A major theme under the second Trump administration has been “energy dominance,” with a focus on expanded drilling, increased oil and gas production, and an easier path to project approvals. Today, we explain why the goal of “energy dominance” doesn’t mean going it alone, especially when it comes to the refining sector.
Strong demand for refined products (especially jet fuel) in Arizona and refinery closures in Southern California have spurred the development of a new refined products pipeline from West Texas to the Phoenix area. ONEOK, whose acquisition of Magellan Midstream Partners made it a player in refined products, has announced an open season for the proposed Sun Belt Connector pipeline, which would expand PADD 2 and PADD 3 refiners’ access to premium markets out West. In today’s RBN blog, we discuss ONEOK’s plan and how it could impact refined products markets.
Familiar corporate names like Cummins, Freightliner and Waste Management have joined forces with dozens of less-familiar public companies and startups to form what some might call a new U.S. industry. Thousands of commercial trucks powered by compressed natural gas (CNG) are on the roads nationwide, many of them filling up at dedicated fueling stations offering a compressed form of renewable natural gas (RNG), a cellulosic biofuel typically sourced from landfills and dairy farms. In today’s RBN blog, the third and final in our series on the D3 Renewable Identification Number (RIN), we show how this young industry could emerge as a commercial success for cellulosic biofuels, although political and regulatory risk remains.
A primary objective of the Renewable Fuel Standard (RFS) implemented in 2007 was to stimulate the production of at least 16 billion gallons/year of gasoline and diesel made from cellulosic biomass, or non-food crops and waste biomass like corn stalks, corncobs, straw, wood, wood byproducts and animal manure. But the vision of making gasoline from wood chips never materialized and today’s cellulosic biofuel is a whole different ballgame. In today’s RBN blog, we look at the evolution of cellulosic biofuels and the D3 Renewable Identification Number, aka the D3 RIN.
A primary objective of the federal Renewable Fuel Standard (RFS), when it was expanded back in 2007, was to stimulate by 2022 the production of at least 16 billion gallons/year of gasoline and diesel made from cellulosic biomass in conversion plants resembling small refineries. After getting lots of headlines in the early days of renewable fuels, that vision faded into the background and attention shifted to the use of ethanol in gasoline and the production of diesel from soybean oil, but cellulosic biofuels — non-food crops and waste biomass like animal manure, corn cobs, corn stalks, straw and wood chips — are back in the spotlight thanks to a regulatory quirk. In today’s RBN blog, the first in a series, we review the unusual history of the D3 Renewable Identification Number (RIN), the subsidy designed to stimulate cellulosic biofuel production, and the recent impact on heavy-duty trucking.
U.S. oil, natural gas and NGL markets are more interconnected than ever — with each other and with global dynamics. The deep connections we see today have evolved in the 15 years since the start of the Shale Revolution, and in recognizing how the various segments have impacted one another, we can better explain how they are driving today’s markets. That was the focus of our Fall 2023 School of Energy and it’s the subject of today’s RBN blog, which (warning) is a blatant advertorial for School of Energy Encore, a newly available online version of our recent conference.
Renewable Identification Numbers (RINs) are credits used to certify compliance with the Renewable Fuel Standard (RFS), which requires certain minimum volumes of biofuels to be blended into fuels sold in the U.S. There are many types of fuels covered by the RFS and so RIN credits come in different categories. One category, the D6 RIN, applies to the blending of corn-based ethanol into refined gasoline to make the gasoline-ethanol blends we pump into our cars, SUVs and pickups. In 2013, the D6 RIN price skyrocketed 100-fold in one of the most extreme cases of panic buying in any major commodity market in history. In today’s RBN blog, we examine that event and address three key questions: How did it happen, what was the solution, and why does it matter today?
As concerns about energy security have come to the forefront, some in the mainstream have begun to pump the brakes on the idea of energy transition at any cost and reevaluate the practicality of some proposed solutions. But that hasn’t changed the long-term outlook for energy transition nor the fact that numerous individual projects focused on alternative fuels, carbon capture, hydrogen and renewable energy are in the works, gaining in prominence and attracting a prodigious amount of investment. There is still an anticipation among investors that the market will increasingly demand greener production methods — they just need to be well-conceived, planned and executed. The good thing for Fidelis New Energy — a Houston-based firm focused on climate-impact infrastructure, including low-carbon, sustainable fuels — is that, among renewable producers, they’re building a sustainable cost advantage through efficient, integrated design. In today’s RBN blog we look at what Fidelis calls the Grön Fuels GigaSystem.
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.
Over the past few weeks, publicly traded independent refining companies reported their latest quarterly results, and nearly all lamented on a common theme: the cost of Renewable Identification Numbers (RINs) is out of control. However, the financial burden is not felt equally across the industry, as companies with integrated marketing operations (refining, blending and retailing) don’t face the same RINs-cost albatross as merchant refiners who don’t have retail operations. Today we review the escalating RIN costs that obligated parties have endured this year and explain how the degree of financial pain depends on the level of refiners’ downstream integration.
