RBN Energy

Thursday, 5/19/2022

The race is heating up for building natural gas pipeline takeaway capacity out of the Permian. Associated gas production from the crude-focused basin is at record highs this month and gaining momentum, which means that without additional pipeline capacity, the Permian is headed for serious pipeline constraints — and potentially negative pricing — by late this year or early next, which would, in turn, limit crude oil production growth there. Midstreamers are jockeying for the pole position to move surplus gas from the increasingly constrained basin to LNG export markets along the Gulf Coast. One of the contenders, Matterhorn Express Pipeline (MXP), a joint venture (JV) between WhiteWater, EnLink Midstream Partners, Devon Energy and MPLX, announced its final investment decision (FID) late yesterday. In today’s RBN blog, we provide new details on the greenfield project.

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Daily energy Posts

Thursday, 02/17/2022

There is a lot we don’t know about how the energy transition might play out over the next couple of decades. One thing that we can say with a high degree of certainty, however, is that the big run-up in wind and solar generating capacity in recent years is just the beginning — a lot more wind farms and solar arrays will be developed through the 2020s and ’30s, as will many, many energy-storage batteries. Another good bet is that as the portfolios of wind and solar developers grow, they will need help in maintaining, upgrading, and replacing their assets from a newly emerging type of company: the clean energy services provider. In today’s RBN blog, we discuss wind and solar’s role in the energy transition and the types of services these new companies might provide.

Thursday, 02/10/2022

It’s been heard in many a pub: “Liquor may not be the answer, but it’s worth a shot.” You could make the same argument for hydrogen. While many question whether it will ever make economic sense to use hydrogen as a supplement to — or replacement for — natural gas on a large scale, others insist that hydrogen has a great future as a climate-friendly fuel, assuming it receives sufficient developmental support from government and ESG-minded industry. As it turns out, an early test of hydrogen’s potential is coming from the liquor industry itself, or more specifically, the maker of a renowned single-malt scotch on the Isle of Islay, off Scotland’s western coast. In today’s RBN blog, we discuss the distiller’s hydrogen production and combustion project and the broader plan by members of the Scotch Whisky Association and Scotland itself to achieve net-zero carbon emissions within a generation, largely through the expanded use of hydrogen.

Wednesday, 02/09/2022

Not so long ago, most folks in the energy industry hardly gave carbon dioxide (CO2) a thought. Sure, some CO2 was used for enhanced oil recovery (EOR) and in some production areas the natural gas coming out of the ground had to be treated to remove high levels of CO2. But otherwise, CO2 wasn’t on the industry’s radar. Now though, CO2 is a front-and-center concern not just for the energy industry but for society at large as the global economy tries to decarbonize. And while renewable energy like wind and solar will be part of that decades-long effort, so will the push to capture CO2 and permanently store it deep underground. Put simply, it’s time for producers, midstreamers, and refiners alike to gain a deeper understanding of carbon capture and sequestration, how it will affect them, and — ideally — how they can profit from it. In today’s RBN blog, we discuss highlights from our new Drill Down Report.

Tuesday, 02/08/2022

The illusion of a smooth energy transition was swept away in 2021, with the drive toward decarbonization running headlong into the reality of energy markets. It is now clear that the transition and its effects are permeating all aspects of supply and demand, from the chaos in European natural gas, to producer capital restraint in the oil patch, to the rising impact of renewable fuels and, of course, the escalating roadblocks to pipeline construction. Gone are the days when traditional energy markets operated independently of the energy transition. Today the markets for crude oil, natural gas, and NGLs are inextricably tied to renewables, decarbonization, and sustainability. It’s simply impossible to understand energy market behavior without having a solid grasp of how these factors are tied together. That is what School of Energy Spring 2022 is all about! In today’s RBN blog — a blatant advertorial — we’ll highlight how our upcoming conference integrates existing market dynamics with prospects for the energy transition.

Tuesday, 02/01/2022

The Internal Revenue Code’s tax credit for carbon oxide sequestration, better known as 45Q, is fortunate to enjoy something very rare in Washington, DC, these days — generally bipartisan support. A host of changes aimed at bolstering the tax credit were included in the House-approved version of the Democrats’ central piece of legislation, the Build Back Better (BBB) Act, but it appears to have no way forward in the Senate — it was declared “dead” Tuesday by West Virginia Senator Joe Manchin, a must-have vote — which means it will likely be split into separate pieces, further complicating its path to passage. Several proposed changes to the 45Q tax credit have already been included in separate legislation, so they could still become a reality. In today’s RBN blog, we’ll look at some potential changes to the tax credit as well as measures that might restrict its use.

Thursday, 01/27/2022

Back in the early days of the Space Race, popular culture envisaged aerospace technology that might one day have us all zooming around town like George Jetson in his flying car. That hasn’t turned out to be the case, but developments that have evolved from rocket technology could one day play a different role here in the 21st century, where producing cleaner power and managing the energy transition are two key global goals. In today’s RBN blog, we look at an innovative “bioenergy with carbon capture and sequestration” (BECCS) project being undertaken in California by Clean Energy Systems (CES) and its partners, how the company’s technology is designed to work, and what “carbon-negative energy” might mean.

Tuesday, 01/25/2022

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.

Monday, 01/24/2022

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.

Monday, 01/17/2022

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.

Monday, 01/10/2022

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.

Wednesday, 01/05/2022

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.

Tuesday, 12/28/2021

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.

Thursday, 12/23/2021

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.

Monday, 12/20/2021

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.

Tuesday, 12/07/2021

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.