RBN Energy

Passage of the Inflation Reduction Act (IRA) in August 2022 was intended to unleash a wave of clean-energy initiatives, from hydrogen and renewable fuels to electric vehicles and large-scale carbon-capture projects, all part of the Biden administration’s plans to reduce carbon dioxide (CO2) emissions and move the U.S. closer to a net-zero economy. But while billions in federal financing and tax credits have helped move many projects forward, they can only advance as fast as permitting, regulations and economic reality will allow. In today’s RBN blog, we look at the surge in proposed carbon-capture projects since passage of the IRA, where they are in the review process, and how the pace of permitting at the federal level compares with the states that have primacy over their own sequestration wells. 

Analyst Insights

Analyst Insights are unique perspectives provided by RBN analysts about energy markets developments. The Insights may cover a wide range of information, such as industry trends, fundamentals, competitive landscape, or other market rumblings. These Insights are designed to be bite-size but punchy analysis so that readers can stay abreast of the most important market changes.

By Kristen Holmquist - Thursday, 6/20/2024 (3:00 pm)
Report Highlight: U.S. Propane Billboard

The EIA reported total U.S. propane/propylene inventories built by 1.6 MMbbl for the week ended June 14, well below industry expectations of 2.26 MMbbl and the average for the past five years. Storage is 8% lower than the same time last year.

By Kristen Hays - Thursday, 6/20/2024 (1:15 pm)

A federal appeals court this week ruled that a dispute with Michigan's attorney general regarding its Line 5 crude and NGL pipeline be handled in state court.

Recently Published Reports

Report Title Published
NGL Voyager NGL Voyager - June 19, 2024 1 day 4 hours ago
NATGAS Appalachia NATGAS Appalachia – June 19, 2024 1 day 5 hours ago
Canadian Natgas Billboard Canadian NATGAS Billboard - June 19, 2024 1 day 13 hours ago
Hydrogen Billboard Hydrogen Billboard - June 19, 2024 1 day 14 hours ago
Chart Toppers Chart Toppers - June 19, 2024 1 day 15 hours ago

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Daily Energy Blog

Category:
Natural Gas Liquids

With an announcement in late 2023 by Dow Chemical that it would be undertaking an enormous expansion of its ethylene production site in Fort Saskatchewan, AB, it was immediately clear that Alberta’s ethane supplies would need to increase by a significant 110 Mb/d. As we’ll discuss in today’s RBN blog, a deal was signed in February between Dow and Pembina Pipeline Corp. that calls for the midstreamer to provide up to 50 Mb/d of additional ethane supplies and, according to executives at Pembina’s investor day earlier this month, will require the company to invest between C$300 million (US$220 million) and C$500 million (US$367 million) to build out its existing NGL/ethane infrastructure.

Category:
Crude Oil

On the surface, the Bakken story in the mid-2020s may seem as boring as dirt. The boom times of 2009-14 and 2017-19 are ancient history. Crude oil production has been rangebound near 1.2 MMb/d — well below its peak five years ago. And that output has been getting gassier over time, creating natural gas and NGL takeaway constraints that have put a lid on oil production growth. But don’t buy into the view that the Bakken is yesterday’s news. Beneath the surface (sometimes literally), the U.S.’s second-largest crude oil production area is undergoing a major transformation that includes E&P consolidation, production (and producers) going private, the drilling of 3- and (soon) 4-mile laterals, novel efforts to eliminate flaring, and even a producer-led push for CO2-based enhanced oil recovery (EOR). As we’ll discuss in today’s RBN blog, these changes and others may well breathe new life into the Bakken and significantly improve the environmental profile of the hydrocarbons produced there. 

