RBN Energy

Tuesday, 4/20/2021

This time last year, Appalachian natural gas production was approaching a steep springtime ledge as regional prices sank below economic levels and producers responded with real-time shut-ins. This year to date, regional gas prices have averaged $0.80-$0.90/MMBtu above 2020 levels for the same period, and production has been averaging more than 1 Bcf/d above year-ago levels. If production holds steady near current levels, the year-on-year gains would just about double to ~2 Bcf/d by mid-May, which is when the bulk of the springtime curtailments first took effect in 2020. This, just as Northeast demand takes its seasonal spring plunge, which means regional outflows are poised to rise in the coming weeks, potentially to record levels. How much more can the Appalachian takeaway pipelines absorb? In today’s blog, we continue our analysis of outbound capacity utilization, this time focusing on the routes to the Midwest.

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Daily energy Posts

Thursday, 04/08/2021

Each sector of the oil and gas industry — upstream, midstream, and downstream — faces its own unique set of challenges in dealing with the ongoing transition to a lower-carbon global economy and in addressing the increasing ESG-related demands of investors and lenders. Refiners are no exception. Their highly complex facilities may be capable of converting crude oil into gasoline, diesel, and jet fuel, but the fact remains these refined products generate greenhouse gases when they are produced and consumed. What can refiners do to prepare for an era of low- or no-carbon fuels and improve their enviro-cred at the same time? Many have been investing heavily in renewable fuels production, such as renewable diesel and ethanol, and in sourcing at least some of their electricity needs from wind and solar. Today, we continue our series on the environmental-social-governance movement in the oil and gas industry with a look at what refiners are doing on the ESG front.

Wednesday, 04/07/2021

When it comes to blogs on the developing hydrogen sector, many subjects can seem quite foreign to the traditional hydrocarbons expert. We have found ourselves spending a considerable amount of time over the last few months slowly peeling back the layers on this sector in an effort to be prepared should hydrogen enter a new phase of importance in the energy industry. Today’s blog is likely a much more straightforward one for the typical hydrocarbon-focused reader. That’s because, in our view, Monolith Materials’ unique process for transforming natural gas into “turquoise” hydrogen while sequestering the carbon, is easier to wrap your head around. This is not just because of the company’s clear goals and process, but also because what it does is proving to be economically viable. That’s not always the case when we discuss hydrogen, so covering Monolith’s operations is a welcome break. Today, we detail a truly one-of-a-kind method of low-carbon hydrogen production.

Thursday, 04/01/2021

When it comes to energy markets analysis, there’s nothing quite like spending the better part of an afternoon piecing together a long chain of unit conversions only to find the next day you’ve misplaced the sticky notes on which you wrote them. We’ve all been there, though for most of us it’s become commonplace to memorize the few hydrocarbon conversions needed to get through a lunch or happy hour. Unfortunately, the same cannot be said when it comes to hydrogen, which brings its own set of unique units of measure, many of them not usually bantered around your typical business development discussion. Crunching through them is tough, in our experience, and we find ourselves writing them down over and over again. Which gave us an idea: why not write a blog on the topic? Fortunately, we are in that business, and today we continue our series on hydrogen with a look a green hydrogen production projects and the math needed to make sense of them.

Sunday, 03/28/2021

As part of the Paris Agreement and other regional sustainability goals, countries across the globe are formulating strategies to reduce greenhouse gas emissions. The resultant policies target numerous different areas such as stationary emissions, electricity production, and transportation fuel sourcing. 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 that are being evaluated for the future, have the potential to displace a sizeable portion of the petroleum-based fuels in the regions where they are adopted. In today’s blog, we begin a series on low carbon fuel policies, the mechanisms being evaluated to meet increasingly stringent regulations, and the impact these regulations could have on refined-products markets.

