LNG and synthetic LNG as they become more commercially available and economic. Another would be to use “green” or “blue” hydrogen, ammonia, or methanol. But there are challenges to each, not the least of which are the small volumes of non-traditional fuels being produced — and their high cost — and the need for new infrastructure both to produce and distribute them, as we discuss in today’s RBN blog.
Carbon dioxide is not the most potent of the greenhouse gases, but it is by far the most prevalent, which makes it a primary focus of efforts to protect the planet. And while a lot of attention is being paid to ways to reduce CO2 emissions and to capture those that are produced, it’s important to remember one key fact: There’s strong demand for CO2 for a variety of commercial uses, from enhanced oil recovery and fertilizers to industrial processes and beverage production. In other words, CO2 has real value to certain parts of the global economy and capturing CO2 for sale to these customers must be factored into the decarbonization equation. In today’s RBN blog, we take a closer look at the industrial CO2 value chain.
These are troubled times, as the song says, caught between confusion and pain. Following the COVID trauma of 2020, oil, gas, and NGL markets are now coping with uncertainty of medium- and long-term prospects in light of energy transition rhetoric. Will we continue to see sufficient investment in the hydrocarbon-based supplies that the world needs today, or will resources be increasingly diverted toward renewable energy technologies and wider ESG goals? Finding a way to satisfy the global appetite and fuel continued recovery while planning for the future was a core theme for RBN’s Fall 2021 School of Energy: Hydrocarbon Markets in a Decarbonizing World. In today’s advertorial RBN blog, we lay out some key findings and highlights from this fall’s virtual conference.
The U.S. is poised for a massive build-out in renewable diesel production capacity — a boom spurred by capacity rationalization amongst traditional refineries, increasingly supportive government policies, and a big push by ESG-minded refiners wanting to reduce the carbon footprint of their operations. It also hasn’t hurt that while renewable diesel is produced from used cooking oil, tallow, and other renewable feedstocks, it meets or exceeds the fuel specifications of traditional ultra-low sulfur diesel and thus is considered a “drop-in” replacement for ULSD — there’s no “blend wall” that limits its use. In today’s RBN blog, we discuss highlights from our new Drill Down report, which looks at why renewable diesel is a hot topic, what we can learn from California’s Low Carbon Fuel Standards program, and how much new renewable diesel capacity is in the works.
Discussions about energy transition and increased electrification are all around us, whether they involve accelerating the ramp-up in renewable power sources such as wind and solar, facilitating the shift to electric vehicles, or switching to alternative fuels like hydrogen. But amid all the talk about the evolution to a low-carbon world — and away from oil and gas — there’s one area that is sometimes overlooked: petrochemicals. In the U.S., most steam crackers use natural gas liquids (NGLs) as their primary feedstocks, and they also consume a lot of energy — two big red flags in an increasingly ESG-focused world. And that’s giving bioethylene, billed as a green alternative to traditional ethylene, a moment in the spotlight. In today’s RBN blog, we look at how bioethylene is produced, how it differs from ethylene produced from traditional measures, and why it may someday evolve into an attractive alternative for the petrochemical industry, even though it’s far from a sure thing.
Leading international shipping associations and many of the large shipowners they represent are pressing the International Maritime Organization (IMO) to take a much more aggressive approach to decarbonizing their industry, and calling for a $100/metric ton fee on carbon dioxide emissions from ships to spur investment in no-carbon propulsion systems. In effect, shipowners—themselves under pressure from their large, ESG-minded customers, are telling the IMO that its goals of reducing global shipping’s carbon intensity by 40% by 2030 and total greenhouse gas emissions by 50% by 2050 are far too timid. They are insisting that the IMO set the industry on a course to quickly ramp down its carbon dioxide emissions in the 2020s and achieve net-zero CO2 emissions by mid-century. If the shipowners prevail, it could result in the phase-out of hydrocarbon-based bunker fuel in favor of low-carbon alternatives like ammonia, hydrogen, and electric batteries. In today’s RBN blog, we begin a review of the big changes ahead for global bunker fuel and what they mean for oil and gas producers and refiners.
Electric vehicles sit front and center in the effort to decarbonize passenger transportation, a movement that helped make Tesla’s Elon Musk the richest man in the world. Pair this with heavy attention to EVs from the broader car-and-truck market and the White House’s goal of 50% EV sales by 2030 and it makes you wonder how EVs will impact the energy and power-generation sectors. We’ve all seen how power grids can be overwhelmed during periods of extreme heat or cold, by relying too heavily on intermittent renewables like wind and solar, or — as many Texans saw last February — by interruptions in natural gas deliveries to gas-fired power plants. What might happen when we add tens of millions of power-hungry EVs to the mix? In today’s RBN blog, we discuss the impacts that scaling electric vehicles may have on energy and power markets and the power grid.