Category:
Energy

There’s never been any reason to question the drivers for energy infrastructure development — until now.  Historically, the drivers were almost always “supply-push.” The Shale Revolution brought on increasing production volumes that needed to be moved to market, and midstreamers — backed by producer commitments — responded with the infrastructure to make it happen. But now things seem to be different. U.S. energy infrastructure investment is soaring across crude oil, natural gas and NGL markets and, as in previous buildouts, midstreamers are bringing on new processing plants, pipelines, fractionators, storage facilities, export terminals and everything in between. We count nearly 70 projects in the works. But crude production has been flat as a pancake, natural gas is down, and lately NGLs are up — but as you might expect, only in one basin: the Permian. So what is driving all the infrastructure development this time around? In today’s RBN blog, we’ll explore why that question will be front-and-center at our upcoming School of Energy: Catch a Wave. Fair warning, this blog includes an unabashed advertorial for our 2024 conference coming up on June 26-27 in Houston. 

Category:
Natural Gas Liquids

Rome wasn’t built in a day and neither were the large, wellhead-to-market natural gas and NGL networks that Phillips 66 and a handful of other midstream empires have assembled — many of them targeting the all-important Permian. Now, P66 has reached an agreement to acquire Pinnacle Midstream, whose associated gas gathering system and gas processing complex in the heart of the Midland Basin nicely complement a host of other gathering and processing assets P66 controls through its majority stake in DCP Midstream. In today’s RBN blog, we’ll discuss P66’s planned purchase of Pinnacle Midstream and what it means for the Permian piece of the acquiring company’s broader natgas/NGL system. 

Category:
Crude Oil

The Houston crude oil hub has become busier over the last few months, and if one or more proposals to build a deepwater export terminal nearby capable of fully loading a Very Large Crude Carrier (VLCC) cross the finish line, it could become the hub supplying them. That could push Permian Basin oil flows on Houston-bound pipelines higher at the expense of flows to Nederland and Corpus Christi. In today’s RBN blog, the third in a series, we will examine the latest Permian oil flows to Houston and how that could change if and when a deepwater project comes online. 

Category:
Energy

There’s never been any reason to question the drivers for energy infrastructure development — until now.  Historically, the drivers were almost always “supply-push.” The Shale Revolution brought on increasing production volumes that needed to be moved to market, and midstreamers — backed by producer commitments — responded with the infrastructure to make it happen. But now things seem to be different. U.S. energy infrastructure investment is soaring across crude oil, natural gas and NGL markets and, as in previous buildouts, midstreamers are bringing on new processing plants, pipelines, fractionators, storage facilities, export terminals and everything in between. We count nearly 70 projects in the works. But crude production has been flat as a pancake, natural gas is down, and lately NGLs are up — but as you might expect, only in one basin: the Permian. So what is driving all the infrastructure development this time around? In today’s RBN blog, we’ll explore why that question will be front-and-center at our upcoming School of Energy: Catch a Wave. Fair warning, this blog includes an unabashed advertorial for our 2024 conference coming up on June 26-27 in Houston. 

Category:
Crude Oil

Energy Transfer, which is championing its Blue Marlin Offshore Platform (BMOP), may have been the last developer to pursue its critical deepwater export license, but that doesn’t mean it’s out of the hunt. Of the four offshore crude oil export projects, BMOP stands out as the sole brownfield initiative, which should hold down costs and expedite its construction timeline. Further, a recent non-binding agreement with TotalEnergies underscores the industry’s interest in this unusual but compelling facility. In today’s RBN blog, we explore Energy Transfer’s unconventional approach. 

Category:
Natural Gas

Permian production may have plateaued over the past few months — the shale play’s crude oil output has bounced between 6 MMb/d and 6.3 MMb/d for almost a year now, and natural gas production has hovered around 18 Bcf/d for about as long. But producer-backed plans to continue adding gas processing capacity in the Permian’s Delaware and Midland basins strongly suggest that E&Ps in West Texas and southeastern New Mexico see a lot more production growth “up around the bend.” As we discuss in today’s RBN blog, midstream companies haven’t tapped the brakes on their plans for new gas processing capacity in the Permian — in fact, they’ve been keeping the pedal to the metal. 

