Now You See It, Now You Don’t – Where Does the Natural Gasoline Go?

Natural gasoline is the most expensive natural gas liquid (NGL), accounting for more than 25% of the price-weighted NGL barrel (versus 10%-12% of the barrel by volume). It is also notoriously difficult to track, with similar products having different names and unclear demand segments. In fact, the difficulty tracking portions of demand, combined with an ongoing imbalance in crude oil supply/demand, led the Energy Information Administration (EIA) to change the way it accounted for natural gasoline demand, which made more than 200 Mb/d of production “disappear” in 2022. In today’s RBN blog, we look at natural gasoline’s primary uses and what was behind the EIA’s decision. 

The numbers don’t add up. Literally. The most closely watched energy statistics in the world have a problem, and it’s been getting worse over the past two years. We’re talking about EIA’s U.S. crude oil supply, demand and inventory balances, which are published each week and then trued up about 60 days later in monthly data. The problem is that the balances don’t balance. EIA uses a plug number alternatively called “adjustment” or “unaccounted for” to force supply and demand to equate. That would not be an issue if the plug number was small and flipped frequently from positive to negative, likely due to timing inconsistencies with the input data. But that’s not the case. The number is mostly positive, meaning more demand than supply. And the difference can be mammoth: last week it was 2.3 MMb/d, or 18.4% of U.S. crude production. It seems like barrels are somehow materializing out of nowhere. But now we know where, because EIA just finished a 90-day study of the crude imbalance that reveals the sources of the problem and what it is going to take to fix it. In today’s RBN blog, we will delve into what has been causing the problem, what it means for interpreting EIA statistics, and what EIA is doing to address the issues. 

By Al Troner, President Asia Pacific Energy Consulting (APEC)

U.S. production of field (lease) condensates is growing like crazy, especially in the Eagle Ford.  There is way too much of this material for it to be absorbed into traditional crude blending markets.  At the same time the production of plant condensate, a.k.a. natural gasoline, is also increasing along with the yield of all other products from natural gas processing plants.  A glut of condensates has developed and is getting worse. Clearly this is an opportunity for new market development, and the bizdev community is hard at work coming up with concepts, projects and proposals to use all of this material in the U.S. and in export markets.  But there is a problem. Condensate markets in different geographies seem to have little in common with each other.  It’s like walking through the looking glass.  One term can have several meanings.  One meaning can be ascribed to several terms. Today we launch a RBN blog series to make sense of it all.