Wednesday, 03/24/2021

When it comes to energy markets analysis, there’s nothing quite like spending the better part of an afternoon piecing together a long chain of unit conversions only to find the next day you’ve misplaced the sticky notes on which you wrote them. We’ve all been there, though for most of us it’s become commonplace to memorize the few hydrocarbon conversions needed to get through a lunch or happy hour. Unfortunately, the same cannot be said when it comes to hydrogen, which brings its own set of unique units of measure, many of them not usually bantered around your typical business development discussion. Crunching through them is tough, in our experience, and we find ourselves writing them down over and over again. Which gave us an idea: why not write a blog on the topic? Fortunately, we are in that business, and today we continue our series on hydrogen with a look a green hydrogen production projects and the math needed to make sense of them.

Thursday, 03/11/2021

ESG is quickly becoming one of the most frequently used acronyms in energy-company Zoom calls and quarterly earnings calls, joining the ranks of oldies-but-goodies like WTI, Bcf, and NGLs. Everyone — including investors — is pushing hydrocarbon producers, midstreamers, and end-users to improve their “environmental, social, and governance” performance nowadays. It’s not always easy, though, especially when the greener, pro-planet thing to do is a lot more expensive. The good news is that there are at least a few potential win-win opportunities out there where companies can both reduce their carbon footprint and save money. In today’s blog we’ll discuss why, in some situations, CNG makes sense as a clean fuel for use as a potential replacement for diesel, propane, and fuel oil in a wide range of energy, mining, forestry, and utility settings.

Wednesday, 03/10/2021

In the world of public equities, nothing speaks relevance like a PowerPoint slide in the earnings call and conference decks that companies put together for analysts and investors. If a topic’s not important, then it probably didn’t “make the deck” — or even the appendix, for that matter. As consultants, we at RBN are familiar with this concept and we’ve been watching for some time to see just how long it would take hydrogen, one of our favorite recent subjects, to make its way into the slide-deck line-ups at some of the largest energy companies. Well, that time has arrived, with two energy stalwarts prominently featuring 2021’s darling subject over the last few days. However, with a new topic comes a need to put things in context. No problem, we are here to help on that. Today, we continue our series on H2 with a look at some recent hydrogen-focused slides from ExxonMobil and Enterprise Products Partners.

Monday, 03/01/2021

Many leading energy companies have come to accept the reality that environmental, social, and governmental (ESG) matters are now front-and-center concerns to an increasing number of investors and lenders. Their challenge, of course, is that the hydrocarbon-based commodities they produce, process, transport, and refine are by their very nature prospective generators of carbon dioxide and other greenhouse gases that the ESG movement is targeting. What’s an energy company to do? For many midstream companies, the answer — for now at least — is to focus on minimizing the release of methane, carbon dioxide (CO2), and other GHGs from their gas processing plants, pipelines, storage facilities, and fractionators, and on switching to renewables to power their operations. Today, we continues our series with a look at how midstream companies are addressing investors’ and lenders’ concerns about the sector’s GHG releases.

Wednesday, 02/24/2021

In many ways, the natural gas shortages and price spikes that came with last week’s Deep Freeze had nothing at all to do with hydrogen. There were no “green” hydrogen plants that froze up in the cold, no withdrawals of stored hydrogen into distributed local fuel cells backing the power grid, no shortages of fuel for hydrogen vehicles. None of that occurred because hardly any of that infrastructure exists just yet. But that doesn’t mean there was no link between last week’s natural gas market and existing forms of hydrogen production, namely “gray” hydrogen used to produce ammonia, most of which is used in the manufacture of fertilizers, and which makes up about a quarter of the hydrogen market. In fact, there was a strong connection, one that highlights the flexibility of industrial natural gas use during price spikes and possibly exposes a vulnerability in gray hydrogen production. Today, we continue our series on hydrogen with a look at how the ammonia industry responded to the recent spike in natural gas prices.

Wednesday, 02/17/2021

Many of us need a break from natural gas market mayhem, rolling blackouts, and frozen pipes, so we’re turning to a very different topic — at least for a day. ESG, or more specifically the environmental part of the too-important-to-ignore environment/social/governmental movement. The fact is, for many investors, lenders, and others who give heavy weight to ESG in their decisions, the companies that produce, process, transport, refine, and/or export hydrocarbons are automatically suspect. At the same time, though, it is broadly understood that crude oil, natural gas, and NGLs remain essential commodities, and that it could take decades for economies around the globe to significantly reduce their dependence on them. So, where does that leave hydrocarbon-centric companies in 2021’s ESG-conscious world? Today, we continue our series on ESG issues and how they relate to players in the energy industry.