Category:
Financial

The transition of U.S. E&Ps to capital discipline has led to historic shareholder returns and won back legions of investors who had virtually abandoned the industry until a few years ago. But while it might be tempting to conclude producers must finally have their financial houses in good order, a lot of us have witnessed a few boom-and-bust cycles in our time and remain hypervigilant for any signs of financial instability, especially considering that commodity prices could weaken at any time. In today’s RBN blog, we analyze the impact of lower price realizations and capital allocation decisions on the balance sheets of the major U.S. independent oil and gas producers. 

Category:
Renewables

Rising global interest in clean ammonia — plus the potential for earning generous federal tax credits — spurred a host of project announcements over the past couple of years, with the first new production capacity slated to start up as soon as 2025. But reality is setting in regarding the pace of clean-ammonia demand growth and the financial, regulatory and other challenges of developing complicated, big-dollar projects, particularly those involving carbon capture and sequestration (CCS). In today’s RBN blog, we provide an update on the major clean ammonia proposals we’ve been tracking. 

Category:
Natural Gas

The growing number of energy-intensive data centers coming online across the U.S. is spurring utilities to ramp up their plans for adding new sources of power generation — including a slew of gas-fired plants — and also complicating their efforts to rely more on renewable resources and decarbonize the power grid. The push to quickly develop new energy infrastructure is also running into well-documented issues with permitting such projects. In today’s RBN blog, we discuss the proliferation of massive data centers — many of them catering to the surge in interest in artificial intelligence (AI) — and what that means for utilities and power-related demand for natural gas. 

Category:
Crude Oil

For the past decade, producers in the Permian Basin have been the driving force in domestic production growth, but lately there has been a hard-to-miss slowdown in incremental production rates for crude, gas and natural gas liquids (NGLs). While Permian producers are primarily motivated by crude oil economics, those volumes also come with a lot of associated natural gas and NGLs. These commodities are therefore fundamentally interlinked. So if there’s a hangup with one, the effects will be felt across the upstream and then cascade downstream. There is a lot of money riding on these markets and the impacts of an extended slowdown in the Permian could be monumental, not just in the energy industry but also in the broader U.S. and global economies. In today’s RBN blog, we will examine what’s to blame for plateauing production in the U.S.’s most prolific basin and gauge what its big-picture implications might be. 

Category:
Natural Gas Liquids

For years, the South Texas NGL market was a world of its own — a self-contained liquids ecosystem centered around the refineries and petrochemical plants in the Corpus Christi area. But that all changed about six years ago when EPIC Midstream built a new NGL pipeline from the Permian into Corpus and a new fractionator to process those liquids. Corpus morphed into a vibrant NGL market in its own right. But nothing with South Texas NGLs is easy. Before the EPIC system was even up and running, a consortium calling itself BANGL — short for Belvieu Alternative NGL — announced another pipeline to compete for Permian NGLs that would parallel EPIC’s route out of the Permian, but then make a hard left toward Sweeny and Texas City, setting up a battle of the pipes for Permian NGLs. 

Category:
Refined Fuels

How can a business survive and thrive while spending $5.30 to make a product that sells for $1.90? That’s what’s happening in the booming renewable diesel (RD) market, where government subsidies allow RD to compete directly with petroleum diesel even though RD is inherently more costly to produce. But as new plants keep coming on stream, RD profit margins are coming under closer scrutiny. In today’s RBN blog, we analyze RD profit margins and show how they are changing as the market continues to expand. 

Category:
Crude Oil

The Corpus Christi crude oil market is pulling as much volume as it can from the Permian Basin via pipelines that are running nearly at capacity. That explains why two midstream companies are responding with plans to boost the capacities of their respective pipelines from the Permian to refineries and export terminals in the Corpus area. But the situation is complicated by the very real possibility that one or more deepwater export facilities capable of fully loading a Very Large Crude Carrier (VLCC) may be built off the Texas coast. In today’s RBN blog, we’ll examine current and proposed pipeline takeaway capacity out of the Permian and the potential for proposed offshore export facilities to impact pipeline flows from West Texas to the coast.