Wednesday, 02/10/2021

When it comes to hydrogen, it’s fair to say that hard data on what it costs to produce the fuel is difficult to come by, particularly for “green” hydrogen. If you’ve followed our current work on the fuel, we hope you know at least a few more facts than the average person on the street, though we must admit we’ve really just been scratching the surface so far. Diving deeper into the nitty gritty of hydrogen production costs and economics is not for the faint of heart, but it’s necessary, unless you are of the mind to dismiss the fuel altogether. (We are not.) While it’s very early days for many production pathways to hydrogen, especially green hydrogen, time will tell if the costs to produce it follow a downward trend similar to those for producing hydrocarbons from shale or remain at levels so high the current hydrogen bubble bursts like others before it. We’re optimistic the former may pan out, and in today’s blog we continue our series on hydrogen with a look at the factors impacting production costs.

Tuesday, 02/09/2021

The run-up in crude oil prices the past couple of months has supported a rise in energy stock prices — since early November, the S&P 500 Energy Sector Index has increased by more than 40%. Yet, many investors, lenders and others remain wary of oil and gas companies, not only due to the energy industry’s historic volatility but also the unique social, political and financial pressures that hydrocarbon producers, midstreamers, and refiners face in demonstrating that they are addressing environmental, social, and governance issues. ESG has come to the fore in the U.S., Canada, and elsewhere, and will shape activity in the oil patch this decade and beyond, and energy companies that ignore it or only pay lip service do so at their peril. Today, we begin a series on the growing significance of ESG and how upstream, midstream, and downstream players are incorporating it into their strategies and operations.

Wednesday, 01/27/2021

Based on the response we received to our first-ever hydrogen blog last fall, it’s fair to say we didn’t waste this space on a fringe subject. To be honest, the level of interest in hydrogen far exceeded our expectations, and suggested that we might have even been a little bit late to the party — but fashionably so, if you ask us. In the weeks since then, we’ve spent a fair amount of time distilling the tremendous amount of news flow and reading material that was either sent our way or popped up in the daily news feeds. You could go a lot of different directions with hydrogen and it’s still very easy, in our view, to get lost in the forest of green energy technology. So, as we are wont to do, we have stuck to our simple approach of tackling this fuel just like we do with hydrocarbons, and we are first turning our attention upstream. Today, we continue our series on hydrogen with a look at the top production methods for the fuel.

Monday, 01/11/2021

In the spring of 2020, as the COVID-19 crisis started hitting the energy sector hard, many refiners made the tough decision to dramatically cut back capital spending plans and operating costs for the year in order to weather the storm. While these cuts were swift and sizeable, they were not absolute — they couldn’t be, given that refining is a capital-intensive industry with complex assets that require seemingly constant maintenance, equipment swap-outs, and upgrades. And then there’s the added pressure that refiners also need to invest in keeping their facilities in compliance with changing environmental rules, and to consider the overall impact of investments in new, “greener” fuels, such as renewable diesel, that may help them improve their profitability going forward. Today, we look at refiner capital spending in the context of recent history and highlights some of the growth projects being pursued in the sector.

Thursday, 11/12/2020

Everywhere you look these days, someone is talking about hydrogen and, if you’re not well-versed in emerging technologies aimed at reducing carbon, you may not know what any of it means. A quick internet search isn’t much help either, as you will likely get lost quickly in discussions of fuel cell efficiency and electrolysis technology developments, not to mention the various “colors” of hydrogen and the myriad of ways it can be stored and transported. Don’t bother turning to your traditional green energy gurus either, as hydrogen is just one of many competing approaches to reducing the world’s carbon footprint, and electric vehicle folks like Elon Musk aren’t big fans. All the same, hydrogen news and investment plans seem to proliferate daily, and understanding this fuel — which, by the way, is not new to the energy space — seems prudent. At least that’s our view, which is why we today start a series to help us hydrocarbon experts unravel the mysteries behind the recent hydrogen ruckus.